# Business income tax Pakistan 2026-27 — self-employed calculator

Source page: https://valem.run/calculators/pakistan/self-employed

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.

**Tax year:** 2026-27

## How it 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

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

## Inputs

| Name | Label | Type |
| --- | --- | --- |
| `annualTurnover` | Business or professional receipts for the year (PKR) | number |
| `annualExpenses` | Deductible business expenses (PKR) | number |

## Sources

- [Income Tax Ordinance 2001 (FBR, amended to 30 June 2026), First Schedule Pt I Div I(1)](https://download1.fbr.gov.pk/Docs/2026724177725705IncomeTaxOrdinanace2001.pdf) (checked 2026-11-01)
- [Income Tax Ordinance 2001 s.4AB: 10% surcharge above Rs10 million](https://download1.fbr.gov.pk/Docs/2026724177725705IncomeTaxOrdinanace2001.pdf) (checked 2026-11-01)
- [FBR Circular 02 of 2026-27 (8 Sep 2026): surcharge stays 10% for non-salaried](https://download1.fbr.gov.pk/Docs/202698139527880CircularNo.2of2026-27.pdf) (checked 2026-11-01)

## What this page claims

The Valem engine reproduces this model's formula through 6 self-test cases. That shows internal consistency, not that the formula matches current law; the cited sources are the evidence for that. Estimate, not tax advice.

## For agents

- Model manifest (formula, constants, test vectors): https://valem.run/calculators/pakistan/self-employed.json
- Compute by URL: https://valem.run/calculators/pakistan/self-employed.json?annualTurnover=5000000
- MCP: https://valem.run/mcp/calculators (call `calculate` with calculator `pakistan/self-employed`)