How withholding tax is calculated
Multiply the gross amount by the rate for the type of payment. The rate depends on what is being paid for, who is being paid (company, individual or AOP) and whether they are on the Active Taxpayers’ List.
Tax withheld = gross amount × rate for the payment and the recipient’s ATL status
For property purchases under section 236K, the non-filer rate depends on the property’s value, and the rate for its band applies to the whole value. A PKR 60,000,000 property is in the PKR 50–100M band: a non-filer pays 14.5%, PKR 8,700,000, against PKR 750,000 for a filer.
Worked examples
- A company pays a supplier company PKR 2,000,000 for goods. It withholds PKR 100,000 (5%) if the supplier is on the ATL, or PKR 200,000 (10%) if not.
- A business pays PKR 500,000 for a service not listed separately in the law. It withholds PKR 70,000 (14%) from a filer or PKR 140,000 (28%) from a non-filer.
Withholding tax rates: Tax Year 2027 (1 July 2026 – 30 June 2027)
| Section | Payment | Filer | Non-filer |
|---|---|---|---|
| Supply of goods | |||
| 153(1)(a) | Supplies by a company | 5% | 10% |
| 153(1)(a) | Supplies by an individual or AOP | 5.5% | 11% |
| 153(1)(a) | Sale of rice, cotton seed or edible oils | 1.5% | 3% |
| 153(1)(a) | Toll manufacturing by a company | 9% | 18% |
| 153(1)(a) | Toll manufacturing by an individual or AOP | 11% | 22% |
| Services | |||
| 153(1)(b) | Services not listed separately | 14% | 28% |
| 153(1)(b) | Independent professional services | 15% | 30% |
| 153(1)(b) | IT and IT-enabled services | 4% | 8% |
| 153(1)(b) | Specified services | 7% | 14% |
| 153(1)(b) | Advertising paid to electronic and print media | 1.5% | 3% |
| Contracts | |||
| 153(1)(c) | Contract executed by a company | 7.5% | 15% |
| 153(1)(c) | Contract executed by an individual or AOP | 8% | 16% |
| 153(1)(c) | Sportspersons | 15% | 30% |
| Property | |||
| 236K | Buying property (paid by the buyer) | 1.25% | 10.5% up to PKR 50M, 14.5% up to PKR 100M, 18.5% above PKR 100M |
| 236C | Selling property (paid by the seller) | 2.75% | 11.5% |
| Banking | |||
| 151 | Profit on a bank account or deposit | 20% | 40% |
| 231AB | Cash withdrawal (daily total) | Nil | 0.8% when the day’s total exceeds PKR 50,000 |
| Dividend | |||
| 150 | Dividend (general case and REITs) | 15% | 30% |
| 150 | Dividend paid by an IPP | 7.5% | 15% |
| Vehicles | |||
| 231B(1) | New vehicle registration, Up to 850cc | 0.5% | 1.5% |
| 231B(1) | New vehicle registration, 851cc to 1000cc | 1% | 3% |
| 231B(1) | New vehicle registration, 1001cc to 1300cc | 1.5% | 4.5% |
| 231B(1) | New vehicle registration, 1301cc to 1600cc | 2% | 6% |
| 231B(1) | New vehicle registration, 1601cc to 1800cc | 3% | 9% |
| 231B(1) | New vehicle registration, 1801cc to 2000cc | 5% | 15% |
| 231B(1) | New vehicle registration, 2001cc to 2500cc | 7% | 21% |
| 231B(1) | New vehicle registration, 2501cc to 3000cc | 9% | 27% |
| 231B(1) | New vehicle registration, Above 3000cc | 12% | 36% |
This table covers the most common payments. FBR’s rate card also lists imports, exports, non-resident payments, rent, prizes, utilities and more.
