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Section 154ATY 2026-27

Freelancer Tax Calculator Pakistan 2026-27

Work out the tax on foreign income from exported services — Upwork, Fiverr, direct clients — under section 154A, and compare it with what the normal business-income regime would charge on the same earnings.

About this calculator

Who it is for
Freelancers and IT exporters paid by foreign clients into a Pakistani bank account.
What you need
Your export proceeds for the year, the kind of service, and your expenses if you want the normal-regime comparison.
What it works out
Tax on export proceeds under section 154A, compared with the normal business-income regime.
Tax years
Tax years 2025-26 and 2026-27
Not covered
Income from clients in Pakistan: that is ordinary business income — use the business tax calculator.
After your result

How much tax is due on PKR 6,000,000 of freelance income in 2026-27?

PKR 15,000 for a PSEB-registered IT freelancer (0.25%), or PKR 60,000 at 1% for other exported services — deducted by the bank when the payment is converted, and final if the section 154A(2) conditions are met.

Under the normal regime the same income, less PKR 1,000,000 of expenses, is PKR 5,000,000 of business income taxed at the non-salaried rates: PKR 1,370,000. That gap is why filing your return on time, which keeps the lower rate final, matters so much.

The rules the calculator applies

  • Rates: 0.25% of proceeds for computer software, IT and IT-enabled services by a PSEB-registered and certified exporter, for tax years 2024 to 2029; 1% in every other case (section 154A(1); Division IVA, Part III, First Schedule).
  • When it is final: your return is filed, withholding statements are filed if required, and sales tax returns are filed if required (not needed for a PSEB-registered IT exporter). No foreign tax credit is allowed (section 154A(2)).
  • Otherwise: the income is taxed under the normal regime — the non-salaried slab rates, with the 10% surcharge above PKR 10 million — and the bank deduction is credited against it (section 154A(3)). You can also opt out each year when you file.
  • Non-filers: there is no higher rate. Rule 10(ca) of the Tenth Schedule excludes section 154A from the non-ATL increase.

Freelancer tax FAQs

Freelancers who export services pay tax on their foreign income when a bank in Pakistan converts it. The rate is 0.25% of the proceeds for computer software, IT and IT-enabled services where the freelancer is registered with and certified by the Pakistan Software Export Board (PSEB), and 1% in every other case.

Both rates are set by section 154A and Division IVA of Part III of the First Schedule to the Income Tax Ordinance 2001. The 0.25% rate applies for tax years 2024 to 2029. On PKR 6,000,000 of IT export income that is PKR 15,000 for a PSEB-registered freelancer, or PKR 60,000 at 1%.

Only if you meet the conditions in section 154A(2): your income tax return is filed, withholding statements are filed if you are required to file them, and sales tax returns are filed if required. The sales tax condition does not apply to a PSEB-registered IT exporter, and no foreign tax credit can be claimed against the final tax.

If you do not meet the conditions, the income is taxed under the normal regime instead - as business income at the non-salaried rates - and the amount your bank deducted is credited against that tax.

No. The Tenth Schedule, which doubles most withholding rates for people not on the Active Taxpayers List, does not apply to tax deducted under section 154A (rule 10(ca)). The rate is 0.25% or 1% either way.

Not filing still costs you: without a filed return the deduction is not your final tax, and the income falls into the normal regime.

Yes. Section 154A(3) lets you opt out of final taxation, and the choice is made each year when you file your return. It can help when your income after expenses is low - below the PKR 600,000 tax-free threshold, for example - because the normal regime would then charge less than was deducted.

For most freelancers the final-tax regime is far cheaper. The calculator shows both figures so you can see which applies to you.

Yes. The 0.25% rate in section 154A(1)(a) applies only to exports of computer software, IT or IT-enabled services where the exporter is registered with and duly certified by the Pakistan Software Export Board. Without that registration, the same work is taxed at 1%.

Sources and updates

Section 154A and Division IVA of Part III of the First Schedule to the Income Tax Ordinance 2001, as amended up to 30 June 2026; rule 10(ca) of the Tenth Schedule. Normal regime: Division I, Part I of the First Schedule, paragraph (1), and section 4AB.

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Tax Pakistan is an independent site, not part of FBR or any government body. Where a figure matters — a return, a refund claim, a dispute — confirm it against the official source or with a tax adviser.