This study examines the role of an authentic leadership style in managing levels of occupational stress of employees working in the IT sectors of Pakistan and the UK. By combining
strata, purposive and convenience sampling techniques, we gathered data from 220 employees working in software houses in both economies by means of a cross-sectional research design. The measurement model confirmed the reliability and validity of the distinctive variables while Partial Least Square Structural Equation Modeling (PLS-SEM) and
correlation were deployed to assess the relationship between the research variables. The findings of the study confirmed that an authentic leadership style is effective in managing
occupational stress, specifically organisational and personal stressors of employees working on time-bound projects. Additionally, authentic leadership is effective in developing
psychological capital. The research framework is effective for improving employees’ work efficiency through stress reduction and the development of psychological capital under an
authentic leadership style.