Work and Wages
Minimum Wage
Minimum wage is the wage level (set by the government, either after consultation with the social partners, i.e., worker organisations and employer associations, or unilaterally) below which it is illegal for the employer to pay his/her employees.
The minimum wage in Pakistan is set by the following laws:
- The Minimum Wages Ordinance, 1961 (applicable in ICT)
- Pakistan Minimum Wages for Unskilled Workers Ordinance, 1969 (no longer in use after the 18th Amendment)
- The Punjab Minimum Wages Act, 2019
- The Khyber Pakhtunkhwa Minimum Wages Act, 2013
- Sindh Minimum Wages Act, 2015
- Balochistan Minimum Wages Act 2021.
Wages, as defined under the Minimum Wages Ordinance 1961 (and its provincial variants), mean all remuneration, expressible in monetary terms, and payable to a person on fulfillment of the express or implied terms of employment contract but does not include contributions paid by the employer on behalf of the worker under any scheme of social insurance, pension fund or provident fund; travelling allowance or value of any travelling concession; amount paid to defray special expenses incurred by the worker in respect of his employment; any sum paid as annual bonus; or any gratuity paid on contract termination. Minimum Wages Ordinance, 1961 applies to all industrial establishments’ employees (whether skilled, unskilled or apprentices and even domestic workers) but it excludes the employees of Federal or Provincial governments, coalmine employees or persons employed in agriculture.
Minimum wages for semi-skilled, skilled and highly skilled workers are determined by the Minimum Wage Boards constituted under the Minimum Wages Ordinance, 1961. The detailed Minimum Wage notifications for different industries based in the provinces are issued later by the provincial labour departments. One such detailed notification used to be issued by the Punjab Labour & Human Resource Department before minimum wage revisions in 2025. The said notification used to provide minimum wage rates for ministerial, highly skilled, semi-skilled and skilled workers in the 102 industries based in the province.
Minimum wages for unskilled workers used to be fixed under the Minimum Wages for Unskilled Workers Ordinance 1969; however, after the devolution of the Ministry of Labour to provinces, the wages are announced under section 6 of the Minimum Wages Ordinance, 1961 (and the relevant sections under provincial variants), which applies to all industrial establishments’ employees (whether skilled, unskilled or apprentices and even domestic workers), but it excludes the employees of federal or provincial governments, coalmine employees or persons employed in agriculture. The minimum wage rates for coal mine workers are determined under the Coal Mines (Fixation of Rates of Wages) Ordinance 1960 (in consultation with Mines Welfare Boards).
For newspaper employees, wages are determined under the Wage Board Award, and wages are fixed by the Wage Board (constituted specifically for that purpose) while taking into consideration the cost of living, the prevalent wage rates in comparable employment, circumstances relevant to the newspaper industry in different regions of the country, as well as any other reasons that the Boards considers appropriate and relevant. The 7th Wage Board Award, announced in 2001, could not be implemented. The interim 8th Wage Board was announced in 2019. The Wage Board, having equal representation of newspaper workers and employers, is constituted under the Newspaper Employees (Conditions of Service) Act 1973. At the start of 2026, journalist unions were seeking court direction from the Islamabad High Court for timely constitution of the 9th Wage Board for newspaper employees.
There is yet another law that provides for minimum wage fixation for coal mine workers, i.e., the Coal Mines (Fixation of Rates of Wages) Ordinance 1960. Provincial governments issue minimum wage notifications for these coal miners, and they may also consult the Mines Welfare Board in wage fixation (but it is not necessary).
Minimum wages are determined at the provincial level. Section 4 of the Minimum Wage Ordinance, 1961, (and its provincial variants) allows minimum wage boards for each province to recommend minimum wage rates for adult unskilled workers and juvenile workers employed in industrial undertakings. Section 5 of the MW Ordinance gives the power to each province's MW Board to fix the MW rate even for workers in industries where there is no effective regulation of wages. The list of industries covered also varies from province to province. The government can fix the wage rate for skilled workers because Section 2(9) defines 'worker' as 'skilled or unskilled, intellectual, technical, clerical, manual, or other work, including domestic work for hire or reward'. So, it has the authorisation to do that.
According to section 5(3) of the Minimum Wages Ordinance, 1961, the Minimum Wages Board can fix minimum wages for time work, piece work, overtime work and work on weekly rest days and paid holidays. The time rates recommended by the Board may be on an hourly, daily, weekly or monthly basis.
Nothing relating to number of hours is mentioned in the MW Ordinance, 1961. However, as per the Factories Act, 1934 (Sections 34 and 36), no adult worker shall be allowed or required to work in a factory for more than 48 hours a week or 9 hours a day. The minimum wage is set for 26 working days.
Section 3 of the MW Ordinance, 1961, requires the provincial governments to establish a minimum wages board that will recommend minimum wage rates. The Minimum Wages Board comprises a chairman, an independent member and one member as the employer's representative and one as the workers' representative. All the members are appointed by the provincial government. Provincial governments also have to appoint one member as a representative of employers and workers each at the industry level for all the industries for which minimum wages have to be notified.
As per section 7 of the MW Ordinance, 1961, the MW Board can review its minimum wage recommendations if there are any changes in economic conditions or the cost of living and further recommend them to the provincial government. However, it is a political decision, and in the recent past, provinces have tried to increase minimum wages just to outdo the other provinces or the federal government.
In accordance with section 2(g) of the Minimum Wages for Unskilled Workers Ordinance, 1969, wages have both the fixed and variable components. These include dearness allowance, house rent, conveyance allowance, cost of living allowance and special allowance. All of these are variable components. Above these variable allowances, MW includes also the fixed allowances.
As per section 7 of the Minimum Wages Ordinance, 1961, no recommendation regarding the review of minimum wages will be considered before 1 year and after 3 years. Only under very special circumstances can a revision before a year be considered. However, it is important to note that this is only for a recommendation that the Board sends on its own to the government. The government can send the reference to the Board anytime for revision of wages.
According to section 7 of the Minimum Wages Ordinance, 1961 minimum wage rates are reviewed if there is any change in the economic conditions or cost of living or other relevant factors. The cost of living here can be interpreted as consumer prices because whenever there was a change in the level of consumer prices, minimum wage rates were revised (raised). Economic conditions can be interpreted as decent living standards.
The national poverty line in Pakistan is PKR 8,484 per adult equivalent (as of FY25). The poverty line was updated in 2026.
As per sections 21 and 22 of the West Pakistan Minimum Wage Rules, 1962, the government may appoint labour inspectors to regulate and inspect the compliance of minimum wages by making as many visits to industries. Governmental Body/Authority - As per section 9-A of MW Ordinance, 1961, the provincial government may appoint any person as the Authority for the area to hear and decide on all the claims (complaints) regarding non-payments or delay in the payment of wages. Provincial industrial relations laws require every industry to have a collective bargaining agent who deals with matters relating to employment, work conditions or enforcement of any right. According to section 9(3) of the Minimum Wages Ordinance, 1961, the following penalties are specified – either up to 6 months’ imprisonment or a fine or even both along with the payment of arrears made to the employee. According to the National & Provincial Industrial Relations Acts, a Collective Bargaining Agent (registered trade unions) is responsible for dealing with matters relating to workers’ rights guaranteed by law.
As per section 9-A(2) of the MW ordinance 1961, if no action has been taken by the employer (in case of delay of payment) within 6 months of the complaint, the worker can appeal to the authority appointed by the provincial government. As per section 23 of the West Pakistan Minimum Wage Rules 1962, a worker can send his complaint regarding noncompliance of minimum wages to the government through inspectors or any authorised official. As provided under the National and Provincial Industrial Relations Acts, a worker can bring his complaint relating to any right guaranteed to him by law to the collective bargaining agent. A collective bargaining agent is a registered trade union and is an elected representative of the workers in an enterprise. Similar provisions are found in the Khyber Pakhtunkhwa 2013 Act, the Punjab Minimum Wages Act 2019, the Sindh Minimum Wage Act 2015, and the Balochistan Minimum Wages Act 2021.
Sources: §4-6 of the Minimum Wages Ordinance, 1961; §4-6 of the Khyber Pakhtunkhwa Minimum Wages Act, 2013; §10-12 of the Newspaper Employees (Condition of Service) Act, 1973; §3-5 of the Coal Mines (Fixation of Rates of Wages) Ordinance, 1960
Regular Pay
Wages can be paid on a daily, weekly, fortnightly or monthly basis. However, a wage period can't exceed one month. The detailed instructions on payment of wages are found in the Payment of Wages Act, 1936, the Khyber Pakhtunkhwa Payment of Wages Act, 2013, the Sindh Payment of Wages Act 2015, and the Balochistan Payment of Wages Act 2021. A factory, railway or industrial or commercial establishment employing less than 1,000 workers is liable to disburse pay to its employees before the expiry of the seventh day from the last day of the wage period. However, the establishment employing more than 1000 workers can delay the disbursement of pay up till the 10th day from the last day of the wage period. The law also requires that wages be paid on a working day and in current coin or currency notes only. This also means that wage payments by organisations through cheque are not permitted under the law. In order to ensure that workers are paid their wages as specified under the law or employment contract or memorandum of settlement (referred to generally as a 'collective bargaining agreement'), a necessary amendment in the Payment of Wages Acts is needed. It must, however, be specified that the laws in Balochistan, the Khyber Pakhtunkhwa and Sindh require payment of wages in current currency through scheduled banks. The employer is required to display, in a conspicuous place at or near the main entrance of the factory, a notice, in English and in the language of the majority of the persons employed therein, showing for at least two months in advance the day on which wages are to be paid.
Sources: §3-6 of the Payment of Wages Act 1936; §3-6 of the Payment of Wages Act 1936, adapted by Punjab in 2014; §3-6 of the Khyber Pakhtunkhwa Payment of Wages Act, 2013; Rule 8 of the Payment of Wages Rules 1960; Sindh Payment of Wages Act 2015; Balochistan Payment of Wages Act 2021
Deductions & Fines
According to the Payment of Wages Act, the following deductions can be made from a worker's wages.
- Fines;
- Deductions for absence from duty; Law considers it a breach of contract when ten or more persons, through concerted action, absent themselves from office without due notice and reasonable cause. The law entitles the employer to make deductions up to eight days of wages when employees take such an action. However, the law exempts women and workers (under the age of 15 years) from such wage deduction for contract breaches.
- Deductions for damages to or loss of goods expressly entrusted to the employed person for custody, or for loss of money for which he is required to account, where such damage or loss is directly attributable to his neglect or default;
- Deductions for house accommodation supplied by the employer
- Deductions for such amenities and services supplied by the employer as the Provincial Government may by general or special order authorize;
- Deductions for recovery of advances or for adjustment of overpayment of wages;
- Deductions of income tax payable by the employed person;
- Deductions required to be made by order of a Court or other authority competent to make such order;
- Deductions for subscriptions to, and for repayment of advances from, any approved Provident Fund;
- Deductions for payment to co-operative societies approved by the Provincial Government or to a scheme of insurance maintained by the Pakistan Post Office;
- Deductions made with the written authorization of the employed person, in furtherance of any war saving scheme approved by the Provincial Government.
Under the minimum wage notification issued by the Government of Punjab, the deductions for providing food (Rs. 100 per meal), housing accommodation (Rs. 2000 per month) and transport facilities (Rs. 1800 per month) are allowed subject to the agreement between the worker and the employer. However, in other provinces, especially in Khyber Pakhtunkhwa, no variable or incentive allowance (non-statutory) or value of welfare facilities, including house rent allowance or free house and conveyance, can be adjusted against the minimum wage rates.
Fines can be imposed on employees in respect of certain acts and omissions, but these are to be specified and previously approved by the government. A notice of such acts has to be exhibited in the premises at some conspicuous place (like near the factory entrance). Fines can be imposed for only those acts contained in the notice, and a contravention of this provision is deemed to be an unauthorised deduction, which is a liable offence. The total amount of fine in a single wage period (which can be a maximum of 30 days) can’t exceed 3% of the wages payable to the worker. The fine imposed has to be recovered in lump sum and has to be recovered within sixty days of the commission of an act or omission. Fines cannot be imposed on workers under the age of 15 years.
Sources: §7-13 of the Payment of Wages Act 1936; §3-6 of the Payment of Wages Act 1936, adapted by Punjab in 2014; §7-13 of the Khyber Pakhtunkhwa Payment of Wages Act, 2013; Rule 10-16 of the Payment of Wages Rules 1962; Minimum Wage Notifications 2015
