Pakistan expat tax 2026-27: 183 days and rates

Pakistan taxes your salary on a gentler scale than almost everything else. A salaried person pays at most 35%, and only on income above PKR 7 million. A freelancer, landlord or investor whose income goes on the general scale can pay 45% plus a surcharge. And if you export services from Pakistan and get paid through a Pakistani bank, the tax can be a flat 1%.

This guide covers Pakistani personal tax for tax year 2027, which runs from 1 July 2026 to 30 June 2027 (Pakistan names each tax year after the year it ends in).

The key question is simple. Is most of your income salary? If salary is more than 75% of your taxable income, the salaried scale applies. If not, you're on the general scale for individuals.

What's changed: the Finance Act 2026 (Act XLIII of 2026, published in the Gazette on 26 June 2026) took effect on 1 July 2026. It cut the salaried rates above PKR 2.2 million: the 23% and 30% bands are now 20% and 25%, and new 29% and 32% bands mean 35% only starts above PKR 7 million instead of PKR 4.1 million. The 9% surcharge on salaried people earning over PKR 10 million was removed, while the 10% surcharge on other individuals stays. The Act also abolished the tax on deemed income from property (section 7E) and removed the 1% capital value tax on foreign assets worth over PKR 100 million. The general scale for non-salaried individuals is unchanged. A year earlier, the Finance Act 2025 started taxing pensions from a former employer at 5% on the part above PKR 10 million a year.

📋 Pakistan tax at a glance for tax year 2027

Figures in rupees are converted at PKR 277 to US$1. The State Bank of Pakistan's revaluation rate was PKR 276.90 on 19 October 2026.

👉 State Bank of Pakistan: current US dollar rate

Salaried or not: Pakistan's two rate scales

Why does it matter whether you count as salaried? Because the two scales split sharply once income passes PKR 1.2 million a year.

Image 1 — Pakistan's salaried and non-salaried rate scales

The First Schedule to the Income Tax Ordinance sets one table for individuals and associations of persons, and a separate table for an individual whose salary is more than 75% of taxable income. On PKR 10 million a year, a salaried person pays about PKR 2.5 million and a self-employed person about PKR 3.6 million.

The surcharge widens the gap. From tax year 2027, people with salary income pay none, while other individuals pay an extra 10% of their income tax once taxable income is over PKR 10 million. Some income sits outside both scales: dividends, Pakistani bank profit, gains on listed Pakistani shares and Pakistani property, and exported services each have their own rates.

👉 FBR: Income Tax Ordinance 2001, amended up to 30 June 2026 (rates in the First Schedule)

👉 FBR: Circular 2 of 2026-27 explaining the Finance Act 2026

👉 FBR: Finance Act 2026 as published in the Gazette

When you become tax resident in Pakistan, and how you stop

Under section 82, you're resident for a tax year if you're in Pakistan for 183 days or more in that year, counted from 1 July to 30 June. The days don't need to be in one stay. There's no home or family test for foreigners.

The older test of 120 days plus 365 days over the previous four years was repealed in 2021.

Pakistani citizens face one more test. A citizen is resident if they aren't present in any other country for more than 182 days in the tax year, or aren't resident for tax in any other country. Moving around without settling anywhere can keep a citizen resident.

How do you stop? For a foreigner, it's a clean break: spend fewer than 183 days in the tax year and you're non-resident for that year, taxed only on Pakistani income. For a citizen, you also need to show more than 182 days in another country, or tax residence there. We found no exit tax.

Being resident doesn't always mean all your foreign income is taxed:

• Foreign employees (section 50): if you're resident only because of your job and you're in Pakistan for three years or less in total, your foreign income is exempt. The exemption doesn't cover a business set up in Pakistan, or foreign income you bring into or receive in Pakistan.

• Returning citizens (section 51): a Pakistani citizen who wasn't resident in any of the four previous tax years pays no tax on foreign income in the year they become resident and the next one.

• Foreign salary taxed abroad (section 102): a resident's foreign salary is exempt if foreign tax was withheld and paid in the country where the work was done.

Other foreign income of a resident is taxed, with a credit for foreign tax up to the Pakistani tax on that income (section 103).

👉 FBR: Income Tax Ordinance, sections 50, 51, 82, 102 and 103

Income tax rates for tax year 2027

If salary is more than 75% of your taxable income, these rates apply. Your employer works out the tax and deducts it from each month's pay.

Pakistan income tax rates for salaried individuals, tax year 2027

Source: Income Tax Ordinance, First Schedule, Part I, Division I, clause (2), as substituted by the Finance Act 2026.

The 1% band is narrow. At PKR 1.3 million the marginal rate is already 11%, and at PKR 2.5 million it's 20%.

For everyone else the general table applies: 0% up to PKR 600,000, 15% to PKR 1.2 million, PKR 90,000 plus 20% to PKR 1.6 million, PKR 170,000 plus 30% to PKR 3.2 million, PKR 650,000 plus 40% to PKR 5.6 million, and PKR 1,610,000 plus 45% above that. The 10% surcharge is added when taxable income tops PKR 10 million.

👉 FBR: withholding tax rate card, updated to the Finance Act 2026

Worked example

• You're resident and salaried for the whole of tax year 2027, earning PKR 27.7 million (about US$100k).

• Tax is PKR 1,424,000 plus 35% of the PKR 20.7 million above PKR 7 million, so PKR 1,424,000 + PKR 7,245,000 = PKR 8,669,000.

• There's no surcharge on salary income from this tax year. Your employer deducts about PKR 722,000 a month.

Your bill is about PKR 8.67 million, or 31.3% of your salary. Under the tax year 2026 rules, the same salary cost PKR 8,876,000 plus the 9% surcharge, about 34.9%.

Freelancing in Pakistan

Freelance profit normally goes on the general scale for individuals. On US$100k (PKR 27.7 million) that's PKR 11,555,000 of tax plus the 10% surcharge, about 46% in all.

Most freelancers with clients abroad pay far less. Section 154A covers services rendered outside Pakistan or exported from Pakistan. When the foreign currency arrives, the bank that converts it deducts tax from the proceeds:

• Software, IT and IT-enabled services by an exporter registered with the Pakistan Software Export Board: 0.25%, for tax years up to 2029 (the Finance Act 2026 extended it from 2027).

• Any other exported service: 1% of the proceeds.

The tax is final, so it settles your Pakistani tax on that income, as long as you file your return and any withholding and sales tax returns you're required to file. It only works if the fees come into Pakistan through the banking system. Fees left in an account abroad are taxed on the general scale.

Work for Pakistani clients is taxed on the general scale, with withholding tax deducted by the client (15% for independent professionals on the Active Taxpayers' List).

👉 FBR: Income Tax Ordinance, section 154A and First Schedule Part III Division IVA (export of services)

Crypto, investments and pensions

How is crypto taxed in Pakistan? The Income Tax Ordinance has no crypto rules. Capital gains tax applies to the disposal of a capital asset, which section 37 defines as property of any kind. On our reading, a crypto gain falls under that head and is taxed on the general scale, up to 45% plus the surcharge. The FBR hasn't published guidance confirming this, so check before you sell.

• Dividends: 15% under section 5, as a separate block. Since 2003 the rule has covered dividends from any company, not only Pakistani ones. People not on the Active Taxpayers' List have 30% withheld on Pakistani dividends.

• Bank profit: profit on deposits with Pakistani banks is taxed at 20% (40% withheld if you're not on the list).

• Shares listed in Pakistan: gains on securities bought since 1 July 2024 are taxed at 15% if you're on the list when you buy and sell. A higher rate applies if you're not on the list. Older holdings use lower rates.

• Foreign shares and funds: they aren't "securities" for the 15% rate, which covers Pakistani listed companies, so gains go on the general scale.

• Property in Pakistan: gains on property bought since 1 July 2024 are taxed at 15% for people on the list. For older property the rate falls with the holding period and reaches 0% after a set number of years, which depends on the type of property and when you bought it. On a sale, 2.75% advance tax is collected from the seller and 1.25% from the buyer.

• Pensions: since tax year 2026, a pension from a former employer is taxed at 5% on the part above PKR 10 million a year, as a final tax, plus a 10% surcharge on that tax, and not at all from age 70. A pension not received from a former employer is taxed as income from other sources, on the scale.

Pakistan has no wealth tax. The 1% capital value tax on foreign assets of residents worth over PKR 100 million, charged since 2022, was removed by the Finance Act 2026. We found no inheritance tax. Inherited property in Pakistan now takes its market value at the time of transfer as its cost for capital gains.

👉 FBR: Circular 1 of 2025-26, including the new tax on pensions

👉 FBR: Finance Act 2022, section 8 (capital value tax on foreign assets, now removed)

Filer status and the Active Taxpayers' List

In Pakistan, filing a return does more than settle your tax. It puts you on the FBR's Active Taxpayers' List, and many withholding rates double if you're not on it. Some examples for tax year 2027:

• Pakistani dividends: 15% on the list, 30% off it.

• Bank profit: 20% on the list, 40% off it.

• Selling property: 2.75% on the list, 11.5% off it. Buying property: 1.25% on the list, up to 18.5% off it.

Social security

Pakistan's main pension scheme for private sector staff is run by the Employees' Old-Age Benefits Institution (EOBI). Employers pay 5% and employees 1%, but of the minimum wage, not of actual pay. That makes the employee share a small fixed amount each month, so our ratings treat it as negligible. We found no compulsory scheme for the self-employed.

👉 Employees' Old-Age Benefits Institution: contribution rates

Double tax treaties

Does Pakistan have double tax treaties? Yes, a wide network. The FBR lists 68 bilateral full-scope treaties, including the UK, the US, Canada, the UAE, Saudi Arabia, Qatar, China, Germany, France, Turkey, Malaysia and Singapore. Many have been updated by the OECD multilateral instrument (MLI).

A treaty can decide which country taxes your pension or salary. Where both tax it, Pakistan gives a credit for foreign tax up to the Pakistani tax on the same income.

👉 FBR: bilateral full-scope double tax treaties

The long-stay visa route

Pakistan doesn't have a digital nomad visa. The main options for a longer stay are:

• Visit (tourist) visa: can be extended in Pakistan for three months, to six months in total.

• Business visa: up to five years with multiple entries, for citizens of listed countries. You need an invitation from a registered Pakistani company or a recommendation from a chamber of commerce or the Board of Investment.

• Work visa: for employment with a Pakistani employer.

None of these routes is designed for remote work for a foreign employer, and 183 days in a tax year makes you tax resident.

👉 Pakistan Online Visa System (NADRA): business visa

👉 Directorate General of Immigration and Passports: visa extensions

Who is Pakistan good for?

How does Pakistan compare for different kinds of mover? Ratings are relative to the 150+ countries TaxPilot covers, based on tax year 2027 rules and the all-in cost including compulsory contributions, at PKR 277 to US$1.

☑️ Who is Pakistan good for? Tax ratings for expats in tax year 2027

Filing and deadlines

• Returns: individuals file online through the FBR's IRIS system by 30 September after the tax year ends, so by 30 September 2027 for tax year 2027.

• What you file: a return of income, with a wealth statement and, if you have foreign income or assets, a foreign income and assets statement.

• Employees: your employer deducts tax every month, but you still need to file to get on the Active Taxpayers' List.

If you file late, you can still get onto the Active Taxpayers' List by paying a surcharge. The Finance Act 2026 raised those surcharge amounts.

Frequently asked questions

When do you become tax resident in Pakistan?

You're resident for a tax year (1 July to 30 June) if you spend 183 days or more in Pakistan in that year. Pakistani citizens are also resident unless they spend more than 182 days in another country or are tax resident there. The old 120-day rule was repealed in 2021.

What are the income tax rates in Pakistan for 2026-27?

For tax year 2027, salaried individuals pay 0% up to PKR 600,000, rising through 1%, 11%, 20%, 25%, 29% and 32% to 35% above PKR 7 million. Other individuals pay 0% to 45%, with 45% above PKR 5.6 million, plus a 10% surcharge when taxable income is over PKR 10 million.

How are freelancers taxed in Pakistan?

Profit is normally taxed on the general scale of up to 45%. But if you export services and the fees come into Pakistan through a bank, the bank deducts 1% (0.25% for registered software and IT exporters) as a final tax, provided you file your return.

Does Pakistan tax foreign income?

Residents are taxed on foreign income, with exemptions. Foreign employees resident only because of their job are exempt on foreign income for up to three years unless they bring it into Pakistan. Returning Pakistani citizens are exempt for two tax years, and foreign salary taxed abroad is exempt.

Does Pakistan have a tax treaty with the UK?

Yes. The UK is one of 68 bilateral full-scope treaties listed by the FBR, along with the US, the UAE, Saudi Arabia, China and Germany. A treaty can decide which country taxes your pension or salary.

Where to go next

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