How income tax works in Pakistan
Pakistan taxes residents on worldwide income across July-to-June years. Presence of 183 days, 120 days plus three-year history, or posted government service each trigger residence.
Salaried bands run 0% to PKR 600,000, 1% of excess to PKR 1.2 million, 11% to PKR 2.2 million, 23% to PKR 3.2 million, 30% to PKR 4.1 million and 35% above. A 9% surcharge applies past PKR 10 million.
Non-salaried individuals and associations face 0% to 45% on steeper ladders. Employers withhold monthly with September 30 filing.
Income tax brackets in Pakistan
| Bracket | Rate | Notes |
|---|---|---|
| Up to PKR 600,000 | 0% | Tax-free band, salaried |
| PKR 600,001 to PKR 1,200,000 | 1% | On excess over PKR 600,000 |
| PKR 1,200,001 to PKR 2,200,000 | PKR 6,000 + 11% | Base plus marginal |
| PKR 2,200,001 to PKR 3,200,000 | PKR 116,000 + 23% | Base plus marginal |
| PKR 3,200,001 to PKR 4,100,000 | PKR 346,000 + 30% | Base plus marginal |
| PKR 4,100,001 and above | PKR 616,000 + 35% | Top rate before 9% surcharge |
Tax rates at a glance
- Zero band
- PKR 600,000Salaried
- Second slice
- 1%
- Middle rates
- 11% / 23%
- Upper rate
- 30%
- Top rate
- 35%
- Surcharge line
- PKR 10M
Who benefits most
These profiles tend to benefit most when the rules match their real residence, payroll and business setup.
EmployeesExpatsContractorsHigh earnersCross-border workers
Watch out for
- Salaried status needs salary above 75% of income. Mixed earners fall into the steeper 45%-top business ladders.
- The surcharge is 9% of tax, not income, past PKR 10 million. Non-salaried surcharge runs 10% on the same line.
- Foreign-salary relief needs foreign tax paid. Short-term foreigner and returning-citizen exemptions have strict year limits.
- Filer status changes every withholding. Non-filers pay doubled rates across salary, dividends, banking and property.
Frequently asked questions
Do expats pay income tax in Pakistan?
Yes, if resident or earning Pakistani income. Residents pay on worldwide income with foreign-tax and short-stay reliefs.
What is the top income tax rate in Pakistan?
35% past PKR 4.1 million for salaried plus 9% surcharge past PKR 10 million; 45% top for non-salaried business income.
How much is tax-free in Pakistan?
PKR 600,000 of salaried income, with the next slice at just 1% to PKR 1.2 million.
Is business income taxed differently from salary?
Yes. Non-salaried ladders run 15% to 45% against 1% to 35% salaried, with different surcharges.