As a Pakistani freelancer working on Upwork, Fiverr, or with direct clients, tax confusion is very common. “How much tax do I have to pay?”, “How do I get an NTN?”, “What is withholding tax?”, “What are the income tax slabs?” — these are questions every beginner asks.

I’m Eman, a freelancer from Faisalabad, Pakistan. I’ve faced all of this myself and now I’m explaining it in a practical way. This guide is based on the current FBR rules for 2025–2026 (always double-check the official FBR website for the latest updates).

1. Step 1: Register for NTN (Free & Mandatory)

You cannot file taxes without an NTN (National Tax Number).

How to get it:

• Go to the FBR Iris portal: https://iris.fbr.gov.pk
• Click “Register” → “Individual” → “Freelancer/Professional”
• Enter CNIC, phone, email → verify with OTP
• You’ll get your NTN in 5–10 minutes

Why it’s important: Upwork/Fiverr US clients withhold 30% tax by default if you don’t have NTN (you can reduce it to 0% by submitting Form W-8BEN).

2. How to Calculate Tax on Freelance Income

In Pakistan, freelancers fall under “Income from Business/Profession”.

2025–2026 Income Tax Slabs (for individuals):

• Up to PKR 600,000: 0% tax
• PKR 600,001 – 1,200,000: 5% on amount above 600,000
• PKR 1,200,001 – 2,400,000: PKR 30,000 + 15% on amount above 1,200,000
• PKR 2,400,001 – 3,600,000: PKR 210,000 + 25% on amount above 2,400,000
• PKR 3,600,001 – 6,000,000: PKR 510,000 + 30% on amount above 3,600,000
• Above PKR 6,000,000: PKR 1,350,000 + 35% on amount above 6,000,000

Example:

If your yearly income is PKR 1,800,000:

• First 600,000: 0%
• Next 600,000 (600k–1.2M): 5% = PKR 30,000
• Next 600,000 (1.2M–1.8M): 15% = PKR 90,000 Total tax: PKR 120,000 (approx 6.67% effective rate)

3. Withholding Tax on Foreign Income

• US/International clients (Upwork/Fiverr): 30% withholding by default (US tax) Solution: Submit Form W-8BEN on Upwork/Fiverr (add your NTN) – withholding drops to 0% under Pakistan-US tax treaty.
• Pakistani clients: 10% withholding tax (Section 153) if they are a company.

4. Sales Tax (18% GST) – When Does It Apply?

Freelancers only pay sales tax if yearly turnover exceeds PKR 10 million.

For most beginners, it doesn’t apply (you’re safe in the starting phase).

5. Annual Tax Filing (Simple Steps)

• File your return by June 30 every year (on Iris portal).
• Proof of income: Upwork/Fiverr statements, bank statements.
• You can deduct expenses (internet, laptop, portion of electricity bill).
• Late filing has penalties, so do it on time.

Quick Checklist for Pakistani Freelancers:

• Get your NTN (free).
• Submit Form W-8BEN on platforms.
• Track your income (Excel or Toggl).
• File yearly return (hire an accountant for PKR 5–10k if needed).
• Keep checking FBR updates.

Doing these steps removes most tax stress and keeps more money in your pocket.

For the full detailed guide with screenshots, tax calculators, more examples, and legal ways to reduce tax, check here:

Pakistani Freelancer Calculating Taxes – Full Guide

Are you also confused about taxes? Share your questions or tips in the comments – let’s help each other!

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