How freelancers are taxed in Pakistan
Income from exporting computer software, IT and IT-enabled services — which covers most online freelancing — can be taxed under a final tax regime on the foreign remittance (section 154A of the Income Tax Ordinance). For tax year 2026-27 the rates are:
| Status | Final tax on remittances |
|---|---|
| Registered with and certified by PSEB | 0.25% |
| Not registered with PSEB | 1% |
The tax is usually deducted by your bank when the remittance arrives through proper banking channels, and the 0.25% rate is set to apply for tax years 2026 to 2029.
Tax = annual remittances in PKR × 0.25% (PSEB) or 1% (not registered)
Conditions for the low rate
- File your income tax return and stay on the Active Taxpayers List (ATL).
- File withholding statements, if they apply to you.
- Bring the money in through banking channels and keep the bank's Proof of Remittance Certificate (PRC) for each transfer.
- Don't claim a credit for foreign taxes paid on the same income.
If the conditions aren't met, the final-tax treatment doesn't apply and the income can be taxed at normal individual slab rates, which are much higher. Filing your return on time is the biggest saving available.
Example
$12,000 a year at Rs 277 is Rs 33,24,000. At 0.25% the tax is Rs 8,310 for the year — about Rs 693 a month. Without PSEB registration, at 1%, it's Rs 33,240.
See what reaches your account before tax with the Payoneer to PKR calculator.
Frequently asked questions
How much tax do freelancers pay in Pakistan?
For IT and IT-enabled service exports, a final tax of 0.25% on foreign remittances if you're registered with PSEB, or 1% if you're not — provided you file your return and meet the conditions.
How do I register with PSEB as a freelancer?
Through the Pakistan Software Export Board's online registration for freelancers. Registration is renewed periodically; check pseb.org.pk for the current process and fee.
What if I'm not a filer?
The reduced final-tax regime requires a filed return. Non-filers can lose the concession and be taxed at normal rates, so filing is the first thing to do.
Is the tax deducted automatically?
Usually your bank deducts it when the remittance is received through banking channels. Keep each Proof of Remittance Certificate for your return.
Is this tax advice?
No. It's an estimate based on published rates. Rules change with each budget — confirm with FBR or a tax adviser.
TakehomeKit is independent and not affiliated with Fiverr, Upwork, Payoneer, Wise or any other company mentioned. Fees, limits and tax rules change; we check them regularly, but always confirm the final number with the platform or an adviser before you rely on it.