Guide to Business Tax in Pakistan
Running a business in Pakistan comes with several responsibilities, and tax is one of the most important ones. Whether you are a sole proprietor (working alone), part of an AOP (Association of Persons), or a registered company, the FBR has specific rules for how much of your profit belongs to the state. Our business tax calculator is designed to help small and medium business owners plan their finances without needing an expensive accountant for every small check.
Features for Business Owners
We have added professional-grade logic to this tool:
- Flexible Entity Types: Switch between Sole Proprietorship, SME, or Private Company to see different tax rates.
- Expenses Deduction: Enter your gross revenue and subtract your business expenses (rent, salaries, utility bills) to find your actual taxable profit.
- SME Benefit: Small and Medium Enterprises with revenue up to Rs. 250 million can check their special reduced tax rates (20% for Filers).
- Already Paid Tax: If you have already paid tax at the bank or via withholding, you can subtract it to see the final balance due.
How to Use the Business Calculator
- Select Business Type: Choose how your business is registered.
- Input Financials: Provide your total revenue and total business-related expenses for the year.
- Adjust for Filer Status: A Non-Filer business pays 100% extra tax on slab-based income. Make sure you select the correct status.
- Analyze Balance: The result will tell you your annual tax liability and if you have any balance remaining to pay FBR.
Why Profit is Different from Revenue
Many new business owners make the mistake of calculating tax on their total sales (Revenue). However, in most cases, tax is only paid on Profit (Revenue minus Expenses). Keeping good records of your receipts and invoices can help you save a lot of money when it's time to calculate your final tax.