HR Audit Checklist for Pakistani Companies [2026 Template]

An HR audit is a structured review of your people operations against legal requirements, company policies, and best practices. In Pakistan, where labour law compliance sits across federal (EOBI, FBR) and provincial (PESSI, SESSI, Employment Ordinances) frameworks, an annual audit is not optional — it's the only reliable way to find compliance gaps before a Labour Department inspection does.

This checklist is designed for Pakistani HR teams. Work through it annually, or use sections of it when a compliance question arises.

How to Use This Checklist

Rate each item: ✅ Compliant, ⚠️ Partial, or ❌ Gap Found

For every ❌, note: what's wrong, who owns the fix, and the target completion date.

Section 1 — Employment Documentation

The foundation of any HR audit: can you produce complete, accurate documentation for every employee?

Employment contracts and letters:

• Every active employee has a signed appointment letter on file
• Appointment letters specify: designation, department, reporting line, gross salary, probation period, notice period, and benefits
• All contracts reference the company's standing orders (or equivalent policy document)
• Employees who have received promotions or salary changes have updated letters or increment letters on file
• Termination/resignation letters are on file for departed employees (last 3 years)

Employee records:

• CNIC copy on file for every employee
• Educational certificates on file (or document confirming original verified)
• Emergency contact information current (reviewed within last 12 months)
• Bank account details correct (cross-check against last 3 salary disbursements)
• Current address recorded and recently confirmed

Joining documentation:

• Joining reports on file for all employees (signed by employee + HR)
• Pre-employment reference check records (or documented exception if not conducted)

Section 2 — EOBI Compliance

EOBI is the most audited statutory requirement in Pakistan. These questions mirror what an EOBI inspector will ask.

Registration:

• Company is registered with EOBI (have your employer code)
• EOBI employer code is current and active (verify at eobi.gov.pk or your regional office)

Employee enrollment:

• All employees with 6+ months continuous service are enrolled
• EOBI insurance numbers are recorded in each employee's HR file
• Enrollment forms (E-1) are filed and confirmed for all enrolled employees
• New employees are tracked for 6-month enrollment trigger date

Contributions:

• Employer contribution calculated at 5% of statutory minimum wage (PKR 37,000 for Punjab in 2026)
• Employee contribution calculated at 1% of statutory minimum wage (PKR 370/month)
• Contributions remitted by 15th of each following month — no late payments
• EOBI payment receipts/challans on file for the last 12 months
• Contribution calculation is based on statutory minimum wage, not actual salary

Red flags to investigate:

• Any month with missing payment record in the last 12 months
• Any enrolled employee whose contribution record shows a different amount than PKR 2,220/month
• Employees who passed 6 months employment but have no EOBI insurance number

Section 3 — PESSI / SESSI Compliance

Punjab (PESSI):

• Company registered with PESSI if Punjab establishment with 10+ employees
• All eligible employees enrolled with PESSI within 7 days of joining
• PESSI insurance numbers recorded in HR files
• Monthly contributions remitted by 15th of following month
• Contribution calculated at 6% of wages (capped at PKR 30,000 insurable ceiling)
• Challans on file for last 12 months

Sindh (SESSI):

• Company registered with SESSI if Sindh establishment with 5+ employees
• All eligible employees enrolled
• SESSI insurance numbers recorded
• Monthly contributions remitted on time
• Correct employer code being used (separate from PESSI if multi-province)

Multi-province operations:

• Employees in Punjab enrolled with PESSI under Punjab employer code
• Employees in Sindh enrolled with SESSI under Sindh employer code
• No cross-province enrollment confusion

Section 4 — Payroll Compliance

Income tax:

• Tax deduction calculated per current FBR income tax slabs
• FBR tax tables updated for current financial year (effective July each year)
• Taxable and exempt allowances correctly classified:
  • Medical allowance: exempt up to PKR 10,000/month
  • Conveyance allowance: exempt up to PKR 2,500/month
  • Leave encashment paid during employment: taxable
• Annual tax certificates (Form 16 equivalent) issued to all employees by July 31
• Monthly tax remittance to FBR on time (by 15th of following month)

Salary structure accuracy:

• Gross salary matches the latest appointment/increment letter for every employee
• Allowance breakdowns are consistent (basic + HRA + medical + conveyance — not arbitrary splits)
• No "ghost employee" — headcount in payroll register matches actual employee count
• Employees who resigned or were terminated are removed from the next payroll run (no payments after last working day)

Payroll records:

• Salary register for last 12 months on file
• Bank disbursement records match salary register amounts
• All employees have signed or acknowledged salary slips for the last 3 months

Gratuity:

• Monthly gratuity provision calculated at 1/12th of basic salary per employee
• Gratuity liability recorded as a provision in accounts (not just paid on exit)
• Gratuity payment records on file for all departed employees (last 3 years)

Section 5 — Attendance and Leave

Attendance system:

• Biometric/attendance records match payroll deductions
• Late-coming deductions calculated per stated policy
• Absent days without approved leave deducted correctly
• Overtime hours documented and paid (or compensatory off granted) per company policy

Leave policy:

• Annual leave policy documented and communicated (14 days minimum per West Pakistan Employment Ordinance)
• Sick leave policy documented (10 days minimum per Ordinance)
• Casual leave policy documented (10 days per Ordinance, not accrued — use it or lose it)
• Maternity leave policy documented (12 weeks for female employees)
• Leave balances in the system match manual records (run a spot check on 5 employees)

Leave records:

• Leave applications on file for last 12 months (physical or digital)
• Approved leave reflected in attendance and payroll records
• Leave encashment payments documented and tax treatment correct

Section 6 — HR Policies

Required policies (ensure they exist, are current, and employees have acknowledged them):

• Code of conduct
• Disciplinary procedure
• Grievance redressal procedure (mandatory under Standing Orders)
• Anti-harassment policy (mandatory under Protection Against Harassment of Women at Workplace Act 2010)
• Data protection / confidentiality policy
• IT / acceptable use policy
• Leave policy (annual, sick, casual, maternity/paternity)
• Expense and reimbursement policy

Anti-harassment compliance:

• Harassment committee constituted per the 2010 Act (required for companies with 2+ employees)
• Committee composition correct: 3 members, majority women, headed by a senior woman
• Harassment policy displayed in the workplace (required by law)
• Employees trained on policy (at least once at onboarding)
• Complaint mechanism known to all employees

Section 7 — Terminations and Exits

Termination is the highest-risk area for labour disputes. Incomplete documentation here creates serious legal exposure.

• All terminations documented with reason and date (voluntary or involuntary)
• Termination letters on file for involuntary separations
• Notice period observed (or salary in lieu paid and documented)
• Final settlement calculated and paid within 30 days of last working day (per Employment Ordinance)
• Final settlement includes: gratuity, leave encashment (if applicable), outstanding expenses
• Final settlement signed and acknowledged by the employee
• Experience certificates issued to departed employees
• EOBI, PESSI/SESSI: employee status updated at departure (enrollment deactivated after last contribution month)
• Provident fund withdrawal processed (if applicable)

Section 8 — Workforce Data Accuracy

A quick data quality check that takes 30–60 minutes:

• Headcount in HRIS matches payroll register and physical headcount
• All active employees have a valid salary record (no zero-salary active records)
• All designations are current (employees who were promoted show current title)
• Reporting structure is current (no employees reporting to former managers who have left)
• Contact information is current (run a spot check: call 5 employees' emergency contacts)
• No duplicate employee records

Audit Scoring

After completing the checklist, score your audit:

High risk means you have exposure that should be remediated before any Labour Department inspection or FBR audit.

Building the Remediation Plan

For each ❌ or ⚠️ item, document:

1. What's wrong (specific, factual description)
2. Owner (named person responsible for fixing it)
3. Fix required (specific action, not vague "improve records")
4. Target date (within 30, 60, or 90 days based on severity)
5. Evidence of completion (what document or system record confirms it's fixed)

Track this in a simple spreadsheet. Review monthly until all gaps are closed.

How Often to Run an HR Audit

Frequently Asked Questions

Q: Is a Labour Department inspection different from an EOBI audit? A: Yes. A Labour Department inspection covers Standing Orders compliance, employment contracts, leave records, and workplace conditions. An EOBI inspection focuses specifically on contribution calculations and enrollment. An FBR audit focuses on income tax withholding. They're separate inspections with separate authorities — though findings from one can trigger the others.

Q: What triggers a Labour Department inspection in Pakistan? A: Inspections can be routine (scheduled by province) or complaint-triggered. A single employee complaint to the Labour Department can trigger an inspection. Companies known to have recently downsized or with ongoing employment disputes are higher on inspection priorities.

Q: Can we conduct an HR audit ourselves or do we need a consultant? A: This checklist is designed to be self-administered. Most gaps are findable by an experienced HR professional working through the items systematically. Where you find ❌ items involving back-assessed contributions or potential FBR exposure, bringing in a labour law consultant or CA to quantify the liability and advise on voluntary disclosure is worth the cost.

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