Business income tax in Pakistan for 2026-27 starts at 15% on income above Rs 6 lakh and rises to 45% above Rs 56 lakh, with a 10% surcharge on the tax once income passes Rs 1 crore. These rates apply to sole traders, professionals, non-salaried individuals and AOPs such as partnerships, and they did not change in the budget 2026-27.
Last updated: 3 November 2026 by Ahmed.
Below are the full slabs, worked examples and a side-by-side comparison with salaried tax. To check any figure, switch our income tax calculator to Business.
Business income tax slabs 2026-27
| Taxable income a year | Income tax |
|---|---|
| Up to Rs 6,00,000 | 0% |
| Rs 6,00,001 to Rs 12,00,000 | 15% of the amount above Rs 6,00,000 |
| Rs 12,00,001 to Rs 16,00,000 | Rs 90,000 + 20% of the amount above Rs 12,00,000 |
| Rs 16,00,001 to Rs 32,00,000 | Rs 1,70,000 + 30% of the amount above Rs 16,00,000 |
| Rs 32,00,001 to Rs 56,00,000 | Rs 6,50,000 + 40% of the amount above Rs 32,00,000 |
| Above Rs 56,00,000 | Rs 16,10,000 + 45% of the amount above Rs 56,00,000 |
Plus a 10% surcharge on the tax if taxable income is above Rs 1,00,00,000 under section 4AB.
Business income tax examples
| Yearly taxable income | Per month | Tax a year | Tax a month | Effective rate |
|---|---|---|---|---|
| Rs 8,00,000 | Rs 66,667 | Rs 30,000 | Rs 2,500 | 3.8% |
| Rs 12,00,000 | Rs 1,00,000 | Rs 90,000 | Rs 7,500 | 7.5% |
| Rs 16,00,000 | Rs 1,33,333 | Rs 1,70,000 | Rs 14,167 | 10.6% |
| Rs 24,00,000 | Rs 2,00,000 | Rs 4,10,000 | Rs 34,167 | 17.1% |
| Rs 36,00,000 | Rs 3,00,000 | Rs 8,10,000 | Rs 67,500 | 22.5% |
| Rs 60,00,000 | Rs 5,00,000 | Rs 17,90,000 | Rs 1,49,167 | 29.8% |
| Rs 1,00,00,000 | Rs 8,33,333 | Rs 35,90,000 | Rs 2,99,167 | 35.9% |
| Rs 1,20,00,000 | Rs 10,00,000 | Rs 49,39,000 | Rs 4,11,583 | 41.2% |
| Rs 2,00,00,000 | Rs 16,66,667 | Rs 88,99,000 | Rs 7,41,583 | 44.5% |
Example: Rs 36 lakh profit
Rs 36 lakh is in the Rs 32 lakh to Rs 56 lakh slab: Rs 6,50,000 + 40% of Rs 4,00,000 = Rs 8,10,000 a year. That is about Rs 67,500 a month, or 22.5% of profit.
Example: Rs 1.2 crore profit
Slab tax = Rs 16,10,000 + 45% of Rs 64,00,000 = Rs 44,90,000. Surcharge = 10% of that = Rs 4,49,000. Total business income tax = Rs 49,39,000.
Business income tax vs salary tax
| Yearly income | Salaried tax | Business income tax | Business pays more |
|---|---|---|---|
| Rs 12,00,000 | Rs 6,000 | Rs 90,000 | Rs 84,000 |
| Rs 24,00,000 | Rs 1,56,000 | Rs 4,10,000 | Rs 2,54,000 |
| Rs 36,00,000 | Rs 4,16,000 | Rs 8,10,000 | Rs 3,94,000 |
| Rs 60,00,000 | Rs 11,04,000 | Rs 17,90,000 | Rs 6,86,000 |
| Rs 1,20,00,000 | Rs 31,74,000 | Rs 49,39,000 | Rs 17,65,000 |
At the same income, business owners pay several times more tax than salaried people. One reason is that employers withhold salary tax every month, while business tax depends on what you declare. Remember the 75% rule: if salary is 75% or less of your total income, all of it is taxed on this business table.
Advance tax and withholding taxes
- If your last declared income was Rs 10 lakh or more, you must pay advance tax in quarterly instalments under section 147 (by 25 September, 25 December, 25 March and 15 June).
- Tax withheld from your sales, contracts, electricity bills, phone bills and car registration is usually adjustable against your final business income tax.
- Some income has its own final regime and is not added to these slabs, for example dividends, bank profit and capital gains on shares.
Freelancers and IT exporters
Freelancers who receive foreign remittances for IT and IT-enabled services through banks can pay a reduced final tax on those export receipts instead of the slab rates, if they meet FBR’s conditions and are registered with PSEB. Income outside that regime is taxed on the business income tax slabs above. Check your status with a tax adviser before filing.
How to lower business income tax legally
- Keep records of every business expense: rent, salaries, utilities, depreciation. Only profit is taxed.
- Claim all adjustable withholding tax shown in your IRIS tax certificates.
- Use the section 63 pension tax credit and section 61 donation credit.
- Stay on the Active Taxpayers List so you avoid double withholding on your transactions. See how to become a filer.
Want your exact figure with bonus and allowances? Use our free income tax calculator. It also works backwards from the take-home pay you want.
Related guides: Read our guides on business loans in Pakistan and banks in Pakistan.
FAQs
What is the business income tax rate in Pakistan for 2026-27?
For individuals and AOPs: 0% up to Rs 6 lakh, 15% from Rs 6-12 lakh, 20% from Rs 12-16 lakh, 30% from Rs 16-32 lakh, 40% from Rs 32-56 lakh and 45% above Rs 56 lakh, plus a 10% surcharge above Rs 1 crore.
Did the budget 2026-27 reduce business income tax?
No. Only salaried slabs were cut. Non-salaried and AOP rates and the 10% surcharge stayed the same.
How much tax on Rs 24 lakh business income?
Rs 4,10,000 a year: Rs 1,70,000 on the first Rs 16 lakh plus 30% of the remaining Rs 8 lakh.
Do companies use these slabs?
No. Companies pay a flat corporate rate (29% for most companies) plus super tax where it applies. These slabs are for individuals and AOPs only.
Is business income tax the same for filers and non-filers?
The slab rates are the same, but non-filers pay higher withholding on many transactions and cannot easily adjust it, so their real cost is higher.
This guide is for general information only and is not tax advice. Your final tax can differ if you have other income, tax credits or adjustable withholding taxes. Confirm with FBR or a tax adviser before you file.
Related Guides
- Income tax calculator 2026-27 (salary and business)
- Income tax slabs 2026-27: all FBR rates
- Tax on salary in Pakistan: monthly table
- Budget 2026-27 salary tax relief: how much you save
- How to become a filer in Pakistan
- Bank profit rates in Pakistan
- Best investments for monthly income