Pakistan

Individual - Taxes on personal income

Last reviewed - 25 July 2020

Pakistan levies tax on its residents on their worldwide income. A non-resident individual is taxed only on Pakistan-source income, including income received or deemed to be received in Pakistan or deemed to accrue or arise in Pakistan.

Personal income tax rates

The following tax rates apply where income of the individual from salary exceeds 75% of taxable income:

Taxable income (PKR*)

Tax on column 1 (PKR)

Percentage on excess (%)

Over

Not Over

 

 

0

600,000.

 

0%

600,000

1,200,000.

 

5%

1,200,000

1,800,000.

30,000

10%

1,800,000

2,500,000.

90,000

15%

2,500,000

3,500,000.

195,000

17.5%

3,500,000

5,000,000.

370,000

20%

5,000,000

8,000,000.

670,000

22.5%

8,000,000

12,000,000.

1,345,000

25%

12,000,000

30,000,000.

2,345,000

27.5%

30,000,000

50,000,000.

7,295,000

30%

50,000,000

75,000,000.

13,295,000

32.5%

75,000,000

 

21,420,000

35%

The following tax rates are applicable in other cases (for Individuals & Association of Persons):

Taxable income (PKR*)

Tax on column 1 (PKR)

Percentage on excess (%)

Over

Not Over

 

 

0

400,000

 

0%

400,000

600,000

 

5%

600,000

1,200,000

10,000

10%

1,200,000

2,400,000

70,000

15%

2,400,000

3,000,000

250,000

20%

3,000,000

4,000,000

370,000

25%

4,000,000

6,000,000

620,000

30%

6,000,000

 

1,220,000

35%

Withholding requirements

In general payments made on account dividend, interest, royalties and fee for technical services income derived from Pakistan sources are subject to a 15% withholding tax (WHT), which tax has to be withheld /deducted from the gross amount paid to the recipient. Majority of these payments do not attract enhancement of 100% even if the recipients are not appearing on the ATL.


From July 1st, 2020, a withholding tax rate of 10% is applicable on payment of profit on debt to non-resident individuals on debt instruments issued by the Federal Government under the Public Debt Act, 1944. Such debt instruments must be purchased from bank account maintained abroad, a Non-Resident Rupee Account Repatriable (NRAR) or a foreign currency account maintained with a banking company in Pakistan. The tax so deducted is final tax, with no requirement for non-resident individuals to file his return of income in Pakistan.

Local taxes on income

The only significant tax on salaries is federal income tax.