AOP · Non-Salaried · Business
Business tax,
accurately calculated.
For partnerships, sole proprietors, and AOPs in Pakistan. Slab-by-slab calculation from 15% to 45% with surcharge handling.
Calculate
FY 2025-26
PKR
Annual: PKR 1,800,000
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PKR 230,000
≈ PKR 19,167/month·Effective 12.78%
Take-home · annual
₨1,570,000
Take-home · monthly
₨130,833
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Frequently asked questions
What is AOP in Pakistan tax law?
AOP (Association of Persons) under the Income Tax Ordinance 2001 includes partnerships, joint ventures, and any group of persons carrying on business jointly. It also covers sole proprietors and freelancers earning from local clients (not export). AOP is taxed at higher rates than salaried individuals.
How are AOP rates different from salaried rates?
AOP rates are significantly higher. For FY 2025-26, salaried individuals pay 1% on income above PKR 600k while AOP pays 15%. The top AOP rate of 45% kicks in above PKR 5.6M, compared to 35% for salaried. This reflects the policy view that AOPs have more avenues to reduce taxable income through business expenses.
When does the 10% surcharge apply?
For AOP and non-salaried individuals, an additional 10% surcharge on calculated tax applies if total taxable income exceeds PKR 10 million in the tax year (FY 2024-25 onwards). This is applied on top of the regular slab tax.
Can I deduct business expenses?
Yes. AOPs can deduct legitimate business expenses (rent, utilities, salaries, depreciation, professional fees, advertising) from gross income before applying tax slabs. Documentation is critical — keep all receipts and invoices. The calculator works on net taxable income after deductions.
Should I file as AOP or convert to a private limited company?
For high-earning businesses (annual income above PKR 5M), forming a private limited company is often more tax-efficient. Companies pay a flat 29% corporate tax rate vs AOP top rate of 45%. However, dividend distributions are taxed at 15%, so total tax burden depends on structure. Consult a tax practitioner for the right structure for your income level.