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?

A minimum monthly pension fixed by the government (revised in recent budgets) 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.

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 15 Sept 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.

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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, at a minimum monthly pension set by the government; 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?: A minimum monthly pension fixed by the government (revised in recent budgets) 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.
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): EOBI / Ministry of Finance
Employees' Old-Age Benefits Act 1976, ss.9 and 9B: EOBI

Version 1.0.0 · reviewed 15 Sept 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