Employees are the valuable assets of any company. The non-wage compensation given to employees and their salaries is a part of employee benefits. The purpose of providing these benefits is to ensure the employees’ retention, engagement, and satisfaction. These are a part of their compensation package. Before accepting the job offer, employees also evaluate the perks and benefits being offered to them.
In Pakistan, there are laws which have been particularly formulated to ensure the employees’ rewards. Most businesses have recognized the significance of employee satisfaction to stand out in the market. Benefits motivate employees and enhance their work performance. Following are the two broad categories of employee benefits in Pakistan:
Following is a list of laws along with their application for employee benefits in Pakistan:
This ordinance is not applicable for:
Employees should be compensated in case of any injuries caused at the workplace. Initially, the amount of compensation was related to the employee’s earnings, and those employees were eligible to get this compensation whose earning was less than PKR 6,000. Amendments were made to the laws in 2007, after which these benefits were allotted to all employees.
Suppose any severe disability or death of an employee occurs. In that case, the employer should give compensation of PKR 200,000 to the dependents of an employee, but the compensation amount is increased as follows:
In case of temporary disablement, the business employer has to provide the following benefits:
Compensation is given to the permanent employees under their insurance plan as follows:
An employee who has insurance and has contributed for 90 days in the previous 6 months is eligible to get sickness benefits as follows:
A woman employee who has insurance and has contributed for a minimum of 180 days in the past 1 year will get her full salary for 12 weeks of maternity leave.
If an injured worker with an insurance plan and sickness benefits dies, his survivors will receive the intended benefits. The grant amount is given by multiplying the daily sickness rate by 30. This amount is also referred to as funeral expenses; its minimum amount is PKR 1500. If the husband of an insured woman dies, iddat benefits are also specified under which she is given leave for her iddat and her salaries are paid by the employer during 4 months and 10 days.
The employer has to pay employees for sickness and maternity as their medical benefits such as medicine, hospitals, etc. Medical benefits are provided to dependents for 1 year after the employee’s death who has served the business for at least 1 year. For seasonal employees, medical benefits are given to dependents for 6 months.
If a worker dies due to any workplace injury, then the maximum rate of disablement pension is paid to the dependents in the following percentage:
This survivor pension ends after the survivor’s death, remarriage of a widow, or son becoming older than 21 years.
Following are some of the guaranteed benefits which companies in Pakistan should offer:
According to Pakistan’s labor laws, the following are the criteria for calculating employee benefits:
All monetary and non-monetary employee benefits are taxed unless an exemption is made by law. According to the tax scale of Pakistan, tax increases according to salary and ranges from 0 to 35% tax. The taxation rate thus depends on the income of employees.
In Pakistan, businesses need to provide employee benefits according to the law. For this purpose, consider employees’ requirements and your company’s policies. It would be best to get regularly updated regarding the changes made in employee benefits laws. Providing employee benefits has the following advantages: