Withholding Tax Calculator — Pakistan (Section 153, 155, 151, 150) 2026-27
Tax to withhold on payments in Pakistan for Tax Year 2027: goods, services, IT services, professionals and contracts under section 153, rent, bank profit and dividends, at the Finance Act 2026 rates for filers and non-filers, with net payable and the minimum/final/adjustable treatment.
| Section and rate | — |
|---|---|
| Tax withheld | — |
| Net payable to the payee | — |
| If the payee were a filer / non-filer | — |
| Tax treatment for the payee | — |
| Threshold | — |
| Deposit and statement | — |
In short
For Tax Year 2027 Pakistani withholding agents deduct 5% / 5.5% on goods, 14% on services (7% specified services, 4% IT services, 15% professionals), 7.5% / 8% on contracts, slab rates on rent, 20% on bank profit and 15% on dividends — all doubled for payees not on the Active Taxpayers List; for most goods, services and contracts the deduction is a minimum tax that cannot be refunded.
Who this is for: Accounts teams and withholding agents deducting tax on supplier, contractor, service and rent payments — and payees checking the deduction on their invoice.
Withholding tax on supplier, service and contract payments (s.153) in Tax Year 2027
Every company (and larger AOPs, government bodies and NGOs) in Pakistan is a withholding agent: when it pays a supplier, service provider, contractor or landlord it must deduct income tax at the rate in the First Schedule and deposit it with FBR, giving the payee a certificate to claim in their return. The rates for Tax Year 2027 (from 1 July 2026):
- Goods: 5% from companies, 5.5% from individuals and AOPs (1.5% rice, cotton seed and edible oil; 9% / 11% toll manufacturing).
- Services: 14% generally; 7% for the specified list (transport, freight forwarding, courier, security, hotels, warehousing, IT and others); 4% for IT and IT-enabled services; 15% for independent professionals; 1.5% for media advertising; 12% for terminal and port operators.
- Contracts: 7.5% from companies, 8% from others, 15% for sportspersons.
- Non-filers pay double every rate above, and for most payees s.153 tax is a minimum tax — it cannot be refunded even if the business made a loss.
- Rent (s.155): slab rates on the annual rent for individual landlords (nil to PKR 300,000), 15% / 30% for company landlords; bank profit (s.151) 20% / 40%; dividends (s.150) 15% / 30%.
See also: Filer vs Non-Filer Tax Calculator — Pakistan, Rental Income Tax Calculator — Pakistan.
Assumptions
- Rate from the FBR TY2027 card by payment type and payee type; non-filer = double the ATL rate (rent for individuals uses the s.155 slabs on annual rent as an effective rate).
- Tax = rate × gross amount excluding sales tax; net = gross − tax.
- Treatment labels (minimum / final / adjustable) follow the general rule; reduced-rate certificates and exemptions are not applied.
Worked example
Other services at 14% → withhold PKR 140,000 and pay PKR 860,000; if the consultant is not on the ATL the rate doubles to 28% (PKR 280,000). The same invoice from an IT services firm attracts 4% (PKR 40,000); from an independent professional 15% (PKR 150,000); for a supply of goods by a company 5% (PKR 50,000); for a contract by an individual 8% (PKR 80,000). The deduction is a minimum tax for the payee.
Frequently asked questions
What is the withholding tax rate on services in Pakistan 2026-27?
14% of the gross amount for most services (28% for non-filers), 7% for the specified-services list, 4% for IT and IT-enabled services and 15% for independent professionals, under section 153(1)(b).
What is the withholding tax on supply of goods?
5% when the supplier is a company and 5.5% for individuals and AOPs (10% / 11% for non-filers); 1.5% on rice, cotton seed and edible oils; exempt where annual payments to the supplier are below PKR 75,000.
Who is required to deduct withholding tax?
Companies, AOPs and individuals with turnover of PKR 100 million or more, federal and provincial governments, NGOs, foreign contractors and other prescribed persons — the payer deducts, deposits and files statements under s.165.
Is withholding tax on services refundable?
No — for most service providers it is a minimum tax: it is credited against the tax computed in the return, but any excess is not refunded. Companies get adjustable treatment only in specified cases.
Is sales tax included in the base for withholding?
No — income tax is withheld on the invoice value excluding sales tax; provincial sales tax on services is a separate withholding under PRA/SRB rules.
What if the payee is a non-filer?
Every s.153 rate doubles for persons not on the Active Taxpayers List — 28% on services, 11% on goods, 16% on contracts — which is why suppliers file a return before invoicing companies.
What is the threshold for withholding on goods and services?
No deduction where total payments to a supplier of goods in a year are under PKR 75,000, or for services under PKR 30,000; above that the whole amount is subject to withholding.
How do I get a reduced-rate or exemption certificate?
Apply to the Commissioner under section 153(4) with evidence that the deductions exceed your likely tax; manufacturers and some listed companies routinely obtain them.
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