What Is a Salary Slip and Why Does It Matter?
A salary slip (also called a pay slip or pay stub) is a formal document issued by an employer each month that details an employee's earnings and deductions for that pay period. In Pakistan, salary slips serve multiple practical purposes beyond just showing take-home pay:
- Required for visa applications (UK, Schengen, US all require proof of salary)
- Used by banks for loan eligibility assessment
- Required for renting property in many cities
- Needed for income tax filing and verification
- Useful for EOBI and PESSI record verification
Understanding each component of a salary slip in Pakistan ensures you know exactly what you are earning, what is being deducted, and whether the deductions are correct.
Components of a Pakistani Salary Slip
Earnings (Gross Pay)
Pakistani salary structures typically include multiple allowance components:
- Basic salary: The foundation of your pay package. Usually 40–60% of gross pay. All deductions are calculated as a percentage of basic salary.
- House Rent Allowance (HRA): Typically 40–50% of basic salary. Partially exempt from income tax if you are living in rented accommodation.
- Medical allowance: Usually Rs 5,000–15,000/month or 10% of basic. Often tax-exempt up to specified limits.
- Conveyance allowance: Transport reimbursement, commonly Rs 3,000–8,000/month.
- Other allowances: Utility, telephone, meal, or special allowances depending on the company.
Deductions
- Income tax (WHT): Withheld at source by the employer based on your annual projected income and the applicable FBR tax slab.
- EOBI contribution: Employee share is Rs 370/month (fixed). Employer contributes an additional Rs 1,110/month to the Employees' Old-Age Benefits Institution fund.
- PESSI (Punjab) / SESSI (Sindh): Employees working in Punjab are covered by PESSI; in Sindh by SESSI. The employee contribution is 6% of basic salary, deducted monthly. This funds medical treatment and other social security benefits.
- Provident fund: Where applicable, 8.33% of basic salary. Not all companies offer this.
Worked Example: Rs 80,000 Gross Salary
Let us build a complete salary slip for an employee in Lahore earning Rs 80,000 gross monthly:
Earnings Breakdown
- Basic salary: Rs 40,000 (50% of gross)
- House Rent Allowance: Rs 20,000 (50% of basic)
- Medical allowance: Rs 10,000
- Conveyance allowance: Rs 6,000
- Utility allowance: Rs 4,000
- Gross salary: Rs 80,000
Deductions Breakdown
- Income tax: Annual salary = Rs 80,000 × 12 = Rs 9,60,000. Using 2024–25 FBR slabs: Rs 30,000 + 15% of (Rs 9,60,000 − Rs 12,00,000 excess over Rs 600,000). Wait — Rs 9,60,000 falls in the Rs 600,001–Rs 1,200,000 slab. Tax = 5% × (Rs 9,60,000 − Rs 6,00,000) = 5% × Rs 3,60,000 = Rs 18,000/year = Rs 1,500/month
- EOBI: Rs 370/month (fixed regardless of salary)
- PESSI: 6% of basic = 6% × Rs 40,000 = Rs 2,400/month
- Total deductions: Rs 4,270/month
Net Pay
Net take-home pay: Rs 80,000 − Rs 4,270 = Rs 75,730/month
EOBI: What Your Rs 370 Pays For
EOBI (Employees' Old-Age Benefits Institution) provides a pension to registered workers upon retirement. The current benefit is a monthly pension of Rs 10,000–15,000 for eligible retirees. While the pension amount seems modest, registration as an EOBI contributor is also required for certain government benefits and establishes your formal employment record.
Both employer and employee registration with EOBI is mandatory for companies with 5+ employees. Your salary slip should show your EOBI registration number.
PESSI vs SESSI: Provincial Social Security
- PESSI (Punjab Employees Social Security Institution): Covers workers in Punjab with wages up to Rs 25,000/month basic (registration threshold). Provides free medical treatment at PESSI hospitals for registered workers and their families.
- SESSI (Sindh Employees Social Security Institution): Equivalent in Sindh with similar coverage and contribution structure.
The 6% employee contribution is deducted from basic salary only, not from allowances. Employers contribute an additional 6% of basic salary to the social security fund.
Generating a Salary Slip
If your company does not issue formal pay slips, or if you are self-employed and need to generate one for loan or visa applications, use the Rafiqy Salary Slip Generator. Enter your earnings breakdown and applicable deductions, and it produces a professionally formatted salary slip PDF that includes all mandatory fields.
For accurate tax deduction amounts, use the Rafiqy Tax Calculator to determine the correct monthly WHT before entering it on your salary slip.
Need a professionally formatted Pakistani salary slip with all statutory deductions calculated?
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