Introduction to Tax on Freelancers in Pakistan

Now in the last few months you must have come to know how popular freelancing has become in Pakistan today. Today everyone wants to become a freelancer and earn money while staying at home. But some people do not know about the tax on freelancers in Pakistan. 

They think that there is no tax on freelancers. If you also think the same, then wait a little. In this article, I will tell you what the truth is. Is there any tax on freelancers in Pakistan or not? If there is any, then how much? If not, then why not? The answer to all these questions is in this article. So let’s start the article.

Do You Need to Pay Tax on Freelancers in Pakistan?

If you do not want to pay the tax levied on freelancers in Pakistan, then you will have to earn up to a limit. If you earn only up to a limit, then you will have to pay tax because you are earning money, but who will give the government, that too you will have to pay. If you earn more than PKR 600,000, then you will have to pay tax. If you earn less than this, then you will not have to pay tax on freelancers in Pakistan, meaning you will not pay tax.

FBR considers your freelancing income as business income, and if you think that nothing will happen if you do not file taxes, then you are at fault. By not filing taxes, you can face higher tax rates, penalties, and legal action.

How to Register for Tax on Freelancers in Pakistan?

If you want to become responsible people of Pakistan and earn money through freelancing, then you will have to follow the rules of tax on freelancers in Pakistan. If you are ready to become responsible people, then first of all you will have to register in FBR and get National Tax Number i.e. NTN.

Step-by-Step Freelancer Tax Registration Process

• Visit FBR IRIS Portal – Go to iris.fbr.gov.pk.
• Create Account – Enter CNIC and personal details.
• Apply for NTN – Mention the source of your freelancing income.
• Complete Registration – Once your NTN is issued, you can file your tax return.

What Are the Tax Rates for Tax on Freelancers in Pakistan?

Taxes in Pakistan are calculated as per the freelancer’s tax slabs:

• Up to Rs 600,000 – No tax.
• Rs 600,001 – Rs 1,200,000 – 2.5% tax.
• Above Rs 1,200,000 – Progressive tax rates apply.

What Are the Benefits of Paying Tax on Freelancers in Pakistan?

Legal compliance is maintained.

It is easy to avail loans and credit facilities.

One gets the benefit of withholding tax reduction.

One gets access to government incentives and business registration.

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Conclusion on Tax on Freelancers in Pakistan

If you are freelancing and earning regular income, then you have to follow the rules of Tax on Freelancers in Pakistan.

If you file a tax return on time, you can avoid penalties, higher tax rates, and legal issues. Register for NTN and file your tax return on time so that you do not have to face any tax issue.