EOBI Registration: Secure Your Future with Ways Tax
The Employees’ Old-Age Benefits Institution (EOBI) is an important government program in Pakistan, with 9,886,259 registered participants. It ensures workers financial stability once they retire.
As an employer, employee, or business owner, you can protect your workforce’s future by ensuring your EOBI registration is correct. It can be difficult to keep up with the registration process’s details, though. This is where Ways Tax enters—our skilled services assure a quick and hassle-free EOBI registration process.
What is EOBI?
Under the EOBI Act of 1976, EOBI is a social insurance scheme run by the Pakistani government. This program’s primary goal is to give employees pensions at retirement in addition to other benefits like invalidity and survivor pensions.
This fund is funded by contributions from both companies and employees. Over time, the fund grows and is eventually paid out as a monthly pension.
Who is Eligible for EOBI Registration?
Every establishment that employs 10 or more people is mandatorily required to be registered with EOBI.
To offer EOBI benefits to their staff, businesses with fewer than ten employees may choose to voluntarily register.
To put it briefly, any company or organization with 10 or more employees is required by law to register. Smaller companies may choose to do so voluntarily to offer their staff pension benefits and long-term financial stability.
Documents Required for EOBI Registration
You must send a list of necessary papers to the relevant authority to successfully make an EOBI claim. Whether you are a living insured person or a surviving relative requesting benefits on behalf of a late insured person, the documentation varies slightly.
The breakdown of the paperwork needed for each scenario is provided below:
1. Documents for Insured Individuals (Alive)
- PI-03, the EOBI Registration Card (if available)
- A copy of your CNIC (Computerised National Identity Card)
- Certificate of employment
2. Documents for Insured Individuals (Deceased) – Claimed by a Surviving Relative
- EOBI Registration Card PI-03 (if available)
- Certificate/Proof of Employment (for the deceased)
- Copy of CNIC (of the deceased)
- Nikah Nama (for widow/widower claims)
- Death Certificate (issued by NADRA)
- Proof of Relationship with the Deceased (Family Registration Certificate (FRC) issued by NADRA)
The EOBI Registration Process
Registration for EOBI is required, although it can be difficult. Employers are expected to file the necessary paperwork.
They should register both themselves and their staff, and ensure that the monthly payments are computed and deposited accurately. Ignoring even one step can cause problems later on, such fines or lost benefits for employees.
The procedure consists of:
Employer Registration:
- The employer must register their business with EOBI, which involves filling out forms, submitting relevant documents, and confirming company details.
Employee Registration:
- After the employer’s registration, each employee must be registered to ensure they are entitled to benefits. This involves providing employee information such as CNIC and other personal details.
Monthly Contributions:
- Employers are required to deposit monthly contributions for each registered employee. The contributions are split between employer and employee.
Annual Audits:
- To maintain compliance, businesses must keep records and ensure they meet annual audit requirements set by the EOBI.
Official Fee for EOBI Registration
Each month, the employee and the employer contribute to the EOBI registration cost system. That looks like this:
Contribution Breakdown
- Employer Contribution:
- The employer is required to contribute 5% of the employee’s minimum wage.
- Employee Contribution:
- The employee must contribute 1% of their minimum wage.
Example:
If the current minimum wage in Pakistan is set at PKR 32,000:
- Employer contribution (5%): PKR 1,600 per month per employee.
- Employee contribution (1%): PKR 320 per month deducted from the employee’s salary.
So, for each employee, the total monthly contribution towards EOBI would be PKR 1,920.
Other Fees:
- Penalties for Late Contributions: Employers who fail to deposit contributions on time may face penalties or interest charges.
- Registration Fees: While EOBI registration itself is generally free, companies may incur additional costs depending on the professional services they hire to manage the process.
Benefits of EOBI Registration
Employers and employees alike can profit greatly from EOBI registration, which guarantees long-term financial stability and adherence to labor regulations. The main advantages of EOBI registration are as follows:
1. Retirement Pension
- Financial Stability: EOBI provides a monthly pension to employees after retirement, offering financial support in their post-working years.
- Lifelong Income: Employees receive a consistent income stream, helping them manage living expenses when they are no longer working.
2. Survivor’s Pension
- Family Support: If an employee passes away, their dependents (spouse, children) are entitled to a survivors’ pension, ensuring family financial stability after the loss of the primary breadwinner.
- Continuing Benefits: The pension continues to support the family even after the employee’s death, reducing the financial burden on dependents.
3. Invalidity Pension
- Disability Protection: Employees who are unable to work due to a long-term disability are entitled to an invalidity pension.
- Financial Security: The invalidity pension provides financial assistance, ensuring that employees with disabilities are not left without income.
4. Old-Age Grant
- Lump Sum Benefit: Employees who reach the age of 60 (55 for female employees) but do not meet the pension qualification requirements are still eligible for an old-age grant, which is a one-time lump sum payment.
- Support for Ineligible Workers: Even if they don’t qualify for a pension, employees can still benefit from their contributions through this grant.
5. Employee Satisfaction and Retention
- Attracts Talent: Offering EOBI benefits can attract more qualified and motivated employees to your business.
- Reduces Turnover: Employees who know that their future is secured are more likely to stay loyal to the company, improving retention rates.
FREQUENTLY ASKED QUESTIONS
Trust Ways Tax for Professional Guidance
Businesses and employees must go through the difficult but necessary process of EOBI registration. This process involves several forms, papers, and continuous contributions.
This procedure may result in penalties, hold-ups, and lost benefits for staff members if it is not managed properly. For this reason, it’s imperative to have professional assistance to guarantee that everything is done correctly and per the law.
Our area of expertise at Ways Tax is assisting companies with the complexities of EOBI registration. We’re here to make the process simple and hassle-free.
Whether you need assistance establishing your business, processing employee registrations, or handling monthly contributions. Don’t take a chance on your employees losing out on important perks; contact us right now to ensure a quick and easy registration process.