Pakistan
Asia
Pakistan has a progressive income tax system with rates from 0% to 35% for individuals. The tax year runs from July 1 to June 30. Pakistan also imposes Sales Tax at 18% on most goods and services. The Federal Board of Revenue (FBR) administers direct and indirect taxation. Tax compliance has been improving with digitalization and automation of tax processes.
How Taxation Works in Pakistan
Understand the basics of Pakistan's tax system, who pays tax, and how rates apply to individuals and businesses.
Tax System
Pakistan uses a self-assessment tax system where taxpayers calculate and report their own tax obligations. The FBR administers tax collection and enforcement. Tax returns are filed annually, and taxpayers must pay their tax liability by the deadline. Withholding tax is a key mechanism for collecting tax at source.
Residents
Tax residents are taxed on worldwide income. Non-residents are taxed only on Pakistan-sourced income. Employers withhold tax from employee salaries. Self-employed individuals pay advance tax quarterly.
Non-Residents
Tax residents are individuals who reside in Pakistan for 183 days or more in a tax year, or are Pakistani citizens. Residents are taxed on worldwide income. Non-residents are taxed only on Pakistan-sourced income.
Individuals
Pakistan has a progressive income tax system with rates from 0% to 35% for salaried individuals. The tax-free limit is PKR 600,000. Various deductions and exemptions are available under the Income Tax Ordinance 2001.
Businesses
Corporate tax is 29% for most companies. Banking companies are taxed at 35%. SMEs with paid-up capital below certain thresholds benefit from a reduced rate of 22%. Sales tax is 18% on most goods and services.
Tax Year
Pakistan's tax year runs from July 1 to June 30. Returns are filed for the tax year ending June 30.
Filer vs Non-Filer
FBR distinguishes between filers and non-filers. Filers benefit from lower withholding tax rates and higher tax-free limits.
Withholding Tax
Withholding tax (WHT) is deducted at source on various payments including salary, professional fees, interest, rent, and dividends.
Provincial Taxes
Pakistan has provincial taxes including property tax, vehicle token tax, and entertainment tax, which vary by province.
Current Tax Information
July 1 – June 30 tax slabs, rates, thresholds, and key deductions for Pakistan.
| Rate | Threshold | Notes |
|---|---|---|
| 0% | Up to PKR 600,000 | Salaried individuals — tax-free limit |
| 5% | PKR 600,001 – PKR 1,200,000 | Salaried individuals |
| 10% | PKR 1,200,001 – PKR 2,400,000 | Salaried individuals |
| 15% | PKR 2,400,001 – PKR 3,600,000 | Salaried individuals |
| 20% | PKR 3,600,001 – PKR 6,000,000 | Salaried individuals |
| 25% | PKR 6,000,001 – PKR 12,000,000 | Salaried individuals |
| 30% | PKR 12,000,001 – PKR 30,000,000 | Salaried individuals |
| 35% | Above PKR 30,000,000 | Salaried individuals |
Standard Deduction
PKR 600,000 tax-free limit for salaried individuals. Additional deductions for Zakat, charitable donations, medical expenses, education expenses, loan interest, and provident fund contributions.
Major Deductions
- Zakat
Deduction for Zakat paid at the rate of 2.5% on eligible wealth.
- Charitable Donations
Deduction for donations to approved charitable institutions.
- Medical Expenses
Deduction for medical expenses of self, spouse, and dependent parents.
- Education Expenses
Deduction for education expenses of self and dependents.
- Loan Interest
Deduction for interest on business loans and home loans.
- Provident Fund
Deduction for contributions to recognized provident funds.
Tax Credits
- Zakat Credit
Credit for Zakat paid at 2.5% on eligible wealth.
- Withholding Tax Credit
Credit for withholding tax deducted at source on salary and other income.
Important Dates
Key deadlines for Pakistan tax filing, payments, and important milestones.
Tax Year Start
Pakistani tax year runs from July 1 to June 30.
Tax Year End
End of the Pakistani tax year.
Individual Tax Filing Deadline
Deadline for individuals to file income tax returns.
Advance Tax Installment 1
First installment of advance tax due.
Advance Tax Installment 2
Second installment of advance tax due.
Advance Tax Installment 3
Third installment of advance tax due.
Advance Tax Installment 4
Final installment of advance tax due.
Government Resources
For the most accurate and up-to-date information, visit the official government tax authority. Below are the most useful official portals, forms, and support resources for Pakistan taxpayers.
Federal Board of Revenue (FBR)
Official Pakistani tax authority — tax filing, payment, and guidance.
https://www.fbr.gov.pk
IRIS Portal
Online platform for sales tax registration and filing.
https://iris.fbr.gov.pk
FBR Tax Slabs
Current income tax rates and slabs for salaried individuals.
https://www.fbr.gov.pk
e-File Portal
Online portal for filing income tax returns.
https://efile.fbr.gov.pk
Popular Pakistan Calculators
Estimate your tax liability with our free Pakistan calculators. All calculations run locally in your browser — no data is collected.
Income Tax Calculator
Estimate your Pakistan income tax calculator with current rates and rules.
Try calculator →Sales TaxSales Tax Calculator
Estimate your Pakistan sales tax calculator with current rates and rules.
Try calculator →Property TaxProperty Tax Calculator
Estimate your Pakistan property tax calculator with current rates and rules.
Try calculator →Vehicle TaxVehicle Tax Calculator
Estimate your Pakistan vehicle tax calculator with current rates and rules.
Try calculator →Income TaxIncome Tax Calculator
Open calculator →Income TaxSalary Tax Calculator
Open calculator →Property TaxCapital Gain Tax Calculator
Open calculator →Frequently Asked Questions
Quick answers to common questions about Pakistan taxation, filing requirements, and using our calculators.
What is the tax-free limit for salary in Pakistan?
The tax-free limit for salaried individuals in Pakistan is PKR 600,000 per year for the 2024/25 tax year.
What are the FBR tax slabs for salaried individuals?
FBR tax slabs range from 0% to 35% on annual taxable income. The exact slab depends on your total income after deductions.
How is monthly salary tax calculated in Pakistan?
Monthly tax is calculated by dividing annual taxable income by 12 and applying the applicable FBR tax slab. Employers deduct tax at source under Section 159.
Are medical and house rent allowances taxable?
Medical allowance and house rent allowance are generally taxable as part of salary income, though certain exemptions may apply.
What is the penalty for non-filing tax in Pakistan?
FBR may impose penalties up to PKR 100,000 or more for non-filing. Non-filers also face higher withholding tax rates on banking, property, and vehicle transactions.
Who qualifies as a Salaried Individual for FBR?
Any person receiving income from employment, pension, or annuity qualifies as a salaried individual for FBR purposes.
Trust & Transparency
Last Updated
2025-06-15
Educational Disclaimer
The tax information and calculators on this page are for educational and informational purposes only. They do not constitute professional tax advice. Tax laws are subject to change. Always consult a qualified tax professional for advice specific to your situation.
Calculation Methodology
Tax calculations follow the Income Tax Ordinance 2001 and FBR regulations. Progressive rates are applied to taxable income after deductions and exemptions. Withholding tax rates vary based on filer status and payment type.
Data Sources
- Federal Board of Revenue (FBR) Pakistan
- Income Tax Ordinance 2001
- FBR Tax Circulars
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All calculations are performed locally in your browser. No personal data is collected, stored, or transmitted to any server. Your financial information never leaves your device.
