The average salary in Pakistan is 81,800 PKR (Pakistani Rupee) per month, or around USD 287 according to the exchange rates in May 2023.
The Pakistan average is significantly lower than the US average (USD 7,900) but comparable to India (USD 430), Ukraine (USD 858), and the Philippines (USD 884). It’s one of the many reasons why Pakistan is a viable alternative to these popular outsourcing destinations.
However, you’ll need a more comprehensive analysis to understand the total expenditure on a Pakistani employee.
In this article, we’ll share vital figures and comparisons related to the average salary in Pakistan. We’ll also explore the country’s payroll rules and top reasons to outsource there.
Table of Contents
- Average salary in Pakistan: Key figures
- Payroll rules in Pakistan
- How does average income in Pakistan compare with other countries?
- 3 reasons to outsource to Pakistan
Let’s get started.
Average salary in Pakistan: Key figures
The average salary figure for a country is the sum of the salaries of the working population divided by the total number of employees. It may also include benefits such as housing, transport allowance, insurance, etc., on top of the employee’s basic salary.
The average salary is usually a good indicator of the typical income of a working citizen in the country.
Here are some key salary figures for Pakistan according to Salary Explorer, a salary comparison website:
According to Salary Explorer, the average remuneration in Pakistan may vary between 20,700 PKR per month (average minimum salary) and 365,000 PKR per month (maximum average). Please remember that this is an average salary range, and the actual maximum salary may be higher.
The median salary in Pakistan is 70,400 PKR per month.
If we sort the employee salaries in Pakistan in ascending or descending order, the median represents the central point in the distribution. In other words, half the Pakistani employees earn more than 70,400 PKR per month, while the other half earn less.
These national average salary figures may give you a general estimate and help compare expenditure on employee salaries among different countries.
But it won’t help you determine the exact remuneration for each employee in your company.
For that, you’ll need to consider other factors like
- The type of industry.
- Years of experience and qualification of the employee.
- The kind of work: entry level, professional, etc.
- The mode of work: full-time, part-time, remote, etc.
- The region where you are operating.
- The cost of living in the country.
So let’s take a more comprehensive look at the salary information in Pakistan.
A. Average salary by industry
The average salary in a country may vary significantly with the type of industry.
Pakistan is known for its cotton, textile, and agriculture exports, and these industries have a significant share in the country’s GDP. Due to this reason, the manufacturing sector usually employs a large portion of the Pakistani workforce.
Here’s an industry-wise breakdown of the average salaries in Pakistan:
|Industry||Average Monthly Salary|
|Information Technology||82,100 PKR|
|Real Estate||92,600 PKR|
|Media / Broadcasting||75,200 PKR|
B. Average salary by region
While the capital city of Islamabad is the administrative center of the country, Karachi and Lahore are the major commercial hubs in Pakistan.
The average employee salary in the country depends on which city you’re operating in.
Here’s the salary report for major Pakistani cities:
|City||Average Monthly Salary|
C. Salary variations by education
As a general rule of thumb, a Pakistani employee with higher educational degrees gets a higher pay scale than their peers with a lesser degree for the same type of work.
But how does the pay scale change with the education level?
According to Salary Explorer:
- Employees with a diploma or certificate usually earn 17% more than those fresh out of high school.
- Employees with a bachelor’s degree have 24% higher average salaries than certificate and diploma holders.
- Professionals with post-graduate degrees enjoy a 29% salary gain over bachelor’s degree holders.
- Advanced degrees such as a Ph.D. fetches 23% more income than those with a master’s degree.
D. Salary variations by experience level
The salary scale of a Pakistani employee also varies significantly with the years of experience they have.
Employees with experience between two to five years earn 32% more salary than freshers. The salary gain is even higher (36%) when employees reach the five-year experience mark.
The subsequent salary hikes at ten, fifteen, and twenty-year milestones are about 21%, 14%, and 9%, respectively.
E. Annual salary increment rate
Employees in Pakistan are likely to get a salary increment of 8% every 19 months. In contrast, the world average is significantly lower at a 3% increment every 16 months.
The average annual salary increment rate is 5%.
1. Average annual salary increment by industry
IT and healthcare professionals generally get the highest salary increments in Pakistan.
Here’s how the salary increase rate in Pakistan varies with industry:
|Industry||Average Annual Increment|
2. Average annual salary increment by experience
The average increment rate also varies with the years of experience an employee has.
|Experience Level||Average Annual Increment|
F. Minimum average wage
The minimum wage is the minimum remuneration that employers must pay to their hourly wage workers.
The minimum wage in Pakistan varies with its provinces and is regulated by their respective governments to safeguard the interest of a daily wage worker.
Here’s the minimum wage data for each province:
|Province||Monthly Minimum Wage|
|Islamabad Capital Territory||20,000 PKR|
|Khyber Pakhtunkhwa||21,000 PKR|
So the lowest monthly minimum wage in Pakistan is 17,500, or about USD 107. In contrast, the lowest monthly wage in the USA stands much higher at USD 1,257.
However, the Pakistani minimum wage could be fairly compared with other Asian and Latin American offshoring hubs, such as India (appr. USD 61), Mexico (appr. USD 183), and the Philippines (appr. USD 162).
G. Average salary for popular job Titles
IT and healthcare-related job titles such as software engineer, programmer, dentist, etc., generally command a good salary package in Pakistan.
Let’s take a look at the average salary information for some popular jobs in Pakistan:
|Job Title||Average Monthly Gross Salary|
|Software Engineer||73,500 PKR|
|Graphics designer||50,700 PKR|
|Chartered Accountant||71,000 PKR|
|Electrical Engineer||80,000 PKR|
|Human Resources Manager||127,000 PKR|
|Business Development Manager||124,000 PKR|
Disclaimer: The salary information mentioned in the article is taken from various external salary surveys. The actual figures may vary with location, employee experience, and the latest job trends.
Payroll rules in Pakistan
How does staying updated on payroll laws help you?
For overseas employers, it may help estimate the actual cost of an employee by summing up taxes, social security contributions, and other compensations they are obliged to pay. It also helps them stay compliant with payment and other labor laws.
As for employees, they get a better idea of their disposable income by factoring in income tax and other mandatory deductions over their base salary.
All Pakistani companies with twenty or more employees must draw a formal employment contract with the employees, stating the salary, additional compensations, working hours, etc.
Employers must contribute 5% of the employee’s base salary towards the pension fund compared to the employee’s contribution of 1%. These deductions aren’t applicable for employees earning more than PKR 400 a day or PKR 10,000 a month.
Additionally, profitable companies with more than 20 employees are required by law to share their profit margins with the employees. They must pay a profit bonus to an employee who offered at least 90 days of service in a year.
How does average income in Pakistan compare with other countries?
It’s a good practice to analyze and compare a country’s standard income from different perspectives to better assess how it applies to your business.
As per the World Bank, the gross national income (GNI) per capita in Pakistan is around USD 1,470. For reference, the GNI per capita for India and the US is USD 2,150 and 70,930, respectively.
According to Salary Explorer, the average hourly wage in Pakistan is 470 PKR (USD 1.65). In comparison, employees in the USA, India, and Ukraine earn USD 46, 2.43, and 4.83 per hour, respectively.
Another way to gauge average income is to consider the earnings of a family in the country.
According to CEIC data, the annual household income per capita in Pakistan is around USD 587. CEIC data states that the annual figure is calculated using the data for monthly average income and average household size provided by the Pakistan Bureau of Statistics.
The average household income for other Asian countries like Oman and Bangladesh is around USD 4,964 and 603, respectively.
3 reasons to outsource to Pakistan
Pakistan has been one of the major exporters of textile and agri-products, besides other Asian competitors like China, Bangladesh, India, and Vietnam.
Due to its strategic location, the country acts as a bridge between eastern and western Asia (and Europe), making it a cost-effective outsourcing and offshoring destination.
In recent years, Pakistan is also witnessing a growing number of foreign IT and ITES (Information Technology Enabled Services) companies outsourcing their business processes to the country.
Let’s take a look at some major reasons behind this surge.
1. Alternative to over-saturated markets
Tech outsourcing has traditionally been a stronghold of countries like India, Ukraine, Poland, the Philippines, etc.
Due to their popularity, these markets are often overcrowded, leading to high service costs. A startup may often find it hard to find a good outsourcing vendor at affordable rates.
They either have to overshoot their budget to hire a vendor of choice, limiting their bottom line. Or, they might have to settle for an inexperienced vendor, which affects their production quality and quantity.
Pakistan offers a solid alternative to such companies by broadly offering similar benefits as these markets while keeping the operating costs low.
2. Young and skilled workforce
Around 65% of the Pakistani population is below the age of 30, making it one of the youngest workforces in the world. In 2021, the median age in Pakistan is 22.8 years.
Pakistan also has the 3rd largest English-speaking population in the world. It’s one of the top countries to send students to universities in the US and UK for higher education.
Moreover, technical education in the country has taken some massive leaps in recent years. Over 80,000 IT-related educational institutions in the country ensure the steady availability of skilled IT professionals.
Pakistani tech professionals are also highly sought-after on freelance platforms like Upwork for offering quality services at competitive rates. Job titles like web developer, graphic designer, software engineer, etc., are in great demand and fetch high salaries in Pakistan.
3. Fast-growing tech infrastructure
Pakistan is rapidly upgrading its technological infrastructure to meet the requirements of tech outsourcing companies.
All major Pakistani cities now offer stable internet connectivity through fiber optic and cellular networks. It helps teams stay connected and enhances collaboration.
Pakistan also has strong data protection and IP (intellectual property) laws to safeguard both the companies and the customers.
Pakistan is a viable outsourcing destination, especially if you’re operating with a limited budget and aim to maximize your profit margins.
However, estimating the expenditure on a Pakistani workforce could be tricky for foreign companies.
You can use the salary information in this article to choose a suitable pay scale for your employees while staying compliant with payment laws in Pakistan.