💻 Freelancer & IT Export Tax

Freelancer & IT Export Tax Calculator Pakistan 2025-26

IT and ITeS export income in Pakistan is subject to a final withholding tax — deducted by your bank at the time of remittance. The rate is 0.25% for PSEB-registered exporters or 1% for unregistered. At least 80% of proceeds must come through banking channels. Enter your income below to see your total tax, savings vs normal FBR rates, and how PSEB registration affects your bill.

Your Income

Enter your foreign and local earnings

Foreign Income — Enter As
Monthly USD
Annual PKR
$
Rs
Rs

Income from Pakistani clients (taxed at normal FBR business slabs)

PSEB Registration Status
Not Registered (1%)
Registered (0.25%)

PSEB registration reduces export WHT from 1% → 0.25%.

Quick Presets (USD/month)
Annual IT Export Income
Rs 0
Foreign remittances via banking
Export WHT (Final Tax)
Rs 0
@ 1% — deducted by bank
Local Income Tax
Rs 0
FBR slabs on PKR income
Total Annual Tax
Rs 0
WHT + local income tax
💰 Saving vs Normal FBR Business Rate Rs 0
Normal FBR tax: Rs 0 IT export rate: Rs 0
⭐ PSEB Saves You An Additional
Rs 0
vs paying 1% without PSEB registration
Tax Summary
IT export income (annual) —
Export WHT @ 1% (final) —
Pakistan-source income —
Tax on local income (FBR slabs) —
Total annual tax —
Effective Tax Rate
0.0%
Normal FBR Rate
0.0%
📋 Conditions to qualify:
  • At least 80% of export proceeds must be repatriated via official banking channels
  • Income must be from IT / ITeS (IT-enabled services) exports
  • PSEB registration required to claim the 0.25% rate
  • File an annual FBR tax return even if export is your only income

How Pakistan's IT Export Tax Works

📊
The Two Rates

IT export income is taxed at a final withholding rate — either 1% for unregistered exporters or 0.25% for PSEB-registered exporters. Both rates apply to gross export proceeds received via banking channels.

🏦
Final Tax — Collected at Source

Your bank deducts this WHT automatically when the foreign remittance arrives. It is a final tax discharge — no further income tax is owed on the export income. The export proceeds do not enter the normal FBR slab calculation.

🏢
Why Register with PSEB?

PSEB (Pakistan Software Export Board) registration reduces your export WHT from 1% to 0.25% — a 75% reduction. Registration is free and available to individual freelancers and IT companies. Visit pseb.org.pk to apply.

🔁
The 80% Repatriation Rule

At least 80% of your export proceeds must be repatriated to Pakistan through official banking channels to qualify for the reduced rates. Income kept abroad or sent via informal routes does not qualify.

Frequently Asked Questions

What is the withholding tax rate on IT export income?
+
IT export income is taxed at a final withholding rate of 1% for exporters not registered with PSEB, or 0.25% for PSEB-registered exporters. Your bank deducts this automatically when the foreign remittance arrives — it is the complete tax obligation on that export income.
Is this WHT a final tax or can it be adjusted?
+
The 0.25% / 1% WHT on IT export proceeds is treated as a final tax discharge. No additional income tax is owed on the export income, and you do not include it in the normal FBR progressive slab calculation. You still need to file an annual return and declare this income as subject to final tax.
What is the 80% repatriation condition?
+
At least 80% of your export proceeds must be repatriated to Pakistan in foreign exchange through official banking channels — commercial banks, Roshan Digital Accounts, etc. Income kept abroad or transferred via informal channels does not qualify for the reduced WHT rates.
Does PSEB registration help? How do I register?
+
Yes — PSEB registration cuts your export WHT from 1% to 0.25%, saving 75% of your export tax. Individual freelancers can register at pseb.org.pk by submitting proof of IT export services. Registration is free. Once registered, inform your bank of your PSEB status so the correct rate is applied to remittances.
What about income from local Pakistani clients?
+
Income from Pakistani clients paid in PKR is not IT export income and does not qualify for the WHT rate. It is taxed as normal business income at FBR's non-salaried individual progressive slabs. Use the Pakistan-source income field above to include local earnings and see your combined tax picture.