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Pakistan self-employed income tax calculator (2026-27)

A self-employed individual in Pakistan pays income tax on business or professional profit at the non-salaried rates — nothing on the first Rs600,000, then 15% rising to 45% above Rs5.6 million — and a surcharge of 10% of that tax when taxable income exceeds Rs10 million.

Worked example · Income after tax

With Business or professional receipts for the year of 5,000,000, this model computes Income after tax of 2,410,000 PKR. See the full working.

✓ Verified against 6 self-test cases Updated for 2026-27 · sources checked 2026-11-01

How business income tax in Pakistan is calculated

Clause (1) of Division I of Part I of the First Schedule to the Income Tax Ordinance 2001 taxes every individual and association of persons **except a salaried individual**: **0%** up to Rs600,000, then **15%**, **20%**, **30%**, **40%** and **45%** on bands that break at Rs1.2 million, Rs1.6 million, Rs3.2 million and Rs5.6 million. The table dates from the Finance Act 2024; the Finance Act 2026 changed only the salaried table.

On **Rs3 million of profit** the tax is **Rs590,000** — Rs170,000 + 30% of Rs1.4 million. Section 4AB adds a **surcharge of 10%** of the tax where taxable income **exceeds Rs10 million**; FBR Circular 02 of 2026-27 confirms it continues for non-salaried individuals. It applies to the whole tax, so Rs12 million of profit pays Rs4,490,000 + Rs449,000.

Tax withheld or collected in advance during the year, minimum and final taxes on particular receipts, super tax above Rs500 million, zakat and tax credits are not modelled. The page assumes no salary: an individual with any salary income pays no surcharge (s.4AB proviso). Estimate, not tax advice.

Worked example

ShowHide the full working: 2 inputs, 5 computed steps
Rs3,000,000 of profit: Rs170,000 + 30% of Rs1,400,000 = Rs590,000
Inputs
Business or professional receipts for the year (PKR)5,000,000
Deductible business expenses (PKR)2,000,000
Computed by the engine
Taxable income ✓ pinned3,000,000 PKR
Income tax (Division I clause 1) ✓ pinned590,000 PKR
Surcharge 10% (taxable income above Rs10 million) ✓ pinned0 PKR
Tax incl. surcharge ✓ pinned590,000 PKR
Income after tax ✓ pinned2,410,000 PKR

Every computed row comes from the engine, run on the inputs above. Rows marked ✓ pinned are also fixed by a published self-test, so a change to the model that moved them would fail its own tests.

Frequently asked questions

What are the tax rates for non-salaried individuals in 2026-27?

0% up to Rs600,000; 15% to Rs1.2 million; 20% to Rs1.6 million; 30% to Rs3.2 million; 40% to Rs5.6 million; 45% above. A 10% surcharge on the tax applies above Rs10 million of taxable income.

How much tax does a freelancer pay on Rs3 million of profit?

Rs590,000 for tax year 2026-27, leaving Rs2,410,000.

When are the salaried rates used instead?

When salary is more than 75% of your taxable income (clause (2) of Division I). Otherwise the non-salaried rates on this page apply to all of it.

Sources

Estimate. Not tax advice. The verification badge means the model reproduces the stated formula through 6 self-test cases; the sources support that the formula matches the rules.

Check the arithmetic yourself: how this calculator is verified — the formula behind every derived value, the 6 test cases the engine reproduces, and what the badge does and does not claim. Also available as machine-readable JSON.

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