President of the Karachi Chamber of Commerce & Industry (KCCI), Muhammad Jawed Bilwani, has called on the Sindh government to lower the Social Security Contribution rate under the Sindh Employees’ Social Security Institution (SESSI) by 2 percent. He emphasized that such a reduction would alleviate some of the financial strain on industries facing rising costs due to hikes in the minimum wage.
Bilwani pointed out that while the business community has complied with the Sindh Minimum Wage Board’s recent decision to raise the minimum wage to Rs37,000 from July 1, 2024, the increased wages have also driven up the social security contribution costs for industries. Currently, SESSI’s contribution rate stands at 6 percent, a burden that Bilwani urged the provincial government to reconsider. “We recognize the difficulties faced by the public amid ongoing inflation, and businesses have adjusted to the wage increase. However, the Sindh government must also acknowledge the challenges industries face due to escalating business costs. A 2 percent reduction in the social security contribution would provide much-needed relief,” said Bilwani.
He illustrated the impact by explaining that industrialists currently contribute Rs2,220 per worker each month, a figure that may seem small but accumulates significantly over time. For a business with 1,000 workers, the total monthly contribution to SESSI amounts to Rs2.2 million, or Rs26.64 million annually—a substantial sum that is becoming difficult for many industries to manage, particularly those with a large workforce.
Bilwani further noted that large-scale manufacturing businesses with up to 7,000 workers are facing severe difficulties covering various costs, including salaries, social security contributions, and utility bills, making it increasingly challenging to sustain operations.
