Freelancer Tax Calculator
Estimate the tax your bank deducts on foreign earnings — Section 154A final tax on exported IT/ITeS and other services (with the PSEB reduced rate), or the new Section 154B minimum tax on social media and content monetisation that took effect on 1 July 2026.
Final tax under Section 154A — per month
Income after tax
Rs 3,564,000
Monthly after tax
Rs 297,000
Register with PSEB to save Rs 27,000/year
Your rate would drop from 1.00% to 0.25%.
Breakdown
How it works
Both regimes are collected by your bank when foreign earnings arrive through official banking channels — the difference is which section applies.
Section 154A — export of services (final tax):
- IT / ITeS, PSEB-registered filer: 0.25%
- IT / ITeS, non-PSEB filer: 1%
- Other exported services: 1% (no PSEB tier)
- Non-filers: the rate is not doubled — Tenth Schedule rule 10(ca) excludes §154A from the non-filer uplift. But under §154A(2) the deduction is final only once your return has been filed; otherwise it is adjustable.
Section 154B — revenues from social media platforms (minimum tax): inserted by the Finance Act 2026, effective 1 July 2026 (Tax Year 2027).
- Resident on the ATL: 5%
- Not on the ATL: 10%
- Deducted by every banking and non-banking financial institution at the time of credit or receipt — including through payment service providers.
- Minimum tax for residents; final tax for non-residents with no permanent establishment in Pakistan.
There is no exemption threshold in the enacted Act. The Rs 600,000 exemption widely quoted online came from a non-binding Senate Standing Committee recommendation that did not make it into the final law.
Official sources
Frequently asked questions
What tax do freelancers pay in Pakistan?
Freelancers exporting IT/ITeS services pay a final tax under Section 154A: 0.25% if registered with PSEB, otherwise 1%. Other exported services pay 1%. The rate is the same whether or not you are on the Active Taxpayers List.
What is the new 5% tax on YouTube and social media income?
The Finance Act 2026 inserted Section 154B into the Income Tax Ordinance 2001, effective 1 July 2026 (Tax Year 2027). Banks and non-banking financial institutions deduct 5% from revenues received from social media platforms — 10% if you are not on the Active Taxpayers List. It covers anyone earning from creating, publishing or monetising content on YouTube, Facebook, Instagram, TikTok or similar platforms.
Is the 154B social media tax final or minimum?
For residents it is minimum tax — credited against your annual liability, but non-refundable if your actual computed tax works out lower. For non-residents with no permanent establishment in Pakistan it is final tax.
Did the freelancer rate go up from 1% to 10%?
No. Section 154A was not changed — the 0.25% PSEB rate was in fact extended to Tax Year 2029. Section 154B is a separate new charge on social media revenue at 5% (10% for non-filers). Two different sections, not a rate increase.
Does 154B apply to AdSense or AdMob earnings from my app or website?
This is unsettled. Section 154B names social media platforms and defines the taxpayer as a content creator or influencer, so ad revenue from a standalone app, game or website is arguably an IT/ITeS export under Section 154A instead. In practice banks have been applying 154B based on the remitter, and FBR has not yet issued the implementation rules the Act allows for. Ask your bank which section it applied.
How does PSEB registration reduce my tax?
For IT/ITeS exporters, PSEB registration lowers the Section 154A rate from 1% to 0.25% — a 4× reduction. The calculator shows exactly how much you would save.
Is this a final tax?
Yes. Section 154A on exported services is a final tax collected on your foreign remittances through your bank, provided proceeds come through official banking channels.
Do non-filers pay double on exported services?
Not under Section 154A. Rule 10(ca) of the Tenth Schedule expressly excludes tax collected or deducted under Section 154A from the Schedule, so the 100% non-filer uplift in rule 1 does not reach it — and Division IVA of Part III of the First Schedule states flat rates of 0.25% and 1%. Filing still matters, though: under Section 154A(2) the deduction is final only once your return has been filed. Section 154B is different — it is not excluded, so social media revenue does go from 5% to 10% for non-filers.
Estimate for people receiving foreign proceeds through banking channels. Actual withholding depends on your bank, your filer status and which section your bank applies. FBR has not yet issued Section 154B implementation rules. Confirm with FBR or a tax advisor.