Finance Act 2026 · Effective 1 July 2026
Tax Year 2027 Pakistan: WHT Rate Card TY 2027 Following Finance Act 2026
Published 1 July 2026
The Finance Act 2026 has been enacted and governs withholding tax for Tax Year 2027. This briefing summarises the principal amendments, presents the revised rate tables, and sets out the practical implications for withholding agents and taxpayers.
Launch Pakistan WHT CalculatorExecutive Summary
The Finance Act 2026 (Act No. XLIII of 2026) received presidential assent on 26 June 2026 and took effect on 1 July 2026. It governs withholding tax for Tax Year 2027, the income year ending 30 June 2027.
The Act restructures several high-volume withholding regimes. Salary withholding under Section 149 moves to an eight-slab table with the high-earner surcharge abolished. Property withholding under Sections 236C and 236K is simplified to flat filer rates of 2.75% on sale and 1.25% on purchase. The services withholding structure under Section 153(1)(b) is recalibrated, the Section 154 export minimum tax rises to 1.25%, and two new withholding sections take effect: Section 151B on life insurance and takaful payouts, and Section 154B on social media platform revenue.
Withholding agents must apply the revised rates to all payments made on or after 1 July 2026. Deduction at superseded rates exposes the agent to recovery of the shortfall together with default surcharge. The Pakistan Withholding Tax Calculator applies the enacted Tax Year 2027 rates across all covered sections.
Major Withholding Tax Changes under Finance Act 2026
The table below summarises the principal withholding amendments between Tax Year 2026 and Tax Year 2027.
Salary slabs (Section 149)
Tax Year 2026
Six slabs, top threshold Rs. 4.1 million, 9% high-earner surcharge
Tax Year 2027
Eight slabs up to Rs. 7 million at 35%. Surcharge no longer payable
Property sale (Section 236C)
Tax Year 2026
Nine rates: three FMV bands across three filer tiers (4.5% to 11.5%)
Tax Year 2027
Single flat 2.75% filer rate on gross consideration; 11.5% for non-filers
Property purchase (Section 236K)
Tax Year 2026
Nine rates: three FMV bands across three filer tiers (1.5% to 18.5%)
Tax Year 2027
Flat 1.25% filer rate on fair market value; non-filer rates remain FMV-banded
Services (Section 153(1)(b))
Tax Year 2026
Specified services 6%, residual services 15%
Tax Year 2027
Specified services 7%; new tiers for independent professionals (15%) and terminal and port operators (12%); residual services 14%
Export of goods (Section 154)
Tax Year 2026
1% minimum tax
Tax Year 2027
1.25% minimum tax
Life insurance payouts (Section 151B)
Tax Year 2026
No dedicated withholding section
Tax Year 2027
New section: 15% or 10% depending on policy age, applied to payout less premiums, as final tax. Exempt after four years or on death or disability
Social media revenue (Section 154B)
Tax Year 2026
No dedicated withholding section
Tax Year 2027
New section: flat 5% on amounts received from social media platforms
IT export regime (Section 154A)
Tax Year 2026
Concessionary 0.25% regime expiring Tax Year 2026
Tax Year 2027
Regime extended through Tax Year 2028-29
| Area | Tax Year 2026 | Tax Year 2027 |
|---|---|---|
| Salary slabs (Section 149) | Six slabs, top threshold Rs. 4.1 million, 9% high-earner surcharge | Eight slabs up to Rs. 7 million at 35%. Surcharge no longer payable |
| Property sale (Section 236C) | Nine rates: three FMV bands across three filer tiers (4.5% to 11.5%) | Single flat 2.75% filer rate on gross consideration; 11.5% for non-filers |
| Property purchase (Section 236K) | Nine rates: three FMV bands across three filer tiers (1.5% to 18.5%) | Flat 1.25% filer rate on fair market value; non-filer rates remain FMV-banded |
| Services (Section 153(1)(b)) | Specified services 6%, residual services 15% | Specified services 7%; new tiers for independent professionals (15%) and terminal and port operators (12%); residual services 14% |
| Export of goods (Section 154) | 1% minimum tax | 1.25% minimum tax |
| Life insurance payouts (Section 151B) | No dedicated withholding section | New section: 15% or 10% depending on policy age, applied to payout less premiums, as final tax. Exempt after four years or on death or disability |
| Social media revenue (Section 154B) | No dedicated withholding section | New section: flat 5% on amounts received from social media platforms |
| IT export regime (Section 154A) | Concessionary 0.25% regime expiring Tax Year 2026 | Regime extended through Tax Year 2028-29 |
Significant Changes by Section
Salary (Section 149)
The Finance Act 2026 replaces the six-slab salary table with an eight-slab structure and abolishes the high-earner surcharge. Employers must apply the revised slabs to estimated annual taxable salary, including bonus and allowances, from the July 2026 payroll onwards. Directors' board meeting fees are taxed separately at a flat 20% under Section 149(3). Pensions exceeding Rs. 10 million paid to recipients below the age of 70 attract 5% on the excess under Section 149(1A).
| Annual Taxable Income | Rate on Exceeding Amount | Fixed Tax |
|---|---|---|
| Up to Rs. 600,000 | Nil | Nil |
| Rs. 600,001 to 1,200,000 | 1% | Nil |
| Rs. 1,200,001 to 2,200,000 | 11% | Rs. 6,000 |
| Rs. 2,200,001 to 3,200,000 | 20% | Rs. 116,000 |
| Rs. 3,200,001 to 4,100,000 | 25% | Rs. 316,000 |
| Rs. 4,100,001 to 5,600,000 | 29% | Rs. 541,000 |
| Rs. 5,600,001 to 7,000,000 | 32% | Rs. 976,000 |
| Above Rs. 7,000,000 | 35% | Rs. 1,424,000 |
Services and Contracts (Section 153)
The services withholding structure under Section 153(1)(b) is recalibrated. The specified-services rate rises from 6% to 7%. Independent professionals, including doctors, lawyers, architects, accountants and software engineers working independently, are assigned a dedicated 15% tier. Terminal and port operating services are set at 12%, and the residual services rate moves from 15% to 14%. IT and IT-enabled services retain the concessionary 4% rate. Contract execution rates under Section 153(1)(c) are unchanged at 7.5% for companies and 8% for individuals and AOPs.
Exports and IT (Sections 154 and 154A)
The Section 154 minimum tax on export realization rises from 1% to 1.25%. The Section 154A concessionary regime for the export of services is extended through Tax Year 2028-29, retaining the 0.25% rate for PSEB-registered IT and IT-enabled service exporters and 1% for other exported services. Both export regimes apply a single rate without a filer distinction.
Property Transactions (Sections 236C and 236K)
Property withholding is restructured. On sale, Section 236C now applies a single flat rate of 2.75% of the gross consideration for sellers on the Active Taxpayer List; non-filer sellers are subject to 11.5%. On purchase, Section 236K applies a flat 1.25% of fair market value for filers irrespective of property size, while non-filer buyers remain subject to value-banded rates of 10.5%, 14.5% and 18.5%. The late-filer tier is abolished in both sections. The differential between filer and non-filer treatment is now the dominant cost variable in property transactions.
New Sections: 151B and 154B
Section 151B. Life insurance companies, family takaful and window takaful operators must deduct tax on payouts, surrender values and maturity proceeds paid to individuals. The taxable base is the gross payout less aggregate premiums paid. The rate is 15% where the payout occurs within one year of policy issuance and 10% between one and four years. Payouts after four years, or on death or disability, are exempt. The deduction constitutes final tax.
Section 154B. Banks and financial institutions must deduct a flat 5% on amounts credited or received as revenue from social media platforms. The deduction is minimum tax for residents and final tax for non-residents without a permanent establishment in Pakistan. The section applies to content creators, digital agencies and any person monetising platforms such as YouTube, Facebook, Instagram and TikTok.
WHT Rate Card TY 2027: Summary Tables
The WHT Rate Card TY 2027 set out below reflects the enacted Finance Act 2026 and serves as the Withholding Tax Card 2027 reference for the most commonly applied sections of the Income Tax Ordinance 2001. Section-specific thresholds, exemptions and reduced-rate categories apply; the calculator resolves these automatically.
Employment and Investment Income
| Section | Transaction | Filer (ATL) | Non-Filer |
|---|---|---|---|
| 149 | Salary | Slabs 0% to 35% | Same slabs |
| 149(3) | Directorship / BoD fee | 20% | 20% |
| 150 | Dividends (general / listed) | 15% | 30% |
| 150 | Dividends (IPPs) | 7.5% | 15% |
| 151 | Profit on debt (bank deposits) | 20% | 40% |
| 151 | National Savings Schemes | 20% | 40% |
| 151B | Life insurance payout (within 1 year) | 15% | 15% |
| 151B | Life insurance payout (1 to 4 years) | 10% | 10% |
Salary withholding under Section 149 operates through the revised eight-slab table set out above. Section 151B applies to the payout less aggregate premiums paid and constitutes final tax; payouts made after four years of policy issuance, or on death or disability, are exempt from deduction.
Goods, Services and Contracts
| Section | Transaction | Filer (ATL) | Non-Filer |
|---|---|---|---|
| 153(1)(a) | Goods (companies) | 5% | 10% |
| 153(1)(a) | Goods (individuals / AOPs) | 5.5% | 11% |
| 153(1)(b) | Specified services | 7% | 14% |
| 153(1)(b) | IT and IT-enabled services | 4% | 8% |
| 153(1)(b) | Independent professionals | 15% | 30% |
| 153(1)(b) | Terminal and port services | 12% | 24% |
| 153(1)(b) | Other services (residual) | 14% | 28% |
| 153(1)(c) | Contracts (companies) | 7.5% | 15% |
| 153(1)(c) | Contracts (individuals / AOPs) | 8% | 16% |
Reduced rates apply to specific supply categories, including rice, cotton seed and edible oils (1.5%), yarn traders (0.5%), pharmaceutical distribution (1%) and cigarette distribution (2.5%). Sportsperson contracts are subject to 15%, or 30% for non-filers. Annual payment thresholds of Rs. 75,000 (goods) and Rs. 30,000 (services) apply before withholding is triggered.
Exports, IT and Digital
| Section | Transaction | Filer (ATL) | Non-Filer |
|---|---|---|---|
| 154 | Export of goods (minimum tax) | 1.25% | 1.25% |
| 154A | IT / ITeS exports (PSEB-registered) | 0.25% | 0.25% |
| 154A | Other exported services | 1% | 1% |
| 154B | Social media platform revenue | 5% | 5% |
| 152(1C) | Offshore digital services | 15% | 15% |
Export regimes under Sections 154 and 154A apply a single rate without a filer distinction. The 0.25% concessionary rate for PSEB-registered IT exporters is available through Tax Year 2028-29. Section 154B deductions are minimum tax for residents and final tax for non-residents without a permanent establishment.
Property
| Section | Transaction | Filer (ATL) | Non-Filer |
|---|---|---|---|
| 236C | Sale of property | 2.75% | 11.5% |
| 236K | Purchase (≤ Rs. 50M) | 1.25% | 10.5% |
| 236K | Purchase (Rs. 50M–100M) | 1.25% | 14.5% |
| 236K | Purchase (> Rs. 100M) | 1.25% | 18.5% |
| 155 | Rent (companies) | 15% | 30% |
| 155 | Rent (individuals / AOPs) | Slabs 0% to 25% | Doubled |
The filer rates under Sections 236C and 236K are now flat and no longer vary with property value. Non-filer purchase rates remain value-banded. The late-filer tier that previously sat between the two has been abolished.
Rates per the Finance Act 2026 (Act No. XLIII of 2026). This summary is for general information and is not a substitute for professional tax advice.
Practical Implications for Businesses and Taxpayers
- Payroll. The revised Section 149 slabs apply from the first payroll cycle of July 2026. Employers should recalibrate withholding for every employee, re-estimate annual taxable salary including bonus and allowance projections, and confirm that the abolished surcharge is no longer being applied to high earners.
- Service providers and their customers. Withholding agents paying for services should re-map vendors to the restructured Section 153(1)(b) tiers, in particular the new professional and terminal-and-port categories. Misclassification between the 7%, 14% and 15% tiers produces either under-deduction exposure or unnecessary cost to the vendor.
- Exporters. The increase to 1.25% under Section 154 affects cash flow on every export realization. IT exporters should confirm PSEB registration status to retain the 0.25% concessionary rate, which is now available through Tax Year 2028-29.
- Property parties. Filer status should be verified before any transfer is registered. For a purchase above Rs. 100 million, the difference between the filer and non-filer rate is 17.25 percentage points of fair market value. Appearing on the Active Taxpayer List before the transaction date is the single most effective withholding mitigation available.
- Insurers and financial institutions. Life insurers and takaful operators must implement Section 151B deduction at source, including the net-of-premiums computation and the four-year and death-or-disability exemptions. Banks must identify social media platform receipts and apply Section 154B at 5%.
- Compliance review. Withholding statements, vendor masters and payment workflows should be updated for the Tax Year 2027 rates before the first statutory filing of the year. Our Pakistan taxation and income tax return filing services and payroll processing services teams support both exercises.
Pakistan Withholding Tax Calculator
The calculator applies the enacted Finance Act 2026 rates for Tax Year 2027 across salary, dividends, profit on debt, goods, services, contracts, exports, rent, property transactions, life insurance payouts and social media revenue. Each computation includes filer and non-filer treatment and a step-by-step explanation with its statutory basis.
Launch Pakistan WHT CalculatorFrequently Asked Questions
Common questions on Tax Year 2027, the WHT Rate Card TY 2027 and withholding under the Finance Act 2026.
When does Tax Year 2027 start and end in Pakistan?
Tax Year 2027 covers the income year from 1 July 2026 to 30 June 2027. Pakistan follows a July-to-June fiscal year, and each tax year takes the name of the calendar year in which it ends. Withholding on payments made during this period is governed by the rates enacted through the Finance Act 2026.
Has Finance Bill 2026 been passed?
Yes. Finance Bill 2026 was enacted as the Finance Act 2026 (Act No. XLIII of 2026) and received presidential assent on 26 June 2026. Its provisions took effect on 1 July 2026 and govern withholding tax for Tax Year 2027.
Where can I find the WHT Rate Card TY 2027?
The WHT Rate Card TY 2027 is based on the enacted Finance Act 2026. This page sets out the key withholding rates for Tax Year 2027 in summary tables, and the Pakistan Withholding Tax Calculator applies the full rate tables automatically, including filer and non-filer treatment and section-specific thresholds.
What are the salary tax slabs for Tax Year 2027?
Salary income in Tax Year 2027 is taxed through eight progressive slabs. Income up to Rs. 600,000 is exempt. The marginal rate then rises through 1%, 11%, 20%, 25%, 29% and 32% bands to a top rate of 35% on annual taxable income above Rs. 7,000,000. The high-earner surcharge that applied in the prior year is no longer payable.
What is the withholding tax on property sale and purchase in Tax Year 2027?
Under Section 236C, sellers on the Active Taxpayer List pay a flat 2.75% of the gross consideration and non-filers pay 11.5%. Under Section 236K, buyers on the ATL pay a flat 1.25% of fair market value, while non-filer buyers pay 10.5% up to Rs. 50 million, 14.5% between Rs. 50 and 100 million, and 18.5% above Rs. 100 million. The Finance Act 2026 removed the FMV-banded filer rates and the late-filer tier.
What new withholding sections were introduced by Finance Act 2026?
Two new sections apply from Tax Year 2027. Section 151B requires life insurance companies and takaful operators to deduct 15% on payouts made within one year of policy issuance, or 10% between one and four years, computed on the payout less premiums paid, as final tax. Payouts after four years, or on death or disability, are exempt. Section 154B requires banks and financial institutions to deduct a flat 5% on revenues received from social media platforms.
What is the difference between filer and non-filer withholding rates?
Persons on the FBR Active Taxpayer List pay the standard withholding rates. Persons not on the ATL are generally subject to higher withholding, in many sections double the filer rate under the Tenth Schedule of the Income Tax Ordinance 2001. Certain regimes, including exports under Sections 154 and 154A, apply a single rate regardless of filer status.
How do I calculate my withholding tax for Tax Year 2027?
The Pakistan Withholding Tax Calculator covers salary, dividends, profit on debt, goods, services, contracts, exports, rent, property transactions, life insurance payouts and social media revenue. Select the transaction type, enter the amount and filer status, and the calculator applies the enacted Finance Act 2026 rates with a step-by-step explanation of the computation and its statutory basis.