Am I entitled to a payout from the company’s annual profits as an employee?

The answer is yes! You will need to check your company’s registration details and ask about its arrangements in this regard to the administration of the company beforehand.

The Companies Profits (Workers Participation) Act, 1968 came into force on 4th July, 1968 and extends to the whole of Pakistan. This has been amended by Companies Profits (Workers Participation) Ordinance 1972 and 2002. Substantial changes made by this Act include  payment by the employer of 5% of company profits every year to a fund created for workers, including contract workers (including those hired through other contractors).

Under ┬ž 3 of this Act every company to which the scheme is applicable shall establish a ‘workers participation fund’ in accordance with scheme given in schedule and company shall pay 5% of its annual profits to this fund. This scheme applies to all industrial undertakings where number of workers is 50 or more or if its paid-up capital is two million rupees or more or if value of its fixed assets is four million rupees or more.