Free Employee Payroll Generator

Running payroll in Pakistan: the monthly cycle

Payroll is a repeating sequence, and most errors come from doing the steps out of order. The reliable cycle is: freeze attendance and leave data, apply any changes to pay (increments, new joiners, exits), compute gross pay per employee, compute statutory and other deductions, review the register, pay, then file and record.

Because Pakistan's tax year runs from 1 July to 30 June, the annual tax estimate resets in July. Payroll for July should therefore be recomputed from the new slabs and the new expected annual salary, not simply carried forward from June.

Running payroll in the United States

US payroll separates federal income-tax withholding from FICA. Employees generally contribute Social Security up to the annual wage base and Medicare on wages, with Additional Medicare Tax above the applicable threshold. State and sometimes local withholding sit alongside those federal deductions.

The calculator annualises the monthly wage, applies the selected filing status and standard deduction, estimates federal and selected state income tax, and adds the employee shares of Social Security and Medicare. It is a planning figure rather than a payroll filing engine: actual checks depend on Form W-4, pay frequency, year-to-date wages, benefits, local tax, and state withholding tables.

• Collect Form W-4 and any state withholding certificate before the first payroll.
• Track year-to-date wages so Social Security stops at the annual wage base.
• Separate employee deductions from employer payroll liabilities and unemployment taxes.
• Check state and local registration, payday, wage-statement, leave, and final-pay rules.
• Use a payroll service or professional review when filing Forms 941, W-2, state returns, and deposits.

What has to be deducted and deposited

Deposit deadlines matter more than the amounts. Late deposit of withheld tax attracts default surcharge and penalty, and the withholding statement is the document FBR reconciles against your employees' returns. A mismatch there is one of the most common triggers for correspondence.

• Income tax on salary, withheld monthly from each employee's pay and deposited by the prescribed date, then reported in the periodic withholding statement.
• EOBI contributions on the notified wage basis, with an employee share and a larger employer share, deposited monthly.
• Provincial social security contributions (for example PESSI, SESSI, PSSSI depending on province) where the establishment is covered.
• Provident fund employee and employer contributions, remitted to the fund rather than retained by the company.
• Any court-ordered or contractually agreed recovery, such as a loan instalment.

Salary structuring and its cost consequences

How a package is split between basic salary and allowances changes your costs, not just the presentation. Gratuity, provident fund contributions, EOBI and often leave encashment are computed on basic salary, so a high-basic structure increases employer cost while a very low basic can breach minimum wage rules or look artificial. A basic of roughly 60% of gross, with house rent and smaller conveyance and medical allowances on top, is the common middle ground.

Keep the structure consistent across grades and documented in an offer letter. Ad hoc structures for individual employees create gratuity disputes years later and make your payroll difficult to audit.

Minimum wage, overtime and leave

Minimum wage in Pakistan is notified by each province and revised most years, so a payroll that was compliant last July may not be this July. Check every unskilled and entry-level salary against the current notification for the province where the employee works, not where your head office is.

Overtime for covered workers is generally payable at twice the ordinary rate for hours beyond the statutory working hours. Leave entitlements — annual, casual and sick — also derive from the applicable provincial law and standing orders, and unused annual leave can attract encashment obligations. Track leave balances in payroll rather than separately, so the final settlement of a departing employee can be computed from one record.

Joiners, leavers and final settlement

• For a mid-month joiner, pro-rate on actual days and recompute the annual tax estimate on the salary they will actually receive in this tax year, not on twelve months.
• For a leaver, settle salary to the last working day, encash any leave due under policy, pay gratuity where the entitlement has vested, recover any outstanding loan or notice shortfall, and close the provident fund position.
• Issue a tax deduction certificate on exit so the employee can file, and retain the full settlement calculation.
• Update EOBI and social security records promptly; stale employee lists cause reconciliation problems long after the person has left.

Records, controls and this tool

Keep the monthly payroll register, the payslips, the attendance basis, the deposit challans and the withholding statements together for each month. Retain them for at least six years. Separate the person who prepares payroll from the person who approves the payment, even in a small company — that single control prevents most payroll fraud.

This payroll generator lets you add employees, computes income tax from the current salaried slabs, shows a consolidated summary of your payroll cost, and produces individual payslips you can print or save as PDF. Employee records are held in your own browser only: nothing is uploaded to us, and nothing is visible to anyone else using a different device. The trade-off is that clearing your browser data clears the records, so export or print what you need to keep.

Frequently asked questions