Withholding Tax Rates Pakistan 2026-27: Section 153 Card

Quick answer: Withholding tax rates Pakistan for tax year 2027 (1 July 2026 to 30 June 2027) come from FBR's rate card updated for the Finance Act 2026. Under section 153, filers pay 5% to 5.5% on goods, 4% on IT services, 7% on certain services, 15% for independent professionals and 14% on other services. Non-filers generally pay double.

If you sell goods or services to companies, government bodies or larger businesses in Pakistan, your client usually deducts income tax before paying you. The rate depends on what you supply, whether you are a company, and whether you are on the Active Taxpayer List. This guide pulls together the withholding tax rates Pakistan businesses meet most often, explains the filer vs non-filer gap, and shows how deductions affect what actually lands in your bank account.

Important: This is general information, not tax advice. Figures below are taken from FBR's Withholding Tax Rate Card for tax year 2027, which FBR itself describes as a facilitation document. The Income Tax Ordinance, 2001 is the law. Check the current card and, for anything significant, a qualified tax practitioner.

What is the WHT card 2026-27?

Every year after the budget, FBR's Directorate General of Withholding Taxes publishes a rate card that summarises who must deduct or collect tax, at what rate, and under which section. The WHT card 2026-27 is labelled "Tax Year 2027" because Pakistan names tax years by the year in which they end. It is updated to 30 June 2026 to reflect the Finance Act 2026, and it is available as a PDF and as an Excel file on the FBR website.

The card has separate columns for ATL rates and Non-ATL rates. ATL means the person appears on FBR's Active Taxpayer List, which is what people mean by "filer". If you are not sure of your status, our guide to the Active Taxpayer List in Pakistan shows how to check it by SMS or online.

For the wider budget changes behind this card, including e-invoicing and penalties, see our summary of the Finance Act 2026 sales tax changes.

Section 153 services rates and goods rates for tax year 2027

Section 153 covers payments for goods, services and contracts. It is the section most suppliers, freelancers working with local companies, and small agencies deal with. The table below reproduces the main rows from FBR's tax year 2027 card.

Section 153 category	ATL (filer) rate	Non-ATL rate
Goods: rice, cotton seed, edible oils	1.5%	3%
Goods: companies, other than toll manufacturing	5%	10%
Goods: individuals and AOPs, other than toll manufacturing	5.5%	11%
Toll manufacturing: companies / others	9% / 11%	18% / 22%
Services: certain listed services	7%	14%
Services: IT and IT-enabled services (as defined in section 2)	4%	8%
Services: independent professionals (doctors, lawyers, architects, accountants, software engineers or developers working independently)	15%	30%
Services: advertising paid to electronic and print media	1.5%	3%
Services: terminal and port operating companies	12%	24%
Services: all other services not listed above	14%	28%
Contracts: sportspersons	15%	30%
Contracts: companies / any other case	7.5% / 8%	15% / 16%
Section 153(2): certain services to exporters or export houses	1%	2%
Section 153(2A): digitally ordered goods or services paid through a payment intermediary	1%	2%
Section 153(2A): cash on delivery collected by a courier	2%	4%

The "certain services" row covers a list in the First Schedule, which in recent years has included services such as transport, freight forwarding, courier, manpower outsourcing, security guards, car rental, building maintenance and travel and tour services. The list changes, so check the current Schedule before assuming your service is on it. Anything not on any list falls into the 14% "other services" bucket, which is why the classification matters so much.

Filer vs non-filer: what the doubling means in practice

Almost every section 153 row on the card has a non-ATL rate exactly twice the ATL rate. The difference is not a penalty you pay later; it is cash your client keeps back from every payment.

Worked example: one invoice, two outcomes

Ayesha runs a small IT consultancy as a sole proprietor and invoices a Lahore company PKR 500,000 for software development.

• If her work is accepted as IT services and she is on the ATL, the client deducts 4%: PKR 20,000. She receives PKR 480,000.
• If the client treats her as an independent professional (software developer working independently), the deduction is 15%: PKR 75,000. She receives PKR 425,000.
• If she is off the ATL and classed as an independent professional, the rate is 30%: PKR 150,000. She receives only PKR 350,000.

Same invoice, same work, and a PKR 130,000 swing between the best and worst case. The tax withheld is usually credited against her annual liability, but if more is held back than she owes, she may wait a long time for a refund, or not get one if the deduction is treated as minimum tax.

Two practical lessons follow. First, file your return on time so you stay on the ATL; our income tax slabs for 2026-27 guide shows what your actual liability might be. Second, agree the withholding category with the client before the first invoice, not after the payment is short.

Other withholding tax rates Pakistan businesses meet often

Section 153 is not the only provision. These rows from the same tax year 2027 card often affect small businesses and freelancers.

Section and payment	ATL rate	Non-ATL rate
154A: export of computer software, IT or IT-enabled services by PSEB-registered persons	0.25%	Not listed separately
154A: other export of services	1%	Not listed separately
154: export proceeds of goods	1.25%	Not listed separately
154B: revenue from social media platforms to content creators	5%	10%
155: rent paid to a company	15%	30%
233: brokerage and commission (general case)	12%	24%
233: advertising agents	10%	20%
236Y: amounts remitted abroad by credit, debit or prepaid card	0.5%	1%

Rent paid to individuals and AOPs under section 155 uses a slab system instead of a flat rate: nil up to PKR 300,000 of annual rent, then rising bands up to 25% on the portion above PKR 2 million. Freelancers paid from abroad should also read our guide on receiving payments from abroad in Pakistan, because export proceeds are handled under different rules from local section 153 payments.

How section 153 deduction works, step by step

1. You issue an invoice for the full price, plus any sales tax you are registered to charge.
2. The client decides the category (goods, a type of service, or contract) and checks your ATL status on the date of payment.
3. The client deducts tax at the card rate, usually on the gross amount payable, and pays you the net.
4. The client deposits the tax with FBR using a payment slip ID generated in IRIS. Our guide on how to pay an FBR challan with a PSID walks through that process.
5. The client files a withholding statement showing your NTN or CNIC and the amount deducted.
6. You claim the credit in your annual return, using the client's certificate or the deduction shown against your registration in IRIS.

Who counts as a withholding agent?

Not every buyer deducts tax. Section 153 applies to payments by "prescribed persons", a defined list that broadly covers federal and provincial government bodies, local authorities, companies, many associations of persons and certain larger individuals and AOPs named in the Ordinance. If you sell to a corner shop or an individual consumer, nothing is usually withheld. If you sell to a private limited company, a bank or a government department, expect a deduction on almost every payment.

The deduction is made at the time of payment, not when the invoice is issued. So if a client pays a December invoice in February, the February rate and your February ATL status are what usually count. That timing matters around 1 July, when a new card takes effect, and around 1 March, when FBR publishes a fresh Active Taxpayer List.

If you do not yet have an NTN, the deduction may not be matched to you at all. Our NTN registration guide explains how to register in IRIS.

How withholding interacts with your invoice

Withholding is deducted at payment, so it does not usually appear as a charge on the invoice. What changes is the cash you receive, and that creates a reconciliation job. A good invoice makes that job easy.

• Show your NTN and, if registered, STRN so the client can record the deduction correctly. Our sales tax invoice guide for Pakistan lists the required fields.
• State the full amount due, then note the expected deduction in the terms, for example: "Income tax will be withheld under section 153(1)(b) at the applicable ATL rate."
• Record the short payment as tax withheld, not as an unpaid balance, once you have the certificate.
• Keep a PO number on the invoice so the client's accounts team can match it quickly.

Our Pakistan invoice generator has a locale preset for Pakistan, a PO number field, notes and terms, and amount paid and balance due fields, so you can show the gross amount and record what the client actually paid. It does not calculate withholding tax, file anything with FBR or track payments, so keep the certificate and your ledger alongside the PDF. For a broader explanation of how deductions show up on invoices in different countries, see withholding tax on invoices.

Common mistakes with withholding tax rates Pakistan suppliers make

• Using last year's card. Rates and categories change with each Finance Act. Use the tax year 2027 card for payments made from 1 July 2026.
• Assuming everything is "services at 14%". IT and IT-enabled services have their own 4% row, and some services are on the 7% list. A short email explaining your service can save you 10 percentage points.
• Dropping off the ATL mid-year. Your status on the payment date usually decides the rate. Late filing can cost you double withholding on every payment until you are restored.
• Not collecting certificates. Without evidence, you may struggle to claim the credit in your return.
• Ignoring provincial sales tax withholding. Provinces have their own sales tax on services and their own withholding rules. These are separate from federal income tax withholding.
• Forgetting the exemption route. If deductions consistently exceed your liability, ask a practitioner about a section 159 exemption or reduced-rate certificate.

Withholding tax rates Pakistan: checklist for 2026-27

1. Download the tax year 2027 card from FBR and save the date you checked it.
2. Confirm your own ATL status and diarise your return deadline.
3. Agree the section 153 category with each regular client in writing.
4. Put your NTN, STRN (if any) and a clear withholding note on every invoice.
5. Collect withholding certificates monthly and reconcile them to your receipts.
6. Review the year's deductions before filing your return to claim every credit.

More guides on Pakistani tax and invoicing are in our tax compliance category, including the freelancer tax guide for Pakistan.

Conclusion

For most suppliers, the withholding tax rates Pakistan applies in 2026-27 come down to three questions: what are you selling, are you a company, and are you a filer. Get those right, agree them with your client, and the deduction becomes a predictable credit instead of a surprise. When you are ready to bill, create a clean invoice with your NTN and withholding note in our free invoice generator for Pakistan, and confirm anything unusual with a qualified tax practitioner.