EOBI and Sindh Social Security (SESSI): What Employers Must Register and Pay

For many small and medium businesses in Karachi, EOBI and social security only come up when an inspector visits or a former employee asks why there is no record of contributions. By then, arrears and late-payment increases may already have built up. This guide explains the two schemes, what they currently cost and how to stay compliant.

Two different schemes

Employers in Sindh deal with two separate institutions:

• EOBI (Employees’ Old-Age Benefits Institution) under the Employees’ Old-Age Benefits Act, 1976. It pays old-age pensions and related benefits, such as invalidity and survivors’ pensions, to insured persons.
• SESSI (Sindh Employees’ Social Security Institution) under the Sindh Employees’ Social Security Act, 2016, as amended in 2018. It provides medical care and cash benefits to secured workers and their dependants.

Registration with one does not cover the other. Each has its own registration, contribution, deadlines and inspections.

EOBI: who registers and what it costs

The EOB Act applies to industrial and commercial establishments in which the threshold number of persons is employed, and EOBI also allows voluntary coverage. Employers should check coverage as soon as they begin hiring rather than waiting for a notice.

The contribution is calculated on the minimum wage, not on each employee’s actual salary:

• Employer: 5% of the minimum wage per insured person per month.
• Employee: 1% of the minimum wage, deducted from salary.

An EOBI circular dated 20 August 2026 applied the revised minimum wage of Rs 40,700 per month from 1 July 2026. That gives:

• Employer share: Rs 2,035 per insured person per month.
• Employee share: Rs 407 per insured person per month.
• Total: Rs 2,442 per insured person per month.

Because the base is the minimum wage, a senior manager and a junior worker cost the employer the same EOBI contribution. Payroll systems that still use the previous minimum wage will under-pay from July 2026 and build arrears, so update the figure and check whether any difference for earlier months needs to be paid.

Contributions are deposited monthly through EOBI’s designated channels. Keep the challans, the list of insured persons and the payroll register for each month, as these are what an EOBI officer will ask to see.

SESSI: who registers and what it costs

The SESSI scheme applies to establishments in areas and from dates notified by the Sindh Government, and to the workers employed in them. Once an establishment is covered, it is liable to contribute from the date of coverage.

Under Section 20 of the SESSI Act, the employer pays a contribution at the rate of six per cent for every employee, whether employed directly or through any other person, within wage limits set by the government. The employer may not deduct this contribution from the employee’s wages. SESSI links its wage limits to the minimum wages notified under the Sindh Minimum Wages Act, 2015, and issues notifications when those change, with limits that can differ by skill category.

Section 21 allows employers to opt for a self-assessment scheme. SESSI’s published guidance says that under it, the employer pays 6% of the minimum wage limit per secured employee per month plus Rs 40 per month as the worker’s share, and is exempted from annual verification of records for two years.

Under Section 22 and the Social Security (Contribution) Rules, 2019, employers must give SESSI details of their secured workers on the prescribed form. Contributions can be paid online through 1-Link, as SESSI’s procedure describes. Before running payroll for a new financial year, check SESSI’s latest notification for the wage limits that apply, as they usually follow changes in the Sindh minimum wage.

Late payment and default

Both institutions can inspect records, assess contributions and recover arrears. For SESSI, its published procedure states that:

• late contributions attract an increase of half a per cent per day, up to a maximum of 50% of the principal, under Section 24(1); and
• contributions due and the increase may be recovered as arrears of land revenue under Section 24(2).

The EOB Act also provides for recovery of unpaid contributions and additional charges, and for penalties for offences under the Act. Apart from money, default affects employees directly: a worker whose contributions were not paid may face difficulty proving insurable service for a pension, and disputes about unpaid contributions often surface alongside termination or gratuity claims.

If you receive an assessment or notice, do not ignore it. Check the period covered, the number of workers and the wage base used, compare them with your records, and respond in writing within the time given. Assessments can be challenged through the procedures in each law, but deadlines apply.

A compliance checklist

• Confirm whether your establishment is covered by EOBI, SESSI or both, including branches outside Karachi.
• Register the establishment and each eligible employee, and keep registration certificates on file.
• Update payroll for the current minimum wage (Rs 40,700 for EOBI from 1 July 2026) and SESSI’s latest wage limits.
• Deduct only the employee shares, and show them clearly on payslips.
• Pay every month by the due date, and keep challans with the payroll register.
• Include workers engaged through contractors in your review, and ask contractors for proof of their contributions.
• Register new joiners promptly and record leavers.
• Consider SESSI’s self-assessment scheme if predictability suits your business.
• Reply in writing to any notice or assessment, within time, with supporting records.
• Review compliance once a year, ideally before the July payroll.

Getting registration right at the start is far easier than unwinding years of arrears later. If your records are incomplete, a structured review can show where you stand before an inspection does.

Disclaimer: This article is general information about the law in Pakistan as at the date shown. It is not legal advice and does not create a lawyer-client relationship. Laws, fees and procedures change; please take advice on your own facts before acting.