Withholding Tax Calculator Pakistan 2026-27

Understanding Withholding Tax in Pakistan

Withholding tax (WHT) is the advance income tax that the payer deducts at the source of a payment before transferring the net amount to the recipient. It is governed by multiple sections of the Income Tax Ordinance 2001 and applies to a wide range of transactions including services, goods, contracts, rent, dividends, bank profits, and freelancer remittances. WHT serves two main purposes: it advances the government's tax collection throughout the year rather than waiting for annual returns, and it creates a paper trail that makes it harder to underreport income.

Whether WHT is adjustable or a final tax depends on the section it was deducted under, not on your filer status. Section 168(2) sets the default: the tax deducted is a credit against your annual liability, and if it exceeds that liability the excess is recoverable — Section 170 lets a taxpayer apply to the Commissioner for a refund of tax paid in excess. That default covers Section 153 (goods, services, contracts) and Section 155 (rent). Three things sit outside it. Dividends are a final tax — Section 5 imposes the tax and Section 8 makes tax under Section 5 final, so the Section 150 deduction cannot be adjusted or refunded (the proviso that used to exempt companies was omitted by the Finance Act 2013). IT export remittances (Section 154A(2)) and prize-bond winnings (Section 156(3)) are final under the closed list in Section 169(1)(b). And bank profit is conditional: Section 7B makes it final only where the recipient is not a company and the profit on debt does not exceed Rs 5,000,000; above that threshold, or for a company, the Section 151 deduction is adjustable like any other. The calculator above helps you determine the exact WHT amount on any transaction based on its section, amount, and the recipient's filer status.

WHT Rates by Section (2026-27)

Different WHT sections apply to different payment types, and within Section 153(1)(b) the rate depends on which category the service falls in — 14% is the default for anything the statute does not name. Every rate below is read from the same table the calculator uses, so the two cannot disagree.

Rent to an individual or AOP landlord is the one row that is not a flat percentage: Section 155 applies progressive slabs there, doubled for non-filers, and the calculator above works them out. Section 154A is the other exception — Rule 10(ca) of the Tenth Schedule puts it outside the non-filer regime, so filer status does not change it.

Filer vs Non-Filer WHT Impact

Across nearly every WHT section, non-filers pay exactly double the filer rate. The mechanism is Rule 1 of the Tenth Schedule, which increases the rate by hundred percent for anyone not on the Active Taxpayers’ List. Section 154A is the exception on this calculator — Rule 10(ca) puts it outside the Schedule, so IT export remittances are withheld at 1% either way. This is otherwise one of the most punitive aspects of being a non-filer in Pakistan. A bank profit of Rs 100,000 earned by a filer attracts Rs 20,000 WHT, while a non-filer pays Rs 40,000 — exactly double. On Rs 1,000,000 of annual rent paid to an individual landlord, the Section 155 slabs give Rs 55,000 for a filer and Rs 110,000 for a non-filer — Rs 55,000 more, withheld from the same rent.

Registering as an FBR active filer is done through the IRIS portal. For anyone with regular WHT exposure — salaried individuals, landlords, freelancers, business owners, investors — the savings from filer status easily exceed the small effort of filing an annual return. See our complete filer registration guide for step-by-step instructions.

WHT for Freelancers and IT Exports

Freelancers and IT exporters receive a special concessional WHT rate under Section 154A: a flat 1%, or 0.25% for PSEB-registered exporters, extended by the Finance Act 2026 to cover tax years through 2029. Section 154A carries no non-filer penalty. Rule 10 of the Tenth Schedule lists the sections the non-filer regime does not reach and clause (ca) names Section 154A, so an exporter who is not on the Active Taxpayers’ List is withheld at the same 1% (or 0.25%) as one who is. FBR’s own withholding rate card prints the non-ATL column blank for this row and cites R.10(ca) as the reason. The statutory condition for the lower rate is registration with the Pakistan Software Export Board; confirm any further documentation requirement with PSEB or FBR directly.

How to Deposit WHT with FBR

Section 160 requires tax that has been deducted to be paid to the Commissioner — but it sets the deadline by reference, not directly: the tax is payable “within the time and in the manner as may be prescribed”, which puts the actual due date in the Income Tax Rules rather than the Ordinance. We have not read that rule, so this page does not state a date; check the current deadline with FBR or your tax adviser before relying on one. In practice the payment is made through the IRIS portal using a PSID (Payment Slip ID). Late deposit attracts penalty and default surcharge under the Income Tax Ordinance 2001; the amount depends on the section and the delay, so confirm the current figure with FBR or a tax adviser rather than budgeting from a number quoted online. Maintaining proper WHT records and timely deposits is therefore essential for any business or individual that deducts WHT.

The WHT credit appears against the recipient in IRIS once FBR has processed the payment; FBR does not publish a guaranteed processing time, so check Payment History rather than assuming a window. Keep the WHT deduction certificate your payer issues, and the CPR for anything you deposit yourself, as proof in case of an FBR audit.

Frequently Asked Questions