Income Tax rates for Individuals
Pakistan applies income tax on residents based on their worldwide income. A non-resident is only taxed on Pakistan Source Income. This includes income received or considered to be earned or arising in Pakistan. Salary is treated as Pakistan Source Income if it relates to employment exercised in Pakistan, even if
Income tax rates for Saleried Person
Income tax rates Varries with the saleries of individuals. If Salary exceeds 75% of your Taxable Income, the following income tax rates apply:
| Taxable Income (PKR) | Fixed Tax (PKR) | Tax on Excess (%) |
|---|---|---|
| 0 – 600,000 | 0 | 0% |
| 600,001 – 1,200,000 | 0 | 5% |
| 1,200,001 – 2,200,000 | 30,000 | 15% |
| 2,200,001 – 3,200,000 | 180,000 | 25% |
| 3,200,001 – 4,100,000 | 430,000 | 30% |
| 4,100,001 and above | 700,000 | 35% |
Income Tax Rates (Individuals and AOPs)
If Salary does not exceed 75% of Taxable Income, the following rates apply to individuals and an Association of Persons (AOP):
| Taxable Income (PKR) | Fixed Tax (PKR) | Tax on Excess (%) |
| 0 – 600,000 | 0 | 0% |
| 600,001 – 1,200,000 | 0 | 15% |
| 1,200,001 – 1,600,000 | 90,000 | 20% |
| 1,600,001 – 3,200,000 | 170,000 | 30% |
| 3,200,001 – 5,600,000 | 650,000 | 40% |
| 5,600,001 and above | 1,610,000 | 45% |
Resident and Non-Resident
You are a Resident for tax purposes if:
- You stay in Pakistan for 183 days or more in a Tax Year, or
- You stay 120 days this year and 365 days in the past four Tax Years.
Otherwise, you are a Non-Resident. Different tax rules may apply.
Pakistan Source Income
Examples of Pakistan Source Income include:
- Salary from employment in Pakistan
- Rent from property in Pakistan
- Dividends from a Pakistan-based Company
- Pension paid in Pakistan
Foreign Source Income
Any income earned outside of Pakistan, such as foreign employment or investments abroad, is treated as Foreign Source Income.
Taxpayer Categories
A Taxpayer can be:
- An individual
- A Company
- An Association of Persons (AOP)
- The government
A Company includes entities registered under law or foreign law, trusts, and certain non-profit organizations.
Tax Year
The Tax Year in Pakistan runs from 1 July to 30 June. For example:
- 1 July 2024 to 30 June 2025 = Tax Year 2025
Some businesses may use a different year, known as a Special Tax Year.