Is EOBI calculated on actual salary?

No. Both shares are percentages of the notified federal minimum wage, so a Rs 300,000 manager and a Rs 40,700 helper cost the employer the same EOBI.

Who has to register with EOBI?

Any industrial or commercial establishment with five or more employees. Employers with fewer can register voluntarily.

How much pension does EOBI pay?

At least Rs 11,500 a month (the minimum since 1 January 2025) after 15 years of insurable service, from 60 for men and 55 for women. The formula is based on years of service and the wage on which contributions were paid, so longer service pays more.

Can the employer deduct its 5% from my salary?

No. Only the 1% employee share may be deducted; the 5% is the employer's own cost. Deducting more is an offence under the Act.

Financev1.0.0Last reviewed 2 Oct 2026

EOBI Contribution Calculator 2026-27

Work out EOBI contributions for one employee or a whole payroll: employer 5% and employee 1% of the federal minimum wage (Rs 40,700 from July 2026), monthly and per year, plus who must register and when pension starts.

EOBI per month for 10 employeesRs 24,420

Rates last reviewed 2 Oct 2026. How this is calculated

Per employee: employer Rs 2,035 (5%) and employee Rs 407 (1%) of the Rs 40,700 minimum wage, Rs 2,442 a month, Rs 29,304 a year. With 5 or more employees, registration is mandatory.

Per employee

Employer share (5%): Rs 2,035
Employee share (1%, deducted from salary): Rs 407
Total per employee per month: Rs 2,442
Per employee per year: Rs 29,304

Payroll (10)

Employer cost per month: Rs 20,350
Employee deductions per month: Rs 4,070
Total deposited per month: Rs 24,420
Total per year: Rs 293,040

Warning: EOBI is due on the notified minimum wage regardless of actual salary; provinces with a higher minimum wage do not change the EOBI base unless EOBI notifies it. Pay by the 15th of the following month to avoid penalties.

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How this is calculated

EOBI (Employees' Old-Age Benefits Institution) is the federal pension scheme for private-sector workers. Under the EOB Act 1976:

Employer contribution: 5% of the minimum wage per insured employee per month (s.9).
Employee contribution: 1% of the minimum wage, deducted from salary (s.9B).
The base is the federal minimum wage, Rs 40,700 from 1 July 2026 under Finance Act 2026, not the employee's actual pay.
Employers with 5 or more employees must register (many register earlier voluntarily so staff accrue service).
Pension is payable at 60 (men) / 55 (women) after at least 15 years of insurable service. The minimum pension is Rs 11,500 a month from 1 January 2025 (raised from Rs 10,000, with formula pensions up 15%); invalidity and survivors' pensions also exist.

Contributions are paid monthly through EOBI's online portal (Facilitation System) by bank challan.

Frequently asked questions

Is EOBI calculated on actual salary?: No. Both shares are percentages of the notified federal minimum wage, so a Rs 300,000 manager and a Rs 40,700 helper cost the employer the same EOBI.
Who has to register with EOBI?: Any industrial or commercial establishment with five or more employees. Employers with fewer can register voluntarily.
How much pension does EOBI pay?: At least Rs 11,500 a month (the minimum since 1 January 2025) after 15 years of insurable service, from 60 for men and 55 for women. The formula is based on years of service and the wage on which contributions were paid, so longer service pays more.
Can the employer deduct its 5% from my salary?: No. Only the 1% employee share may be deducted; the 5% is the employer's own cost. Deducting more is an offence under the Act.

Sources

EOBI contribution rates; federal minimum wage Rs 40,700 (Finance Act 2026, from 1 July 2026); minimum pension Rs 11,500 from 1 January 2025 (federal cabinet, reported by Dawn 1 Sep 2025): EOBI / Ministry of Finance
Employees' Old-Age Benefits Act 1976, ss.9 and 9B: EOBI

Version 1.0.0 · reviewed 2 Oct 2026. Rates change with the Federal Budget and regulator notifications; we update this tool when they do. Confirm with the primary source before making financial decisions.

Topics:EOBI