EOBI Rules

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Introduction: EOB Act 1976 was enforced with effect from April 01, 1976,

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to achieve the objective of Article 38 (C) of the Constitution, by providing for
compulsory social insurance. It extends following benefits to insured persons
or their survivors:-,

Old-Age Pension

Survivor's Pension

Invalidity Pension

Old-Age Grant

Registration of Employers & Insured Persons under EOB Act 1979

Employees Old-Age Benefits Act is applicable on all firms (industrial or

commercial, including banks) where 5 or more workers, whether
contractual or regular, are employed or were employed during past 12
months. The laws remains applicable even if the number of persons
employed is subsequently reduced to less than five. The business with less
than five employees can get their employees registered with EOBI on
voluntary basis.

Benefits/Pension

Under EOB Scheme, Insured Persons are entitled to avail benefit like, Old-
Age Pension (on the event of retirement), Invalidity Pension (In case of
permanent disability), Old-Age Grant (an Insured Person attained
superannuation age, but does not posses the minimum threshold for
pension) Survivor's Pension (in case an Insured Person is expired)

Kind of Benefits/Pension:

Old-Age Pension

Survivor's Pension

Invalidity Pension

Old-Age Grants

Pension Formula:
 EOBI Rules

(Avg. monthly wages x No. of yrs of Insurable Employment)

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Pension Rates:

Minimum RS. 5,250/=

Maximum As Per Formula

Contribution

EOBI does not receive any financial assistance from the Government for
carrying out its Operations. A contribution equal to 5% of minimum wages
has to be paid by the Employers of all the Industrial and Commercial
Organizations where EOB act is applicable. Contribution equal to 1% of
minimum wages by the employees of said Organizations.

Rates and Assessment.- On and from the first day of July, 1976,
contribution shall be payable every month by the employer to the Institution
in respect of every person in his insurable employment, at the rate of 5%
per cent of his wages in the prescribed manner;

no contribution shall be payable in respect of an insured person who is in

receipt of [Old-age pension] under this Act or has attained the age of sixty
years, or fifty-five years in the case of a woman.

2) Where an insured person does not receive any wages from the employer
for any period, the Institution shall, subject to regulations, determine the
amount of wages with reference to which the contributions shall be
computed.

3) Notwithstanding any agreement to the contrary, the employer shall not

deduct from the wages of an insured person or otherwise recover from him
any portion of [employers share of contribution]
 EOBI Rules

Records and Returns by Employers.- Every employer shall keep such

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records and shall submit to the Institution such returns, at such times, in

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such form and containing such particulars relating to persons employed by
him, as may be provided in regulations.

if an employer fails to maintain records or to submit returns as required by

the regulations, or otherwise fails to comply with the provisions of
sub-section (1) and thereby makes it difficult to ascertain the identity of
persons required to be insured or the amount of contribution payable, the
contribution shall be assessed on the basis of such evidence as the
Institution may find satisfactory for this purpose.

Registration of employers and insured persons: An employer shall

before expiration of thirty days from the day on which the Act becomes
applicable to the industry or establishment in respect of which he is the
employer, communicate to the Institution the name and particulars of the
industry or establishment in Form PR-01 and of every insured person
employed therein in Form PE-01 and, in the case of Form PE-01, give the
receipt appended to the Form to the insured persons.

An insured person may also communicate his name and other particulars to
the Institution in Form PE-02.

On receipt of the requisite particulars in Forms PR-01 and PE-01 from an

employer, the Institution shall register the name of the industry or
establishment in respect of which he is the employer and of the insured
person and issue to the employer a Certificate of Registration in Form PI-02
and to each insured person a Registration Card in Form PI-03.

The institution may send the Registration Card in Form PI-03 to the
employer for delivery to the insured person to whom it relates

Cancellation of Registration of Establishments, Etc.- The Board may,

on the basis of such evidence as the Board may find satisfactory for the
purpose, cancel the registration of any establishment or industry which has
ceased to exist :
 EOBI Rules

Provided that the cancellation of the registration of an establishment

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or industry shall not affect its liabilities incurred before the date of such

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cancellation.]

"Fund" means the Employees' Old Age Benefits Fund

"Industry" means any business, trade, undertaking, manufacture or calling

of employers, and includes any calling, service,
employment, handicraft industrial occupation or avocation of workmen;

"Institution" means the Employees' Old Age Benefits Institution established

or nominated under section 4 [or section 5;]

"Insured person" means [an employee] 3 who is or was in insurable

employment;

"Insurable employment" means employment of a person under a contract

of service or apprenticeship, whether written or oral, express or implied and
in respect of which contributions are payable under this Act;

wages means the rates of wages as declared under the Minimum Wages
for Unskilled Worker Ordinance, 1969.

year, with respect to insurable employment means, a total of three

hundred and sixty-five days for which contribution are payable, or, in the case
of insured persons who are not paid for weekly holidays, a minimum of three
hundred and twelve days.]

Contribution" means the sum of money payable to the Institution by the

employer {or by the Federal Government}4 in respect of an insured person
under the provisions of the Act.

"Employee" means any person employed, whether directly or through any

other person, for wages or otherwise, to do any skilled or unskilled,
 EOBI Rules

supervisory, clerical, manual or other work in, or in connection with the

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affairs of, an industry or establishment, under a contract of service or

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apprenticeship, whether written or oral, express or implied, and includes
such person when laid off {:]]

Provided5[ * * ] that a director of a limited company or of a corporation

set up under any law shall not be treated as an employee under this Act,
irrespective of his wages or emoluments ;]

"Employer", in relation to an industry or establishment, means any

employee, and includes-

in the case of an individual, an heir, successor, administrator or assign;

a person who has ultimate control over the affairs of an industry

or establishment, or where the affairs of an industry or establishment are
entrusted to any other person (whether called a managing agent, managing
director, manager, superintendent, secretary or by any other name), such
other person ;and]

"Employment injury" means a personal injury to an insured person caused

by an accident, or by such occupational disease as may be specified in the
regulations, arising out of and in the course of his employment

Contributions:

1) Subject to sub-section (1) of the section 9 and section 9B of the Act and sub-
rules(4) to (8), contributions shall be payable on and from the date , on which the
Act becomes applicable to the employer.

2) Contributions, falling due, at the end of the month, to which they relate, shall be
paid not later than the 15th of the next following month.

3) For the purpose of computing the contribution, payable every month, at the rate
specified in sub-section (1) of section 9 of the Act, the wage of every person, in
insurable employment, for that month shall be rounded off to the nearest rupee,
that is to say fifty paisa or above shall be treated as one rupee and less than fifty
paisa shall be ignored. The amount of contributions, payable on the total wages of
all persons, in insurable employment for the month shall, in like manner, be
rounded off to the nearest rupee.

4) The employer shall deduct, every month the amount of the insured persons
contribution, payable under section 9B of the Act from his wages.
 EOBI Rules

5) Where wages are received partly in cash and partly in kind, the employer may

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deduct, the insured persons contributions, due for the period from the amount of

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the wages paid in cash.

If no part of the wages of insured person is payable in cash, the employer may
deduct the insured persons contribution from any other payment that he may be
liable to make to his employee.

6) Contributions shall be paid, into the Collection Accounts of the Institution, in the
banks authorized, for the purpose through EOBI Contributions Payment Slips as set
out in Form PR_03 in quadruplicate, by using separate slips, for each Branch or
Sub-Office of an industry or establishment. The employer shall invariable enter the
particulars, regarding payment of contribution, in the Pass Book of respective
insured person.

7) The employer shall file with the institution, information at the time of registration
and thereafter in the month of July every year as set out in form PR-02 for Self-
assessment Scheme and in Form PR-02 for Self-Assessment Scheme and in Form
PR-02A for normal scheme along with copy of paid Challan as set out in form PR-03.
The particulars so submitted shall be treated unchanged constantly until any
change is intimated as set out in Form PR-02B.

8) If the employer does not deduct or deposit the insured persons contribution
payable under section 9B of the Act, the registered insured person can deposit, his
own share of contribution in Challan as set out in Form Pr-03A and produce a copy
of paid Challan along with Pass Book to the nearest office of the Institution for entry
of the particulars regarding payment. The Incharge of said office shall acknowledge
the receipt on the basis of paid Challan, determine the jurisdiction of the
establishment and pass on to concerned office of the Institution a copy of the
Challan collected from the concerned bank for further action under the Act.

9) The payment of contribution made by the employers shall be acknowledged.

Non-payment of contributions on due dates:

If the employer fails to deduct the employees contribution or pay

contribution on due date, the amount payable, shall be increased by two per
cent of such amount for every month or part of a month for which the
amount is in arrears: Provided that the said increase shall not exceed fifty
per cent of the contribution.

Calculation of daily wages for determining Contributions:

 EOBI Rules

Daily wages, for the purpose of contributions, shall be calculated on the

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following basis:-

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i) If the wages is paid on the monthly basis the daily wages shall be the
monthly wages divided by 26;

ii) If the wages is paid on fortnightly basis the daily wages shall be
the fortnightly wages divided by 13;

iii) If the wages is paid on a weekly basis the daily wages shall be
the weekly wages divided by six;

iv) If the wages is paid for part of the month or the week the daily
wages shall be the wages paid divided by the actual number of days
worked.

Maintenance of records and submission of returns by employers:

1) Every employer shall maintain and keep the records hereinafter

mentioned for inspection and verification by the Institution or its officials
authorized for the purpose:

a) Full particulars of all persons employed by him including the

persons in his insurable employment, their occupations, wages,
attendance, dates of entry and exit, insured persons registration
numbers and such other particulars as may be necessary for the
purpose of the proper identification of all persons in his insurable
employment;

b) Pay roll of all persons employed showing therein full details of

the disbursement of wages to them;
 EOBI Rules

c) Duplicate copies of the returns submitted to the Institution.

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d) Such other records which the employer is or may be required to
maintain under the Act or the rules or the regulations or which the
Institution may require the employer to maintain from time to time.

2) Every employer shall preserve the records required to be maintained by

him under this regulation of all persons in his insurable employment
pertaining to the period for which contributions are payable and have
been paid, for a period of two years or until such time as all persons in his
insurable employment have been duly issued PI-03 cards, whichever is the
later: Provided that the Institution may direct an employer to preserve such
record for a longer period, if so required.

3) Every employer shall submit to the Institution a quarterly return in Form

PR-02 containing full particulars of every person in his insurable employment
accompanied by receipted copies of the Contribution Payment Slips in Form
PR-03, prescribed under sub-rule (4) of rule 3 of the Employees Old-Age
Benefits (Contributions) Rules, 1976, in respect of each month of the
relevant quarter, within fifteen days of the end of the quarter to which it
relates.

Explanation:- Quarter means a period of 3 calendar months commencing

from Ist January, Ist April, Ist July and Ist October, each year.

Notwithstanding anything contained in sub-regulation (2) of this regulation,

the Institution shall have powers to condone delay in submission of returns
and extend time for this purpose to the employer showing a reasonable
cause for non-submission of the return within the due date.
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Certificate of Authority:

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i) The certificate by which an official of the Institution may be authorized
to perform the duties specified in Section 12 of the Act shall be in
Form PI-01.

ii) Any certificate issued in such form shall bear a photograph of the
authorized official along with his specimen signature and the official
rubber stamp, common seal of the Institution.

Proof of Age:

An insured person shall submit documentary evidence in proof of his/her

declared age in the insured persons registration form. Following documents,
in order of preference, will be acceptable to the Institution as proof of age:-

a) Certified extract from Municipal Birth Register or other public

register, signed and stamped by a duly authorized officer.

b) Matriculation or equivalent certificate or a certificate from the

Head of a recognized educational/Institution School/College/University
based on the records of that educational institution provided that the
date of birth is mentioned therein.

c) Certified extract from Government records such as Service Book, Civil

List, etc., or from the Service records of joint stock companies,
autonomous bodies, Semi-Government Institution, etc., signed and
attested by a duly authorized officer.

d) Baptismal Certificate.

e) Original horoscope prepared at the time of birth of the insured person

(in case of Hindus only).
 EOBI Rules

f) National

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Identity Card issued under the National Registration Act,
1973.

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g) An affidavit preferably of the parents of the insured person,
otherwise of any elder relative of the insured person having personal
knowledge of the date of birth duly sworn in on a non-judicial stamp
paper of prescribed value. Affidavit will be accepted if it is established
to the satisfaction of the Institution that documentary proof is not
available. Notwithstanding proof of age filed by the insured person,
the Institution reserves the right to call for such other proof of age as
it may deem fit.

Payment of contributions and liability of Employer:

Every employer is liable and shall so remain liable to pay the contribution in
the manner prescribed in the Rules and Regulations.

The liability of the employer to pay contributions in such manner shall not be
extinguished by or depend upon any demand, written or oral being made by
the institution in that behalf.

Functions of EOBI

Identification & Registration of Establishments and Industries.

Identification & Registration of Insured Persons

Collection of Contribution

EOB Fund Management

Provision of Benefits as per Law

Employees Old-Age Benefits Institution (EOBI) manages implementation and enforcement

of this act. EOBI is a semi-autonomous institution working under auspices of Ministry of
Overseas Pakistanis and Human Resource Development (the erstwhile Ministry of Labor
and Manpower). A tripartite corporate Board of Trustees manages working of EOBI where,
 EOBI Rules

along with the Government officials, labour and employer representatives are also present.

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The number of employees registered with EOBI exceeds 3 million while 360,000 of these
registered workers are getting pension benefits. EOBI has detected another 3 million cases

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where contributions on account of employees are not being paid.
Can you please explain more the above-mentioned benefits?
Chapter V of the Act talks about these benefits and requires the payment of monthly old
age pension to an employee if;

He is 60 years of age (in case of a woman worker, age limit is 55 years; age limit is
also 55 years for male miners engaged in mining for at least 10 years of
employment)

Contributions in respect of him/her were paid for at least 15 years

If an insured employee has retired five years before reaching the retirement age, he/she
shall be entitled to an early but reduced old-age pension. In that eventuality, the pension
will be reduced by half a percent (0.5%) on monthly basis or 6% on yearly basis. So, a
reduced pension can be paid to early male retirees from the age of 55 to 59 and female
retirees from the age of 50 to 54.
The Act provides for invalidity or disability pension if an employee sustains an
employment injury, as defined in the act, and suffers an earning capacity loss of at least
67%. In this case, he is entitled to invalidity pension provided that he must have:

At least 15 years of contributions or

At least 5 years of contributions of which at least 3 years must be in insurable

employment

The invalidity pension has to be paid as long as invalidity persists; however, if an employee
has been in receipt of disability pension for at least 5 years, he becomes entitled to invalidity
pension for life. And if a person reaches retirement age while receiving invalidity pension,
his invalidity pension automatically converts into old-age pension
The Act also provides for Survivors Pension (which is equal to minimum pension) after the
death of an insured person in insurable employment for a period of at least 3 years. If the
deceased had become eligible for old age or invalidity pension, the spouse will receive that
pension of deceased for lifetime. In case of death of spouse who was receiving the insured
persons pension, this pension will be divided among children in equal share, until they
attain the age of 18 years (or in the case of girls, before she marries or attains the age of 18
years; whichever comes earlier, however, Since July 2010, daughters can receive this
pension until their marriage). In case an insured person has not left a spouse or children
behind, his parents would be entitled for the survivors pension for a period of 5 years.
Before we talk about old age grant, it seems worth mentioning here that since April
2015,minimum pension (Old-age, invalidity and survivors pension) has been raised from
PKR 3,600 to PKR 5,250. Further, Old Age, Disability and Survivors pensions are
calculated according to a formula explained as under:
 EOBI Rules

Formula for Calculation= 2% of the average monthly earnings in last year X total number of

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years of insurable employment

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In case an employees old age or invalidity pension is less than PKR 5,250, he is to be paid
the minimum pension and if his pension is higher than this amount, he will be paid that
higher amount. It is pertinent to mention here that this law does not allow duplication of
benefits i.e., if an employee is eligible for more than one benefits, he can receive only one
benefit; whichever is higher.
Old-Age Grant is paid to those employees who are not eligible for old-age pension, as they
dont meet the requirement of 15 years of contributions. However, if these employees have
at least completed 2 years of insurable employment, they are entitled to a lump sum
payment of one month of earnings, for each year of insured employment.
You have talked about payment of contributions. Can you please tell the rates of
contribution by employer and employees?
In accordance with Chapter III of the Act, an employer is required to submit his and
employees contribution to a bank designated by EOBI before 15 th of every month. An
employer has to pay contribution equal to 5% of the minimum wage while an employee has
to pay that contribution at the rate of 1% of minimum wage. For Federal areas, the minimum
wage rate at which the contributions are collected has been raised to PKR 13,000 through
an amendment in the Minimum Wages for Unskilled Workers Ordinance, 1969. Thus, in
Islamabad Capital Territory:

An employer has to pay (5% of PKR 13,000= PKR 650)

An employee has to pay (1% of PKR 13,000= PKR 130)

While for Punjab, Sindh, Khyber Pakhtunkhwa (KPK) & Balochistan, the contributions are
still being collected on the minimum wage rate of PKR 8,000 and are as follows:

An employer has to pay (5% of PKR 8,000= PKR 400)

An employee has to pay (1% of PKR 8,000= PKR 80)

So, in total, employers have to submit PKR 780 (or 480 rupees) rupees for every insured
employee, no matter what is his income level. Other than employer and employees, federal
government may also make contribution to make up any deficiencies. It seems relevant to
mention here that even self employed and those not covered under this act can also
become eligible for different benefits mentioned above, if they submit contributions for
required period of time.
You have talked about insured person and insurable employment. Can you please
explain these terms?
In accordance with the provisions of this act, an insured person is the one who is or was in
an insurable employment while this insurable employment is the one for which contributions
are payable. As mentioned before, this act is applicable to all types of establishments where
5 or more persons are employed directly or indirectly.
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Records & Returns to be Maintained & submitted by Employer:

a) Particulars of all employees.

i) Employee Name
ii) Fathers/Husbands Name Gender
iii) Date of birth
iv) CNIC number
v) Date of joining.
vi) Date of separation from job.
vii) Attendance records,
viii) Address
ix) Nature of disability (if any).
x) Detail of previous employments (if any).
xi) insured persons registration numbers
b) Total number of Employees engaged:
i) Permanent employees.
ii) Temporary/Daily wages, Piece rated employees.
iii) Contractual employees engaged directly or indirectly.
iv) Other employees engaged in or in connection with the affairs of establishment.
c) Actual amount of wages paid to employees.
d) Amount of contribution paid.
e) Number of employees in respect of whom contribution has been paid.
f) Record of Payroll/wages statements

From Purpose of submitting

PR-03-1 Contribution Payment Slip (Copy A Employer)
PR-03-2 Contribution Payment Slip (Copy B EOBI/HO)
PR-03-3 Contribution Payment Slip (Copy C EOBI Region)
PR-03-4 Contribution Payment Slip (Copy D Bank)

PI-03 EOBI Card of Insured Persons.

FORM: PE-01 APPLICATION FOR EMPLOYEES REGISTRATION
FORM PE-02 APPLICATION FOR INSURED PERSON

PR-02 For Self Assessment Scheme

PR-02 A (For Normal Scheme)
PR-02-A {Revised) Statement of Employees FOR WHOM CONTRIBUTION HAS BEEN
DEPOSITED BY THE EMPLOYER for the Financial Year (July to
June)
 EOBI Rules

PR-02B (For new entrants/Exit)

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Maintenance of records and submission of returns by employers:

1) Every employer shall maintain and keep the records hereinafter

mentioned for inspection and verification by the Institution or its officials
authorized for the purpose:

a) Full particulars of all persons employed by him including the

persons in his insurable employment, their occupations, wages,
attendance, dates of entry and exit, insured persons registration
numbers and such other particulars as may be necessary for the
purpose of the proper identification of all persons in his insurable
employment;

b) Pay roll of all persons employed showing therein full details of

the disbursement of wages to them;

c) Duplicate copies of the returns submitted to the Institution.

d) Such other records which the employer is or may be required to
maintain under the Act or the rules or the regulations or which the
Institution may require the employer to maintain from time to time.

2) Every employer shall preserve the records required to be maintained by

him under this regulation of all persons in his insurable employment
pertaining to the period for which contributions are payable and have
been paid, for a period of two years or until such time as all persons in his
insurable employment have been duly issued PI-03 cards, whichever is the
later: Provided that the Institution may direct an employer to preserve such
record for a longer period, if so required.
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3) Every employer shall submit to the Institution a quarterly return in Form
PR-02 containing full particulars of every person in his insurable employment
accompanied by receipted copies of the Contribution Payment Slips in Form
PR-03, prescribed under sub-rule (4) of rule 3 of the Employees Old-Age
Benefits (Contributions) Rules, 1976, in respect of each month of the
relevant quarter, within fifteen days of the end of the quarter to which it
relates.