In Pakistan after 2000 remittances inflows increased speedily. Migration normally cuts the bulk of the labor participation in the home country although remittances rise the capital stock at the home country. Thus, there is a possibility to change intentionally the plentiful labor power into capital stock and enhance the suboptimal capital-labor share for many labor exporting countries. Constructed on this argument, we can foresee that remittance may meaningfully progress the local labor efficiency or productivity. In case of Pakistan there is a little work carry out to determine the influence of remittances on internal labor output or productivity in the presence of abundant labor force. This paper has examined the impact of remittances and financial development on labor productivity in Pakistan over the period 1973–2018, using Autoregressive Distributed Lag (ARDL) approach. We are using the Long Run Form and Bound Test to find out the co-integration relationship in the model and focusing on the F-statistic value which shows long run relationship between labor productivity and financial development and there is also exist long run relationship between labor productivity and remittances. We found that there is positive and statistically significant relationship between labor productivity and remittances in the long run. On the other hand financial sector development also have positive affect on the labor productivity in the long run in case of Pakistan. But financial development is negative and statistically significant in the short run while remittance have positive and statistically significant impact on labor productivity. The results also indicates that the threshold level of remittances and financial development for labor productivity are 7.9 and 15.2 respectively. Both of independent variables (Remittances and Financial development) have non-linear relationship with dependent variable (labor productivity) in case of Pakistan. Supervisor:- Dr. Nasir Iqbal