Pakistan's Advanced Total Rewards Model (Compensation & Benefits)

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https://ko-fi.com/s/67981308e2

Overview

If you are an HR Director, CFO, Company Secretary, People Operations lead, or management consultant working with large, listed companies on the Pakistan Stock Exchange or large private companies, this is the only Excel model you will ever need for compensation planning, statutory compliance, and total rewards analysis.

This is not a basic payroll sheet with a few salary columns. This is a fully integrated, professionally engineered financial model built to the exact statutory and regulatory requirements of Pakistan's corporate landscape - the Companies Act 2017, the Income Tax Ordinance 2001 as amended by Finance Act 2025, the EOBI Act 1976, the Standing Orders Ordinance 1968, and the PSX Code of Corporate Governance 2019.

Every output, from an individual employee's monthly net take-home to the company's total annual statutory obligations, flows automatically from a single master control panel. Change one assumption and the entire workbook updates across all twelve sheets instantly.

What Makes This Workbook Different

Most Pakistan HR Excel templates you find online fall into one of two categories: either a simple salary slip with basic and allowances, or a generic Western compensation model that ignores Pakistan's unique statutory landscape entirely. This model is neither.

It was built from the ground up for the specific realities of running HR and compensation for a PSX-listed public limited company or a private limited company, the Remuneration Committee governance requirements, the FBR withholding tax obligations, the provincial variation in EOBI and social security rates, the recognized provident fund tax exemption mechanics, the mandatory gratuity accrual under Standing Orders, and the PSX ESOP and share appreciation rights framework under the Income Tax Ordinance.

It is also the only Pakistan compensation model currently updated for FY 2025-26 with the full Finance Act 2025 changes, including the landmark reduction of Slab 2 from 5% to 1%, the revised fixed tax amounts across Slabs 3 through 6, and the new 9% surcharge on income exceeding Rs. 10 million.

FY 2025-26 Updates - What Changed and Why It Matters

The Finance Act 2025 introduced the most significant restructuring of the salaried income tax schedule in several years. Every formula in this workbook has been rebuilt to reflect the new structure precisely:

Slab 2 — Annual income Rs. 600,001 to Rs. 1,200,000: rate cut from 5% to 1%. An officer on Rs. 90,000 per month now pays approximately Rs. 4,800 per year in income tax, down from Rs. 24,000 — an 80% reduction that meaningfully improves net take-home at the junior grade levels.

New 9% Surcharge — Any employee whose annual taxable income exceeds Rs. 10,000,000 now pays an additional 9% on their total computed tax. This affects MDs, CEOs, and SVPs at major listed PLCs and is fully modelled in the FBR Tax Calculator and Employee Roster sheets.

New Pension Tax Relief — Pensions up to Rs. 10,000,000 are now taxed at 0%, with a flat 5% rate on amounts above that threshold for individuals under 70. This is noted in the Parameters sheet for listed PLC retirement planning.

Provincial Minimum Wage Increase — Punjab, Sindh, and KPK each raised the minimum wage from Rs. 37,000 to Rs. 40,000 per month, effective July to September 2025. This directly increases EOBI employer contributions from Rs. 1,850 to Rs. 2,000 per employee per month, and SESSI/PESSI from Rs. 2,220 to Rs. 2,400 per employee per month in those provinces. The ICT and federal minimum wage remains Rs. 37,000 as confirmed by Finance Minister Muhammad Aurangzeb on June 10, 2025.

Federal Government Pay Raise — A 10% salary increase for all federal government employees (Basic Pay Scales 1 through 22) was announced in Budget 2025-26, effective July 1, 2025, alongside a 7% pension increase. This serves as a floor benchmark signal for listed PLCs setting their own merit increase budgets. The merit increase benchmark in this workbook has accordingly been updated to 15%, reflecting the consensus range of 12% to 18% being applied by PSX-listed companies in response to inflation running at approximately 20% to 25%.

A Note on Customisation

Every assumption is labeled, color-coded, and documented with a note. The model is designed to be extended. You can add more employees by copying roster rows, add new salary grades by inserting Pay Band rows, change the provincial minimum wage basis from Sindh to Punjab or KPK by updating two cells in Parameters, and add a second company entity by duplicating sheets. Because the architecture is fully transparent and unlocked, you own it completely and can adapt it.

Bonus:
Total Rewards Statement snippets for each employee. One for internal consumption of management and one for external dissemination to employee. If you update any salary or assumption in the model, both statements reflect the change automatically without any manual edits.

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