Step 1: Identify the tax regime

Pakistan has three different tax regimes for individual income, each with its own slabs:

Salaried: Where salary is more than 75% of total income. Lower rates starting at 1%.
AOP / Non-salaried: Partnerships, sole proprietors, and individuals whose primary income is not salary. Higher rates starting at 15%.
Freelancer / IT Export (Section 154A): Final tax at 0.25% (PSEB) or 1% (non-PSEB) on export income.

Step 2: Apply progressive slabs (salaried & AOP)

Pakistan uses progressive slab-based taxation. Each portion of your income is taxed at the rate of the bracket it falls into, not your highest bracket.

Example for salaried, FY 2025-26, annual income PKR 2,500,000:

First PKR 600,000 at 0% = PKR 0
Next PKR 600,000 (600k–1.2M) at 1% = PKR 6,000
Next PKR 1,000,000 (1.2M–2.2M) at 11% = PKR 110,000
Final PKR 300,000 (2.2M–2.5M) at 23% = PKR 69,000
Total tax: PKR 185,000

Step 3: Apply surcharge (if applicable)

For both salaried and AOP, an additional surcharge applies if total annual income exceeds PKR 10 million:

Salaried: 9% surcharge on calculated base tax (FY 2025-26)
AOP / Non-salaried: 10% surcharge on calculated base tax

The surcharge is a percentage of the tax owed, not of income. So if your base tax is PKR 1,000,000 and the surcharge is 9%, you pay an additional PKR 90,000.

Step 4: Freelancer final tax (Section 154A)

For IT/IT-enabled service exports, the calculation is simpler — a flat percentage of export income, withheld at the bank when funds arrive:

PSEB-registered: 0.25% × Export Income
Not registered: 1% × Export Income

This is a final tax — meaning no further income tax filing is needed for this specific income. If you have other Pakistani income (local clients, salary from a job), that gets taxed separately under the regular slabs.

Sources

Our slab data is verified against:

FBR Finance Act 2025 — published in the Gazette of Pakistan, June 2025
FBR Finance Act 2024 — published June 2024
FBR Finance Act 2023 — published June 2023
PwC Tax Summaries Pakistan — at taxsummaries.pwc.com/pakistan
KPMG Pakistan Budget Brief 2025

Update cadence

We update FileKero within 24 hours of any FBR notification — including the annual budget in June and any mid-year revisions. The Tax Configurations are managed through our CMS, so changes deploy automatically with no code changes required.