Pakistan tax
Tax residence: At least 183 days in tax year. 2 special regimes for new residents: Foreign-source income of short-term resident employees exempt and Foreign-source salary of residents exempt if foreign tax is paid.
Checked against official sources on Change log
Tax residence
- At least 183 days in tax year · An individual present in Pakistan for 183 days or more in the tax year is a resident individual.
- Residence is tested on days present in Pakistan in the tax year, not on visa status.
Special regimes for new residents
Special regime
Foreign-source income of short-term resident employees exempt for up to three years
Tax relief
Details
Foreign-source income of an individual who is resident only because of employment in Pakistan and is present for no more than three years is exempt from Pakistani tax. 2
Taxed on
Foreign-source income of a resident individual whose residence arises solely from employment.
Who it applies to
- The individual is a resident individual solely by reason of employment.
- The individual is present in Pakistan for a period or periods not exceeding three years.
Exclusions
- Income derived from a business of the person established in Pakistan is not exempt.
- Foreign-source income brought into or received in Pakistan is not exempt.
Tax residence
Applies to individuals resident for the tax year solely through employment; presence is limited to three years.
Visas
Relevant to work visa holders such as the employer-sponsored general and CPEC work visas.
Other taxes
Other taxes on Pakistan-source income apply normally.
Checked against official sources on Change log
Special regime
Foreign-source salary of residents exempt if foreign tax is paid
Tax relief
Details
- Who: Foreign-source income tax has been paid on the salary
Foreign-source salary received by a resident individual is exempt from Pakistani tax if foreign-source income tax has been paid on it, including tax withheld by the employer. 2
Taxed on
Foreign-source salary of resident individuals.
Who it applies to
- Foreign-source income tax has been paid on the salary, or the employer withheld tax and paid it to the revenue authority of the country where the employment was exercised.
Exclusions
- Foreign-source income other than salary is taxed in Pakistan with a credit for foreign tax paid, under section 103.
Tax residence
Applies to individuals who are resident in Pakistan for the tax year under the 183-day test.
Visas
Not tied to any visa.
Other taxes
Foreign-source income that is not salary is taxed in Pakistan with a foreign tax credit limited by the Ordinance.
Checked against official sources on Change log
Which visas the regimes apply to
- Foreign-source income of short-term resident employees exempt: Work visa, CPEC work visa. Relevant to work visa holders such as the employer-sponsored general and CPEC work visas.
Standard rules and foreign-source income
Standard rules
Personal income tax: residents taxed on worldwide income, up to 35% on salary and 45% on other income, no surcharge on salary from tax year 2027
Progressive rates
Details
- Limit: PKR 600k/yr ≈ $2,170
Resident individuals pay income tax on worldwide income at progressive rates: 0% up to PKR 600,000, (≈ $2,170) rising to 35% on salaried income above PKR 7,000,000 (≈ $25,300) and 45% on other income above PKR 5,600,000 (≈ $20,200); from tax year 2027 salaried individuals pay no surcharge. Non-residents pay on Pakistan-source income. 1 2 3
Taxed on
Taxable income of residents from all sources (salary, property, business, capital gains, other sources) and Pakistan-source income of non-residents.
Who it applies to
- An individual is resident if present in Pakistan for 183 days or more in the tax year, if an employee or official of the federal or a provincial government posted abroad, or if a Pakistani citizen who is not present in another country for more than 182 days and is not a tax resident of another country.
- Individuals whose salary is more than 75% of taxable income use the salaried table, others use the general table.
- Salaried table: 0% to PKR 600,000 (≈ $2,170); 1% to PKR 1,200,000 (≈ $4,330); 11% to PKR 2,200,000 (≈ $7,940); 20% to PKR 3,200,000 (≈ $11,600); 25% to PKR 4,100,000 (≈ $14,800); 29% to PKR 5,600,000 (≈ $20,200); 32% to PKR 7,000,000 (≈ $25,300); 35% above.
- General table: 0% to PKR 600,000 (≈ $2,170); 15% to PKR 1,200,000 (≈ $4,330); 20% to PKR 1,600,000 (≈ $5,780); 30% to PKR 3,200,000 (≈ $11,600); 40% to PKR 5,600,000 (≈ $20,200); 45% above.
- Surcharge (section 4AB): individuals and associations of persons with taxable income above PKR 10 million (≈ $36,100) pay a 10% surcharge on the income tax, but no surcharge is payable by an individual deriving income chargeable under the head Salary; the Finance Act 2026, in force from 1 July 2026, removed the 9% surcharge that applied to salaried individuals, so salaried individuals pay no surcharge in tax year 2027.
Exclusions
- Non-residents are taxed only on Pakistan-source income such as salary for work done in Pakistan, dividends from Pakistani companies and rent from Pakistani property.
Limits
- PKR 600,000 a year (≈ $2,170) · Taxable income up to which the rate is 0% in both tables
- PKR 7,000,000 a year (≈ $25,300) · Salaried individuals: taxable income above which the top rate of 35% applies
- PKR 5,600,000 a year (≈ $20,200) · Other individuals: taxable income above which the top rate of 45% applies
Days in the country
- At least 183 days in tax year · An individual present in Pakistan for 183 days or more in the tax year is a resident individual.
Tax residence
Residence is tested on days present in Pakistan in the tax year, not on visa status.
Visas
Immigration status does not decide tax residence; a work or business visa holder who spends 183 days or more in Pakistan in a tax year is resident.
Other taxes
Foreign tax credit is available under section 103; super tax on high earning persons under section 4C is charged separately.
Checked against official sources on Change log
VAT, social security and other taxes
- Foreign tax credit is available under section 103; super tax on high earning persons under section 4C is charged separately.
- Other taxes on Pakistan-source income apply normally.
- Foreign-source income that is not salary is taxed in Pakistan with a foreign tax credit limited by the Ordinance.
Questions people ask
When do you become a tax resident in Pakistan?
At least 183 days in tax year (An individual present in Pakistan for 183 days or more in the tax year is a resident individual). Residence is tested on days present in Pakistan in the tax year, not on visa status.
Who qualifies for Foreign-source income of short-term resident employees exempt?
The individual is a resident individual solely by reason of employment. Relevant to work visa holders such as the employer-sponsored general and CPEC work visas.
Who qualifies for Foreign-source salary of residents exempt if foreign tax is paid?
Foreign-source income tax has been paid on the salary, or the employer withheld tax and paid it to the revenue authority of the country where the employment was exercised. Not tied to any visa.
≈ USD figures are approximate: daily reference rates from ExchangeRate-API, dated 12 Oct 2026, refreshed when the site is updated.
Sources (3)
Official sources
- Income tax basics · Federal Board of Revenue · checked 2026-10-11
- Income Tax Ordinance, 2001 (amended up to 30 June 2026) · Federal Board of Revenue · checked 2026-10-11
- Finance Act, 2026, Gazette of Pakistan Extraordinary, 26 June 2026: First Schedule Part I Division I table for salaried individuals and amendment of section 4AB · Government of Pakistan (Federal Board of Revenue) · checked 2026-10-10 · published 2026-06-26