How to Run Payroll for the First Time in Pakistan — Founder Guide

Running payroll for the first time as a Pakistani business needs more setup than most founders expect. NTN, bank arrangements, EOBI registration, tax compliance, payroll software, and the first pay cycle itself. Skip a step and you create compliance backlog that surfaces later. Here is the founder's step-by-step.

Step 1 — Get your business registrations right (Week 1-2)

• NTN (FBR registration) — mandatory before paying anyone. Apply via FBR IRIS or your tax practitioner.
• Sales Tax Registration — if applicable to your business model
• Provincial Shops & Establishments registration — in the province where you operate
• SECP company registration (if a registered company)

Step 2 — Open a business bank account

Salary disbursement comes from a corporate account, not the founder's personal. The bank can also set up a payroll services arrangement (bulk credit to employee accounts, often discounted fees).

Step 3 — Register with EOBI (if employing 5+)

If you employ 5 or more workers (within EOBI insurable categories), EOBI registration is required. Online application, employer registration number issued, employee PI numbers assigned per employee. See: EOBI guide.

Step 4 — Register with provincial social security

Depending on your province:

• Punjab: PESSI — see: PESSI guide
• Sindh: SESSI
• KPK: KPESSI
• Balochistan: BESSI

Step 5 — Pick payroll software (do not start with Excel)

Starting with Excel "to keep things simple" is the most common first-payroll mistake. By month 6 you have Excel files for attendance, leave, deductions, advances — none reconciling. Pick payroll software from day 1.

What to look for: Pakistani compliance built-in (EOBI, PESSI, FBR WHT, tax slabs, professional tax), per-employee monthly pricing, mobile app, dual currency if relevant. See: small-business payroll buyer guide.

Step 6 — Configure your payroll software

• Company details (NTN, EOBI registration, provincial SS, address)
• Pay cycle (monthly typically, end of month)
• Working hours (typically 9-to-5 or 9-to-6)
• Leave types (CL 10, SL 8-16, AL 14, maternity, paternity)
• Overtime rates (working / non-working / gazetted multipliers)
• EOBI rate (current notification)
• Provincial SS rate (current notification)
• Tax slabs (current FBR notification)
• Approval workflow (who approves payroll for disbursement)

Step 7 — Add your first employees

Per employee:

• Name, CNIC, joining date, designation, department
• Salary breakdown (basic, allowances)
• Bank account for salary credit
• EOBI PI number (after EOBI registration)
• Provincial SS number (after registration)
• Tax filing status (filer / non-filer)
• Emergency contact

Step 8 — Set up attendance from day 1

Even if you have 3 employees today, set up attendance properly. Face recognition on mobile is cheapest and fastest. See: face attendance setup.

Step 9 — Run a test payroll on a sandbox

Before the first real cycle, run a sandbox payroll with sample data. Verify:

• Basic + allowances calculate correctly
• EOBI deduction shows on payslip
• Provincial SS employer-side liability shown
• WHT calculated per slab
• Net pay matches expected

Step 10 — Run the first real payroll

1. Finalise attendance for the month
2. Verify approved leaves are reflected
3. Check overtime, advances, reimbursements
4. Generate draft payroll
5. Review draft per employee
6. Approve through workflow
7. Disburse via bank file
8. Distribute payslips

Step 11 — File monthly statutory returns

• EOBI monthly contribution + return (typically 7th of following month)
• Provincial SS monthly contribution + return
• FBR section 149 WHT deposit + monthly statement
• Section 153 WHT for contractor payments (if any)

Step 12 — Plan year-end

By end of fiscal year:

• Annual salary tax certificate per employee
• WWF return (if applicable) — see: WWF guide
• EOBI annual return
• Reconciliation: total WHT deducted vs deposited
• Tax practitioner review

What founders usually get wrong

• Starting with Excel ("we'll move to software later" — never happens cleanly)
• Delaying EOBI / PESSI registration
• Wrong tax slab application
• Not having a tax practitioner from day 1
• No attendance setup ("we trust each other" — works until it doesn't)
• No payslip distribution — employees feel disrespected

The Zaffre HRM founder fit

Zaffre HRM ships with Pakistani statutory compliance pre-configured. Founders running first payroll can be configured and running in under a week. Book a demo for a founder-focused walkthrough.

Caveat

Tax and compliance rules change. Always verify against current FBR / EOBI / provincial notifications and consult a tax practitioner. This article is general guidance, not legal or tax advice.