Quick Answer
For Tax Year 2027 (1 July 2026 – 30 June 2027), FBR withholding tax rates in Pakistan range from 0% to 35% depending on the nature of the payment — salary, services, contracts, dividends, property, imports, or exports. Finance Act 2026 cut property purchase WHT from 3% to 1.25% for filers, raised export WHT to a flat 1.25%, and kept the 100% non-filer surcharge under the Tenth Schedule intact. Filers consistently pay half (or less) of what non-filers pay on the same transaction.
Introduction
Every rupee that moves through Pakistan's formal economy — a salary payment, a contractor's invoice, a property sale, an import shipment — almost certainly has a withholding tax obligation attached to it. Getting the rate wrong isn't a small clerical slip; it can mean penalties, disallowed expenses, and FBR notices landing on your desk months later. At Baco Consultants, we work with this rate card daily while handling tax compliance for businesses across Pakistan, so this guide reflects how these rates actually apply in practice, not just how they read in the statute. If you'd rather have someone run the numbers for you, our withholding tax calculator and quarterly withholding statements filing service handle both calculation and FBR submission, and our guide to the Active Taxpayer List (ATL) explains exactly how filer status cuts your withholding bill in half.
This article breaks down every major FBR withholding tax rate for Tax Year 2027, section by section, with filer and non-filer rates side by side, plus what actually changed under Finance Act 2026.
Disclaimer
This guide reflects our reading of publicly available Finance Act 2026 summaries and third-party rate cards as of August 2026. FBR periodically issues clarifying SROs and circulars after the Finance Act is passed. Always confirm the exact rate for your transaction against the official FBR notification or speak with our tax advisory team before filing.
Key Takeaways
- Withholding tax (WHT) is income tax deducted at source under the Income Tax Ordinance, 2001, and deposited with the Federal Board of Revenue (FBR) by the withholding agent.
- Non-filers pay up to 100% more WHT than Active Taxpayer List (ATL) filers under the Tenth Schedule — in most sections, exactly double.
- Property purchase WHT (Section 236K) dropped sharply — from 3% to 1.25% for filers from Tax Year 2027.
- Export proceeds now attract a flat 1.25% Minimum Tax under Section 154, replacing last year's two-part 1%+1% structure.
- A new 5% (filer) / 10% (non-filer) withholding tax applies to social media income for the first time.
- Foreign credit/debit card transactions dropped from 5% to 0.5%, a major relief for businesses paying for SaaS and cloud tools abroad.
- Most WHT is adjustable (advance tax) — it's credited against your annual tax liability — while some categories are Final Tax.
What Is Withholding Tax in Pakistan?
Withholding tax (WHT) is income tax that a payer deducts at the source of a payment and deposits directly with FBR, rather than letting the full amount reach the recipient and relying on them to declare it later. The payer — called the withholding agent — could be an employer, a bank, a company buying services, or a property registrar.
There are three functional types of WHT in Pakistan:
- Final Tax — the deduction is the complete tax liability on that income. Nothing more is owed, and nothing is adjusted on the annual return.
- Advance Tax — the deduction is a credit against your final tax bill. You still file an annual income tax return and either pay the balance or claim a refund.
- Minimum Tax — the deduction is the floor. If your actual tax liability works out higher, you pay the higher figure; if lower, the withheld amount stands.
Knowing which bucket your income falls into matters just as much as knowing the rate — it determines whether you can claim a refund at all.
Filer vs Non-Filer: Why It Changes Everything
Direct answer: Non-filers pay withholding tax at up to double the filer rate on almost every transaction in Pakistan, because the Tenth Schedule to the Income Tax Ordinance imposes a 100% additional levy on anyone not appearing on FBR's Active Taxpayer List.
This single rule is the biggest lever any taxpayer has over their own WHT burden. A services payment taxed at 7% for a filer costs a non-filer 14% on the exact same invoice. Bank profit is 15% for a filer and 30% for a non-filer. Property purchase WHT is 1.25% for a filer — and meaningfully higher for a non-filer under the same schedule.
Filer status isn't automatic — it comes from actually being on FBR's Active Taxpayer List, which requires a filed and verified income tax return for the relevant tax year. Before making any payment above the exemption threshold, withholding agents should verify the payee's ATL status rather than assume it.
What Changed Under Finance Act 2026
Finance Act 2026, passed by the National Assembly in June 2026, adjusted a number of WHT provisions effective 1 July 2026 (Tax Year 2027):
| Provision | Old Rate | New Rate (TY 2027) | Direction |
|---|---|---|---|
| Property purchase (Sec 236K, filer) | 3% | 1.25% | Reduced |
| Property sale (Sec 236C, filer) | 3% | 2.75% | Reduced |
| Export proceeds (Sec 154) | 1% FTR + 1% advance | 1.25% Minimum Tax | Restructured |
| Foreign credit/debit card payments | 5% | 0.5% | Reduced |
| Disposal of debt securities (Sec 151A) | 15% / 30% | 20% / 40% | Increased |
| Terminal & port services (Sec 153) | 15% | 12% | Reduced |
| Social media income | Not applicable | 5% / 10% (new) | New category |
| Salary — high earner surcharge | 9% above Rs 10m | Abolished | Removed |
The salary tax slabs were also restructured, with the old 35% band split into 29% and 32% intermediate slabs, pushing the top 35% rate to income above Rs 7 million instead of Rs 4.1 million.
Businesses with cross-border obligations may also want to review our breakdown of Pakistan corporate tax changes for 2026, since several WHT changes tie directly into corporate compliance timelines.
Salary Withholding Tax – Section 149
Direct answer: Salary WHT for Tax Year 2027 is nil up to Rs 600,000 annually, then rises progressively through eight slabs to 35% on income above Rs 7 million, with the previous 9% high-earner surcharge abolished.
| Annual Taxable Salary | Tax Rate |
|---|---|
| Up to Rs 600,000 | 0% |
| Rs 600,001 – 1,200,000 | 1% of amount exceeding Rs 600,000 |
| Rs 1,200,001 – 2,200,000 | Rs 6,000 + 11% of amount exceeding Rs 1,200,000 |
| Rs 2,200,001 – 3,200,000 | Rs 116,000 + 20% of amount exceeding Rs 2,200,000 |
| Rs 3,200,001 – 4,100,000 | Rs 316,000 + 25% of amount exceeding Rs 3,200,000 |
| Rs 4,100,001 – 5,600,000 | Rs 541,000 + 29% of amount exceeding Rs 4,100,000 |
| Rs 5,600,001 – 7,000,000 | Rs 976,000 + 32% of amount exceeding Rs 5,600,000 |
| Above Rs 7,000,000 | Rs 1,424,000 + 35% of amount exceeding Rs 7,000,000 |
Directorship fees remain withheld at a flat 20%. Employers must apply these slabs from the first payroll run of July 2026 — see our detailed guide on income tax slabs for salaried individuals 2026-27 for worked examples by income bracket.
Common mistake: Payroll teams often forget the tax-free threshold applies annually, not monthly, which throws off mid-year salary revisions and bonus payments if not pro-rated correctly.
Dividend Withholding Tax – Section 150
| Dividend Type | Filer | Non-Filer | Nature |
|---|---|---|---|
| From IPPs / biomass power projects | 7.5% | 15% | Final Tax |
| From companies with carried-forward losses | 25% | 50% | Final Tax |
| Mutual funds — debt (companies) | 29% | 58% | Final Tax |
| Mutual funds — debt (individuals/AOPs) | 25% | 50% | Final Tax |
| Mutual funds — equity | 15% | 30% | Final Tax |
| REITs / other cases | 15% | 30% | Final Tax |
| Dividend in specie | 15% | 30% | Final Tax |
| SPV by REIT scheme | 0% | 0% | Final Tax |
| SPV — other cases | 35% | 70% | Final Tax |
| Intercorporate dividend (group relief) | 0% | 0% | Where conditions met |
Profit on Debt – Section 151
Direct answer: Bank and government-securities profit is generally withheld at 15% for filers and 30% for non-filers when annual profit stays under Rs 5 million, shifting from Final Tax to Advance Tax treatment once profit crosses that threshold.
| Category | Filer | Non-Filer | Nature |
|---|---|---|---|
| Bank profit — companies | 20% | 40% | Advance Tax |
| Bank profit — individuals/AOPs (up to Rs 5m) | 15% | 30% | Final Tax |
| Bank profit — individuals/AOPs (above Rs 5m) | 15% | 30% | Advance Tax |
| Govt securities — individuals (up to Rs 5m) | 15% | 30% | Final Tax |
| Sukuk — companies | 25% | 50% | Advance Tax |
| Sukuk — individuals/AOPs (up to Rs 1m) | 10% | 20% | Final Tax |
| Sukuk — individuals/AOPs (Rs 1m–5m) | 12.5% | 25% | Final Tax |
| Disposal of debt securities (Sec 151A) | 20% | 40% | Advance Tax |
Payments to Non-Residents – Section 152
| Payment Type | Rate | Nature |
|---|---|---|
| Royalty / technical fees / offshore digital services | 15% | Final Tax |
| Money transfer / card network / payment gateway services | 10% | Final Tax |
| IT & IT-enabled services | 4% filer / 8% non-filer | Minimum Tax |
| Construction/assembly/installation contracts | 7% | Final Tax |
| Insurance & re-insurance premium | 5% | Final Tax |
| Foreign-relayed advertisement services | 10% | Final Tax |
| Foreign-produced TV/media commercials | 20% | Final Tax |
| Other payments to non-residents | 20% | Advance Tax |
Supply of Goods – Section 153(1)(a)
| Supply Category | Filer | Non-Filer |
|---|---|---|
| Rice, cotton seed, edible oil | 1.5% | 3% |
| Cigarettes (distributors) | 2.5% | 5% |
| Pharmaceuticals (distributors) | 1% | 2% |
| FMCG/fertiliser/electronics/steel — Tier-1 retailers | 0.25% | 0.5% |
| Textile, leather, surgical, sports goods | 1% | 2% |
| Other supplies — companies (general) | 5% | 10% |
| Other supplies — AOPs/individuals (general) | 5.5% | 11% |
| Gold, silver & articles thereof | 1% | 2% |
No WHT applies under this section where aggregate annual payments to a single supplier stay below Rs 75,000.
Payments for Services – Section 153(1)(b)
Direct answer: Most services — transport, security, software development, hotel, engineering, and similar — carry a 7% withholding tax for filers and 14% for non-filers as Minimum Tax, while IT/ITeS services attract a lower 4%/8%, and unlisted "other services" attract 14%/28%.
| Service Category | Filer | Non-Filer | Nature |
|---|---|---|---|
| Transport, security, hotel, engineering, software development, warehousing, etc. | 7% | 14% | Minimum Tax |
| IT & IT-enabled services | 4% | 8% | Minimum Tax |
| Advertising — electronic/print media | 1.5% | 3% | Minimum Tax |
| Professional services (doctors, lawyers, architects, independent developers) | 15% | 30% | — |
| Other unlisted services | 14% | 28% | Minimum Tax |
| Stitching/dyeing/printing to exporters | 1% | 2% | — |
This section doesn't apply where aggregate annual payments to one service provider are below Rs 30,000. Freelancers and IT exporters have a distinct set of rules worth reviewing separately if platform payments are involved.
Execution of Contracts – Section 153(1)(c)
| Contractor Type | Filer | Non-Filer | Nature |
|---|---|---|---|
| Listed companies | 7.5% | 15% | Advance Tax |
| Other companies | 7.5% | 15% | Advance Tax |
| Individuals/AOPs | 8% | 16% | Minimum Tax |
| Sportspersons | 15% | 30% | — |
Exports – Section 154 & 154A
Direct answer: Export proceeds now attract a single flat 1.25% Minimum Tax under Section 154, replacing the previous 1% Final Tax plus 1% advance-tax structure, while PSEB-registered IT exporters keep their preferential 0.25% Final Tax Regime through June 2029.
| Export Category | Rate | Nature |
|---|---|---|
| General export proceeds (Sec 154) | 1.25% | Minimum Tax |
| Inland back-to-back LC goods | 1.25% | Minimum Tax |
| EPZ exports | 1.25% | Minimum Tax |
| Indirect exporters (DTRE/EFS) | 1.25% | Minimum Tax |
| PSEB-registered IT/ITeS exports (Sec 154A) | 0.25% | Final Tax |
| Non-PSEB services exported from Pakistan | 1% | Advance Tax |
| Royalty/commission from foreign IP use | 1% | Advance Tax |
Rent of Immovable Property – Section 155
| Recipient | Rate |
|---|---|
| Companies | 15% (Advance Tax) |
| Individuals/AOPs — up to Rs 300,000/year | Nil |
| Individuals/AOPs — Rs 300,001–600,000 | 5% of amount exceeding Rs 300,000 |
| Individuals/AOPs — Rs 600,001–2,000,000 | Rs 15,000 + 10% of amount exceeding Rs 600,000 |
| Individuals/AOPs — above Rs 2,000,000 | Rs 155,000 + 25% of amount exceeding Rs 2,000,000 |
Property Purchase & Sale – Sections 236C & 236K
Direct answer: Property buyers now pay just 1.25% withholding tax (down from 3%) and sellers pay 2.75% (down from 3%) for Tax Year 2027, a deliberate Finance Act 2026 move to stimulate the real estate and construction sector — filers only; non-filer rates remain materially higher under the Tenth Schedule.
| Transaction | Filer Rate (TY 2027) | Nature |
|---|---|---|
| Purchase of property (Sec 236K) | 1.25% (was 3%) | Advance Tax |
| Sale/transfer of property (Sec 236C) | 2.75% (was 3%) | Advance Tax |
| Overseas Pakistanis via FCVA/NRVA | 0% (conditions apply) | — |
Real estate businesses and property investors should pair this with our guide on private limited company registration if holding property through a corporate structure, which can materially change the applicable rate and compliance path.
Imports – Section 148
| Import Category | Filer | Non-Filer |
|---|---|---|
| 12th Schedule Part I (general) | 1% | 2% |
| 12th Schedule Part II — commercial importers | 3.5% | 7% |
| 12th Schedule Part II — others | 2% | 4% |
| 12th Schedule Part III — commercial importers | 6% | 12% |
| 12th Schedule Part III — others | 5.5% | 11% |
| SRO 1125(I)/2011 — manufacturers | 1% | 2% |
| Locally unavailable medicines (DRAP certified) | 4% | 8% |
| CKD kits — electric vehicles | 1% | 2% |
Commission & Brokerage – Section 233
| Category | Filer | Non-Filer |
|---|---|---|
| Advertising agents | 10% | 20% |
| Life insurance/commission agents (income below Rs 500,000/year) | 8% | 16% |
| Other commission agents | 12% | 24% |
Cash Withdrawal, Electricity, Telephone & Internet
Cash Withdrawal — Section 231AB: No withholding tax applies to filers on cash withdrawals. Non-filers pay 0.8% Advance Tax on withdrawals exceeding Rs 50,000 in a day.
Electricity — Section 235: Domestic bills up to Rs 25,000/month are exempt; above that, 7.5% Advance Tax applies. Commercial bills above Rs 20,000/month are taxed at Rs 1,950 plus 12%, industrial bills at Rs 1,950 plus 5%.
Telephone & Internet — Section 236: Landline bills above Rs 1,000 attract 10% Advance Tax. Mobile and internet subscriptions are taxed at 15% for filers — and a steep 75% for non-filers, making ATL status especially valuable here.
Other WHT Categories
| Category | Filer | Non-Filer | Nature |
|---|---|---|---|
| Prize bonds / crossword prizes | 15% | 30% | Final Tax |
| Raffle/lottery/quiz prizes | 20% | 40% | Final Tax |
| Petrol pump commission (Sec 156A) | 12% | 24% | Final Tax |
| Auction of property/goods (Sec 236A) | 10% | 20% | Advance Tax |
| Foreign credit/debit card payments | 0.5% (was 5%) | — | — |
| Social media income (new) | 5% | 10% | — |
| E-commerce — digital payment | 1% | 2% | Final Tax |
| E-commerce — cash on delivery | 2% | 4% | Final Tax |
E-commerce sellers on marketplaces and social platforms should treat these as compliance-critical — Amazon and Shopify sellers in particular are increasingly on FBR's radar as digital transactions become traceable through payment processors.
Common Mistakes Businesses Make
- Applying last year's rates. Payroll and AP teams often forget to update rate tables on 1 July, especially for salary slabs and property transactions where Finance Act 2026 changed figures materially.
- Skipping ATL verification. Assuming a long-term vendor is still a filer without checking current status before every payment cycle.
- Confusing Final Tax with Advance Tax. This affects whether the recipient can claim a refund — treating a Final Tax deduction as adjustable (or vice versa) causes return-filing errors.
- Missing the minimum threshold exemptions. Sections 153(1)(a) and (b) don't apply below Rs 75,000 and Rs 30,000 respectively — many agents withhold anyway, or worse, forget entirely once thresholds are crossed.
- Late deposit of withheld tax. Missing the 15th-of-the-month deadline triggers penalties and, in serious cases, personal liability exposure for company officers.
Expert Tips for Withholding Agents
- Automate ATL checks. Build ATL verification into your vendor onboarding and payment approval workflow rather than checking it manually and irregularly.
- Reconcile monthly, not annually. Filing monthly withholding statements consistently avoids the scramble — and the errors — that come with reconstructing a year of transactions at once.
- Separate Final Tax income on your books. This makes annual return preparation faster and reduces disputes over what's refundable.
- Revisit contracts affected by rate cuts. If you're a property buyer or exporter, the 2026-27 rate reductions directly change your cash flow — update budgets and client-facing quotes accordingly.
- Get a second opinion on ambiguous categories. "Other services" versus a specifically listed service category can mean a 7-percentage-point rate difference — when in doubt, get tax advisory input before, not after, the payment.
Why Choose Baco Consultants for FBR Withholding Tax Rates 2026-27?
Understanding the latest FBR Withholding Tax Rates 2026-27 can be challenging because rates may vary according to the type of payment, taxpayer status, and applicable tax provisions. Baco Consultants helps individuals, businesses, and organizations understand the latest WHT requirements and apply the correct rates with greater confidence. Our tax professionals can assist with withholding tax calculations, compliance, documentation, and FBR-related matters. We focus on practical guidance so you can reduce errors and avoid unnecessary tax compliance issues. Whether you need help with salary, services, contracts, rent, commissions, or other withholding tax categories, our team can guide you through the relevant requirements. For businesses in Islamabad, Rawalpindi, and across Pakistan, Baco Consultants provides professional tax advisory support tailored to your needs. Check the latest FBR rate requirements and consult Baco Consultants for reliable withholding tax guidance.
Frequently Asked Questions
What is the FBR withholding tax rate on services for 2026-27? Most listed services are withheld at 7% for filers and 14% for non-filers as Minimum Tax. IT and IT-enabled services get a lower 4%/8% rate, while unlisted "other services" attract 14%/28%.
What is the withholding tax on property purchase after Finance Act 2026? Buyers pay 1.25% (Section 236K), down from 3% previously, for filers. Sellers pay 2.75% (Section 236C), down from 3%. Non-filers pay a higher rate under the Tenth Schedule.
Do non-filers really pay double the withholding tax? In most sections, yes. The Tenth Schedule imposes a 100% additional levy on non-filers, so a 15% filer rate typically becomes 30% for a non-filer on the same transaction.
What's the difference between Final Tax, Advance Tax, and Minimum Tax? Final Tax closes the matter — no further liability or refund on that income. Advance Tax is a credit against your annual liability, adjustable when you file your return. Minimum Tax is a floor — you pay the higher of the withheld amount or your actual computed liability.
What is the withholding tax on export proceeds for Tax Year 2027? A flat 1.25% Minimum Tax under Section 154, replacing last year's 1% Final Tax plus 1% Advance Tax structure. PSEB-registered IT exporters retain the 0.25% Final Tax Regime through June 2029.
Is there withholding tax on cash withdrawals for filers? No. Filers pay 0% on cash withdrawals under Section 231AB. Non-filers pay 0.8% on withdrawals exceeding Rs 50,000.
How do I check if I'm on the Active Taxpayer List? You can verify ATL status directly on FBR's portal, or follow our step-by-step guide on how to check Active Taxpayer List status in Pakistan.
Is withholding tax on salary the same as income tax? Salary WHT under Section 149 is essentially income tax collected in advance, month by month, using the same annual slabs applied to your total taxable salary. It's reconciled — not duplicated — when you file your annual return.
Has the salary tax surcharge for high earners been removed? Yes. The 9% surcharge that applied to salaried individuals earning above Rs 10 million annually has been abolished from Tax Year 2027.
Where can I get the official withholding tax rate card from FBR? FBR publishes an updated rate card directly on its website at fbr.gov.pk, which should be treated as the authoritative source over any third-party summary, including this one.
Conclusion
Withholding tax touches nearly every transaction a Pakistani business or individual makes — salary, services, rent, property, imports, exports, even social media income now. Finance Act 2026 brought welcome relief on property and export rates, tightened treatment of debt securities, and introduced entirely new categories like social media withholding. The one constant across every section is this: filer status on the Active Taxpayer List consistently cuts your withholding burden by half or more, making it the single highest-leverage compliance step available to any taxpayer.
Getting these rates right — and staying current as FBR issues further clarifications through the year — isn't something most businesses have the bandwidth to track section by section on their own. That's exactly where a dedicated tax advisory partner earns its keep, from calculating the correct rate on a specific invoice to filing monthly statements and defending a client during an FBR notice.
If you want this handled correctly the first time, explore what Baco Consultants offers across tax compliance, company registration, and corporate advisory, or go ahead and Book a Seat at Baco Consultants to get your withholding tax position reviewed by our team.
Related Guides
- Income Tax Slabs for Salaried Individuals Pakistan 2026-27
- Pakistan Corporate Tax 2026: Rates, Filing & Compliance
- How to Check Active Taxpayer List (ATL) Status in Pakistan 2026
- Top 10 Tax Changes in Pakistan Budget 2026-27
- How to Pay Income Tax Online in Pakistan 2026: Step-by-Step
- Income Tax Rates in Pakistan for Individuals 2026: Complete Guide
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