For tax year 2027, which runs from 1 July 2026 to 30 June 2027, a Pakistani freelancer exporting software, IT or IT-enabled services pays 0.25% of foreign proceeds if registered with PSEB, and 1% otherwise. The bank deducts it when the money arrives. The Finance Act 2026 extended the 0.25% rate up to tax year 2029 and added a separate 5% withholding on revenue from social media platforms.
Google suggests searches such as "freelancer tax in Pakistan 2026", "freelancer remittance tax in Pakistan" and "freelancer tax calculator Pakistan", and the June budget changed several rules. This guide sets out what applies now.
How is the tax collected?
Under section 154A of the Income Tax Ordinance, 2001, the bank that converts your foreign payment deducts tax at the rates in Division IVA of the First Schedule. You do not pay it separately; it is taken from the proceeds before the rupees reach your account.
Where the conditions in section 154A are met, including filing your return and any withholding statements you are required to file, that deduction is the final tax on the export income. Expenses cannot be set against it, but you still have to file.
Who qualifies for the 0.25% rate?
The concession covers exports of computer software, IT services and IT-enabled services by a person registered with and certified by the Pakistan Software Export Board. The proceeds need to arrive through the banking system in Pakistan. Everything else exported as a service falls under the 1% rate, so check PSEB's categories before you assume your work counts.
Stay on the Active Taxpayers List as well. People who are not on it can face higher deductions, so check the credit advice your bank issues and fix any filing gap quickly.
What changed in the 2026 budget?
FBR's salient features for 2026-27 confirm that the 0.25% rate for IT and IT-enabled exports, which was due to end after tax year 2026, now runs up to tax year 2029.
The Finance Act 2026 also inserted section 154B. Banks and other financial institutions now deduct 5% from revenue received from social media platforms such as YouTube, Facebook, Instagram and TikTok, including money routed through payment intermediaries. For residents this is a minimum tax. For non-residents with no permanent establishment in Pakistan, the 154B tax is a final tax. Separately, advance tax on foreign payments made with debit, credit and prepaid cards fell from 5% to 0.5%, which helps freelancers paying for overseas software.
What about clients inside Pakistan?
Section 154A is an export rule. Fees from Pakistani clients are ordinary business income taxed under the normal slabs, and you report them on the same return.
Where can you get help with this?
Tax support at TheWing.pk is led by co-founder Waqas Sagar, a Chartered Accountant (ACA, FCCA). A dedicated desk is PKR 36,400 a month and includes a complimentary 30-minute tax consultation, useful for checking your PSEB position and return before the next deadline. A hot desk is PKR 31,800 a month or PKR 1,750 for a day pass, with backup power and dual-ISP fibre at Central Mall, GT Road, DHA Phase 2. This page is general information, not personal tax advice.
Frequently asked questions
Is PSEB registration worth it?
For IT exporters it usually is. It cuts the deduction from 1% to 0.25% of every payment that qualifies.
Does section 154B replace section 154A for creators?
No. Section 154B covers revenue from social media platforms. Client work for IT services stays under section 154A.
Do I still file a return if tax is deducted?
Yes. Filing keeps the deduction final and keeps you on the Active Taxpayers List.
Can I ask in person?
Yes. Book a free tour and mention freelancer tax. Your first day is on us.
