Tool 07
Freelancer & IT Export Tax Calculator
Estimate the Section 154A tax your bank deducts on foreign IT income.
Freelance and IT export income received through a bank in Pakistan is taxed under Section 154A of the Income Tax Ordinance at a final rate that depends on whether the exporter is registered with the Pakistan Software Export Board and whether they are on the Active Taxpayer List.
Export income details
Tax your bank deducts on foreign IT income
Tax year
Currency received
Active Taxpayer List (ATL) status
You must be on the ATL for the 0.25% rate and for the deduction to count as final tax.
PSEB registered
Your Pakistan Software Export Board registration must be active to get the lower rate.
Enter income before platform fees, bank charges or business expenses.
Use the rate from the day the payment reached your bank account. Any default here is only an example.
Tax-rate alerts
Don't miss a change to the Section 154A rates
We'll email you if the export rates or the PSEB concession change, plus one reminder before the return deadline.
Freelancer tax rates in Pakistan for 2026-27
Your PSEB registration and your place on the Active Taxpayer List decide which Section 154A rate applies to eligible IT and IT-enabled export income. The 0.25% PSEB rate is extended through tax year 2029. Non-filers pay double.
| PSEB status | Taxpayer status | Rate on income before fees | How the tax is treated |
|---|---|---|---|
| Registered | Filer (on ATL) | 0.25% | Lower PSEB rate under Section 154A |
| Not registered | Filer (on ATL) | 1% | General rate under Section 154A |
| Registered | Non-filer | 0.5% | Double the filer rate, for non-filers |
| Not registered | Non-filer | 2% | Double the filer rate, for non-filers |
For non-filers, these rates estimate what the bank may deduct. If you are not on the ATL or do not meet the other Section 154A requirements, this may not be your final tax.
How freelancer tax is calculated under Section 154A
Convert the foreign payment to PKR using the exchange rate from the day it reached your bank account. The rate applies to the full amount before platform fees, bank charges or business expenses.
Formula
Tax=export income in PKR before fees and expenses×tax rate
2026-27 worked example
US$ 2,000 a month at an example rate of PKR 280/US$ is Rs. 6,720,000 of export income per year.
These figures follow the details you entered above, not a live exchange rate.
When the lower PSEB rate applies
Your income is from IT or IT-enabled services provided to foreign clients.
Your PSEB registration is active and you are on the Active Taxpayer List.
The foreign-currency payment reaches you through a bank in Pakistan.
Meet all of the Section 154A conditions and the deduction is your final tax on that export income — you still file the yearly return to stay on the ATL.
Income from Pakistani clients
Section 154A does not cover local-client income. Keep it separate and treat it as business income.
Use the business calculatorCommon freelancer tax scenarios
All export income
Every client is outside Pakistan, your PSEB registration is active and you are on the ATL. The bank deduction under Section 154A is your final tax on that income, and you still file the yearly return.
Mixed income
Some income comes from foreign clients and some from Pakistani clients. Keep the two apart: only the foreign export income falls under Section 154A, and the local business income is taxed under the normal business rules.
PSEB or ATL requirement not met
Without an active PSEB registration the general 1% rate applies instead of 0.25%. If you are also off the Active Taxpayer List, the rate doubles and the deduction may not count as your final tax.
Freelancer tax questions
For eligible IT and IT-enabled export income under Section 154A, a filer pays 0.25% with active PSEB registration or 1% without it. From 2025-26 a non-filer pays 0.5% with PSEB registration or 2% without. The rate applies to income before fees and expenses, not to profit.
PSEB is the Pakistan Software Export Board. An active PSEB registration, combined with being on the Active Taxpayer List and meeting the other Section 154A conditions, is what unlocks the lower 0.25% rate.
If you meet all the Section 154A requirements, including receiving the payment through a bank in Pakistan, the deduction is the final tax on that export income. You still file an annual return to stay on the Active Taxpayer List.
On the export income before platform fees, bank charges and business expenses. For foreign currency, convert using the exchange rate from the day the payment reached your bank account.
The platform alone does not decide it. The payment must be for eligible IT or IT-enabled services and must reach Pakistan in foreign currency through a bank. Ask your bank how it records the payment.
That is business income and is taxed under the normal business rules, not Section 154A. Calculate it separately.
Normally yes. The bank deducts when an eligible foreign payment reaches your account in Pakistan, and gives you a deduction certificate you use when filing.
Where these figures come from
Every rate in this tool is read from the official documents below. Open any of them to check a figure yourself.
FBR Withholding Income Tax Rate CardThe Section 154A export rates your bank deducts, for filers and non-filers.- Finance Act 2026The enacted budget law for 2026-27. It extends the 0.25% PSEB rate through 2029.
- Finance Act 2022It replaced the single flat rate with the 0.25% PSEB and 1% general rates.
- Finance Act 2021It created Section 154A and set its first rate: a flat 1%, with no PSEB rate.
- FBR Withholding Tax Rate Card 2022The FBR rate card updated to 30 June 2021, behind the 2021-22 figures.
- Income Tax Ordinance 2001Section 154A — the final tax on exports of IT and IT-enabled services.
FBR IRIS PortalFile your yearly return and declare your export income.
Rates last reviewed 20 August 2026 against the sources above. Found a figure that does not match the source? Report a correction.
This calculator gives an estimate, not tax or legal advice, and nothing you type is stored unless you send it to us. Confirm your final position with a qualified Pakistan tax professional.
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