Withholding Tax Calculator Pakistan 2026-27 — Services, Goods & Contracts WHT Guide
In Pakistan, withholding tax (WHT) does not apply to every business transaction. Under Section 153 it applies when a prescribed person pays for goods, services or a contract — who counts as a prescribed person is defined in Section 153(7) (see the FAQ below). Rent, dividends and bank profit have their own separate sections. But what is the exact rate? How much difference does being a filer make? And how do you get deducted WHT back? This complete guide makes all of it clear, with real examples.
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1. What Is Withholding Tax — A Simple Explanation
WHT is an advance tax that the payer (buyer/employer) deducts before paying and sends to FBR — the recipient does not get the full amount, but the amount minus WHT.
Simple Example:
You are about to pay an IT company a service fee of Rs 1,00,000. The filer rate for IT and IT-enabled services is 4%. You send Rs 4,000 to FBR and the IT company receives Rs 96,000. The IT company can later claim this Rs 4,000 in its annual return.
2. WHT Rates 2026-27 — by Payment Type
Each payment type has its own section and its own rate:
| Payment Type | FBR Section | Filer Rate | Non-Filer Rate |
|---|---|---|---|
| Goods supply — company | 153(1)(a) | 5% | 10% |
| Goods supply — individual/AOP | 153(1)(a) | 5.5% | 11% |
| Services — specified services | 153(1)(b) | 7% | 14% |
| Services — IT & IT-enabled | 153(1)(b) | 4% | 8% |
| Services — independent professionals | 153(1)(b) | 15% | 30% |
| Services — advertising (electronic/print media) | 153(1)(b) | 1.5% | 3% |
| Services — terminal & port operating | 153(1)(b) | 12% | 24% |
| Services — all other services | 153(1)(b) | 14% | 28% |
| Contracts — company | 153(1)(c) | 7.5% | 15% |
| Contracts — any other case | 153(1)(c) | 8% | 16% |
| Contracts — sportspersons | 153(1)(c) | 15% | 30% |
| Rent — corporate tenant/landlord | 155 | 15% | 30% |
| Bank profit — bank/FI account or deposit — full guide | 151 | 20% | 40% |
| Dividends | 150 | 15% (Final) | 30% (Final) |
| IT export of services (freelancers) | 154A | 1% (Final) | 1% (Final) |
| Cash withdrawal — non-filers only | 231AB | Not applicable | 0.8% |
| Amount remitted abroad via card | 236Y | 0.5% | 1% |
14% is the default rate. Under Section 153(1)(b), a service outside the named categories above (specified, IT, professionals, advertising, terminal/port) pays 14% filer / 28% non-filer — not 7%. The contracts rate depends on whether the contractor is a company.
This table shows withholding rates — not your annual tax liability. The rent row is the Section 155 deduction that applies in the corporate case; your actual income tax is worked out at the normal rates, and the amount deducted is credited against it. Likewise, the goods rows are for ordinary supplies — special cases such as toll manufacturing and rice, cotton seed or edible oil have their own rates, which are not in this table. The bank profit 20%/40% is for the Section 151 case where profit is paid on an account or deposit with a banking company or financial institution; the other Section 151 sub-cases have different rates.
For an exact calculation, use the WHT calculator →
3. Real Business Examples — How Much WHT Is Deducted
Example 1 — A Rs 5,00,000 Payment to an IT Service Company
Gross Payment
Rs 5,00,000
WHT (4% Filer)
Rs 20,000
Net to Company
Rs 4,80,000
Section 153(1)(b) — IT and IT-enabled services, at 4%. As a filer Rs 20,000 is deducted; as a non-filer Rs 40,000 (8%) would be deducted. Had the same payment been for another type of service, the rate would be 7%, 14% or 15% — the rate follows the category.
Example 2 — Goods Purchase Rs 10,00,000
Gross Amount
Rs 10,00,000
WHT (5% Filer, Company)
Rs 50,000
Net to Supplier
Rs 9,50,000
Section 153(1)(a) — Goods (company supplier). With a non-filer supplier, Rs 1,00,000 (10%) would be deducted. For an individual/AOP supplier the rate is 5.5% filer / 11% non-filer.
Example 3 — Construction Contract Rs 20,00,000
Contract Value
Rs 20,00,000
WHT (7.5% Filer, Company)
Rs 1,50,000
Net to Contractor
Rs 18,50,000
Section 153(1)(c) — Contracts, where the contractor is a company (7.5%). As a non-filer, Rs 3,00,000 (15%) would be deducted — Rs 1,50,000 extra. In any case other than a company the rate is 8% filer / 16% non-filer, and for sportspersons 15% / 30%.
4. How to Use the WHT Calculator — Step by Step
- Open taxcalcpk.com/wht-calculator — free, no signup
- Select the Payment Type — Goods, Services, Contract, Rent, Bank Profit, Dividend — whichever fits your situation
- Enter the Gross Amount — the total payment to be made or received (the amount before WHT)
- Select the Filer Status — whether the recipient is a filer or non-filer — this changes the rate
- Results: WHT Deducted, Net to Recipient and the effective rate — the section is shown with the payment type in the dropdown, and the calculator says whether the deduction is adjustable or final
5. Filer vs Non-Filer — How Much Difference It Makes to WHT
The most practical benefit of being a filer shows up in WHT. Under Rule 1 of the Tenth Schedule, the non-filer rate is exactly double in most sections. But not in every section — Rule 10 keeps some sections outside this doubling, such as Section 154A (IT exports), where the filer and non-filer rates in the table above are the same:
Filer Benefits
- ✅ Services: 1.5%–15% — by category
- ✅ Goods: 5%–5.5% (half of non-filer)
- ✅ Contracts: 7.5% company / 8% any other case
- ✅ WHT adjustable against annual liability
- ✅ A refund by filing your return if too much was deducted (Section 170)
Non-Filer Penalty
- ❌ Services: 3%–30% — double the filer rate
- ❌ Goods: 10%–11% (double rate)
- ❌ Contracts: 15% company / 16% any other case
- ❌ Lakhs in extra withholding on large projects
- ❌ No credit or refund without filing a return; a late filer gets no refund while off the ATL (Section 182A(1)(c))
How to become a filer — free step-by-step guide →
6. Adjustable WHT vs Final Tax — What Is the Difference
| WHT Type | Adjustable? | Examples |
|---|---|---|
| Adjustable WHT | ✅ Yes — can be claimed in the return | Services, Goods, Contracts (Section 153), Rent (155), Cash withdrawal (231AB), Telephone and internet (236) — filer or non-filer |
| Final WHT | ❌ No — it is a final tax, no refund | Dividends (Section 150, because Section 8 applies to Section 5) 15%/30%, Prize Bonds (Section 156(3)) 15%/30%, IT Exports (Section 154A(2)) 1% |
| It depends | ⚠️ On the circumstances | Bank profit (Section 151) 20%/40% — Section 7B makes it final only when the recipient is not a company and profit on debt does not exceed Rs 5,000,000. For a company, or an amount above Rs 5,000,000, it is adjustable. |
Important: adjustable or final depends on the section, not on filer status. Section 168(2) sets the default: tax that was deducted becomes a credit against your annual liability. But there are two routes out of that default. First: the Section 169(1)(b) list — it includes Section 154A(2) (export of services) and Section 156(3) (prizes). Second, and commonly missed: Section 8 says tax charged under Sections 5, 7B and others is final. Section 5 taxes dividends — so dividend WHT is final and is not adjusted (there used to be an exception for companies, which the Finance Act 2013 ended). Section 7B taxes bank profit, but only when the recipient is not a company and the profit does not exceed Rs 5,000,000 — in that case the Section 151 deduction is final; otherwise it is adjustable. Section 153 (goods/services/contracts) and Section 155 (rent) are always adjustable. The non-filer rate is higher, but what is adjustable is adjustable for a non-filer too.
7. How to Get Deducted WHT Back — In Practice
Many people think deducted WHT is simply lost. For WHT that is adjustable (see the table above), the method is:
- Keep the certificate. Under Section 164, the party that deducts tax must give you a copy of the Computerized Payment Receipt (CPR) and a certificate at the time of deduction. Receipts from your bank, mobile company and vehicle registration count as well.
- Declare it in your return. When filing your annual return, declare the WHT deducted during the year — this is the Section 168(2) credit.
- Apply the credit. For example, if your liability for the year is Rs 50,000 and Rs 40,000 WHT has already been deducted, you pay only Rs 10,000 more.
- A refund if too much was deducted. Section 170(1) says a person who has paid more tax than is due can apply to the Commissioner for a refund; under Section 170(2) the application must be in the prescribed form.
Two things this guide does not cover:
Advance tax is deducted on mobile and telephone bills under Section 236 — both prepaid and postpaid — and it is adjustable. And buying or selling property attracts Sections 236K and 236C, whose rates depend on the property value; for those, use the property tax calculator, which has the full tiered table.
8. FAQ — WHT Calculator Pakistan 2026-27
Q1. How much is withholding tax on services in Pakistan in 2026-27?
Under Section 153(1)(b) there is no single rate for services — it differs by category. For Tax Year 2027, filer / non-filer: specified services 7% / 14%; IT & IT-enabled 4% / 8%; independent professionals 15% / 30%; advertising (electronic/print media) 1.5% / 3%; terminal & port operating 12% / 24%; all other services 14% / 28%. A service that does not fall in the first four named categories pays 14% — so 14% is the default rate, not 7%. Independent professional services include doctors, lawyers, architects, accountants and software engineers working independently. TaxCalc PK's free WHT calculator works out the exact amount.
Q2. How much is withholding tax on goods in Pakistan in 2026-27?
Withholding tax on the supply of goods in Pakistan under Section 153(1)(a) is 5% filer / 10% non-filer for companies, and 5.5% filer / 11% non-filer for individuals/AOPs. It is deducted when a prescribed person (Section 153(7)) pays for goods.
Q3. How do I calculate my withholding tax with the WHT calculator?
Open TaxCalc PK's WHT calculator (taxcalcpk.com/wht-calculator), choose the payment type (goods, services, contract, rent, bank profit, dividend and so on — each option shows its section), enter the gross amount and choose the recipient's filer status. The calculator shows WHT Deducted, Net to Recipient and the effective rate, and says whether the deduction is adjustable or final.
Q4. Is withholding tax refundable in Pakistan?
Under Section 168(2), the default is that WHT deducted becomes a credit against your annual tax liability, and if too much was deducted you can apply for a refund under Section 170. Whether it is adjustable or final depends on the section, not on filer status. Section 153 (goods, services, contracts) and Section 155 (rent) are adjustable. Final are: Section 156(3) prize bonds and Section 154A(2) IT exports — both on the Section 169(1)(b) list — and dividends, because Section 5 taxes them and Section 8 makes that tax final (the exception for companies was ended by the Finance Act 2013). Bank profit sits in between: Section 7B makes it final when the recipient is not a company and profit on debt does not exceed Rs 5,000,000 — otherwise the Section 151 deduction is adjustable.
Q5. Do freelancers pay withholding tax in Pakistan too?
Freelancers' IT export remittances bear 1% WHT under Section 154A — a final tax (not adjustable), and 0.25% for PSEB-registered IT exporters. There is no non-filer uplift on Section 154A — rule 10(ca) of the Tenth Schedule keeps this section outside the Schedule. Payments from local clients bear the normal Section 153 rates. Note for content creators: the Finance Act 2026's new Section 154B imposes a 5% deduction on revenue from social media platforms, and which of 154A and 154B applies is not yet clear in the law.
Q6. What happens if the payer did not deduct WHT?
Under Section 161(1), a person who should have deducted tax and did not is personally liable for that tax, and the Commissioner can recover it from them — after giving an opportunity to be heard. Section 161(2) gives them the right to recover that amount from the recipient. If the recipient has already paid the tax themselves, it is not collected from the payer, but under Section 161(1B) the payer owes default surcharge of 12% a year. Best practice: state WHT clearly in the contract/invoice and get a certificate on deduction.
Q7. Can multiple WHT sections apply to one payment?
Section 153 has three separate clauses — (a) goods, (b) services, (c) contracts — and which rate applies depends on the nature of the payment. The Ordinance has no general provision saying only one section can apply to a payment, and the classification of mixed transactions (such as supply plus installation) is often disputed in practice. It is better to show the goods and services amounts separately on the invoice and contract, and to confirm mixed cases with your tax advisor.
Q8. Where do I get a WHT certificate?
Section 164 is clear on this: the party that deducts or collects tax is legally obliged to give you, at the time of deduction, a copy of the Computerized Payment Receipt (CPR) — or an equivalent document — and a certificate showing the amount deducted. That certificate is your record for claiming the credit in your annual return. If the payer does not give a certificate, ask for it in writing; the Ordinance makes it mandatory.
Q9. Does a small business owner have to deduct WHT?
It is not a question of "small" or "large" — Section 153(7) gives a list of prescribed persons, and the obligation to deduct applies only to that list. It includes the Federal Government, any company, an AOP constituted by law, a non-profit organization, a foreign contractor or consultant, and a consortium/joint venture. An AOP with turnover of Rs 50 million or more (in tax year 2007 or any later year) and an individual with turnover of Rs 50 million or more (tax year 2009 or later) are also prescribed persons. So even a sole proprietor becomes responsible for deducting if their turnover has ever reached Rs 50 million. Section 155 (rent) has its own separate prescribed-person list.
Q10. What is the difference between WHT and GST?
WHT (withholding tax) is an advance payment of income tax — under the Income Tax Ordinance. GST (sales tax) is charged on supplies — under the Sales Tax Act. They are separate taxes, and both can apply to the same transaction.
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