Employees Old Age Benefit Institute (EOBI) has a pre-defined government-approved formula to calculate employer and employee’s monthly contribution deduction from their salaries. The salary deduction formula is very simple to understand and it is applicable across the country.
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| EOBI Deductions From Salary Calculator |
However, whenever Govt increases the minimum wage, the
said formula is applied as it is with the effective date announced by the Federal
Govt Ministry of Finance.
Following is an EOBI Salary Calculator Example:
Salary: Rs. 25,000
EOBI Contribution (Employee): (1% of Salary) Rs. 250
EOBI Contribution (Employer): (5% of Salary) Rs.1250
Total EOBI Deduction: (Employee &Employer
Contribution) Rs. 1500
Some Additional Information Regarding:
The Employees' Old-Age Benefits Institution (EOBI) is a
statutory body established by the Government of Pakistan in 1976.
The EOBI provides social security benefits to employees
in the private sector, including old-age pensions, survivor benefits, and disability
benefits.
Employees are required to contribute 1% of their salary
to the EOBI, while employers are required to contribute 5% of their employees'
salaries.
What is The % of EOBI Contributions?
The EOBI has the authority to collect contributions from employers and employees on a monthly basis. The contribution rate for employers is 5% of the employee's basic salary, while the contribution rate for employees is 1% of the employee's basic salary.
The maximum contribution that can be paid
by an employer or employee is Rs. 1500 per month.
The EOBI uses the contributions it collects to provide
social security benefits to employees. These benefits are applicable to the
employees in the shape of:
Employee Old Age Pension:
The EOBI provides old-age pensions to employees who have
reached the age of retirement and have completed a minimum of 10 years of
service. The pension amount is calculated based on the employee's basic salary
and the number of years of service.
Employees Survivor benefits:
The EOBI provides survivor benefits to the dependents of
employees who have died while in employment. The survivor benefits include a
lump sum death grant and a monthly survivor pension. The amount of the death
grant and the survivor pension is calculated based on the employee's basic
salary and the number of years of service.
Employee's Disability Benefits:
The EOBI provides disability benefits to employees who have become permanently disabled as a result of an accident or an occupational disease. The disability benefits include a lump sum disability grant and a monthly disability pension.
The amount of the disability grant and the
disability pension is calculated based on the employee's basic salary and the
number of years of service.
The EOBI is a valuable social security institution that
provides much-needed benefits to employees in the private sector. The EOBI's
contributions are an important source of funding for these benefits.
How is the EOBI contribution calculated?
The EOBI contribution is due on the 30th of every month. Private
employers are required to deduct the EOBI contribution from their employees' monthly
wages and deposit the contributions to the EOBI by the end of every month.
Employees are not required to make any direct payments to the EOBI.
The EOBI contribution is used to provide social security
benefits to employees, such as old-age pensions, survivor benefits, and
disability benefits. The EOBI is a valuable social security institution that
provides much-needed benefits to employees in the private sector.
Some Examples of How the EOBI Contribution Would be
Calculated For different employees:
- Employee A: Basic salary of Rs. 25,000 per month.
- Employer's Contribution: Rs. 1250 (5% of Rs. 25,000).
- Employee's Contribution: Rs. 250 (1% of Rs. 25,000).
- Employee B: Basic salary of Rs. 25,000 per month.
- Employer's Contribution: Rs. 250 (5% of Rs.2 5,000).
- Employee's Contribution: Rs. 50 (1% of Rs.2 5,000).
Who Is Eligible for EOBI?
The Employees' Old-Age Benefits Institution (EOBI)
provides social security benefits to employees in the private sector. The
following employees are eligible for EOBI benefits:
- Employees who are working in an establishment that is covered by the EOBI:
- Employees who are at least 18 years of age and not more than 60 years of age:
- Employees who are earning a minimum of Rs. 25,000 per month:
- Employees who have completed a minimum of 3 years of service in the preceding 36 months.
- Employees who are not eligible for EOBI benefits:
Employees who are working in establishments that are not
covered by the EOBI:
- Employees who are self-employed:
- Employees who are working in the government sector:
- Employees who are working in establishments that are registered with the Employees' Provident Fund (EPF)
Employees who are eligible for EOBI benefits can avail of
the following benefits:
Old-age pension: The EOBI provides old-age pensions to employees who have reached the age of retirement and have completed a minimum of 10 years of service. The pension amount is calculated based on the employee's basic salary and the number of years of service.
Survivor benefits: The EOBI provides survivor benefits to
the dependents of employees who have died while in employment. The survivor
benefits include a lump sum death grant and a monthly survivor pension. The
amount of the death grant and the survivor pension is calculated based on the
employee's basic salary and the number of years of service.
Disability benefits: The EOBI provides disability
benefits to employees who have become permanently disabled as a result of an
accident or an occupational disease. The disability benefits include a lump sum
disability grant and a monthly disability pension.
The amount of the disability grant and the disability
pension is calculated based on the employee's basic salary and the number of
years of service.
Employees who are eligible for EOBI benefits can apply
for these benefits by submitting an application to the EOBI office in their
area. The application must be accompanied by the following documents:
Identity Proof (e.g., CNIC).
Proof of employment (e.g., employment contract).
Proof of service (e.g., service record).
Proof of contribution (e.g., EOBI contribution
certificate).
The EOBI will process the application and will notify the
employee of the decision. If the application is approved, the EOBI will start
paying the benefits to the employee.
Frequently Ask Questions:
What Is The EOBI Calculation Formula From Salary?
A contribution equal to 5% of minimum wages has to be
paid by the Employers of all the Industrial and Commercial Organizations where the EOBI act is applicable.
How Much Minimum Wage in Pakistan for EOBI?
25000 is illegal and without any legal base, EOBI has
also made changes in the online portal demanding contributions at the increased
minimum wage rate of rupees 25000 in all four provinces, the matter can be
challenged in all 4 provincial high courts.
Which Employees Are Eligible for EOBI?
This is mainly offered to all insured individuals after retirement if they have completed at least 15 years of insured service. The retirement age for men is 60, and for women, it is 55. Those in the mining profession must serve the mining industry for at least 10 years before retirement to apply for this pension.
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