Freelancers Tax in Pakistan: What You Need to Know in 2025

Freelancing is booming in Pakistan. With thousands of skilled professionals offering services on platforms like Upwork, Fiverr, and Freelancer, Pakistan has emerged as one of the top freelancing nations in the world. But with rising income comes greater responsibility—especially in the form of freelancers tax in Pakistan.

What is the Freelancers Tax in Pakistan?

The freelancers tax in Pakistan refers to the income tax that independent workers are required to pay on their earnings from freelance work. Unlike salaried employees whose taxes are deducted at source, freelancers are responsible for filing their own income tax returns with the Federal Board of Revenue (FBR).

In 2025, the FBR has increased its focus on documenting digital income sources, especially from freelancing. Freelancers who earn over PKR 600,000 annually are now required to register as taxpayers and file their annual tax returns under Section 114 of the Income Tax Ordinance, 2001.

Do Freelancers Need to Register With the FBR?

Yes. If you are a freelancer earning in foreign currency or Pakistani rupees, you must register with the FBR and obtain a National Tax Number (NTN). Registration can be done online through the IRIS system.

Even if your income is below the taxable threshold, filing a “zero return” annually keeps you in the tax net and protects you from penalties in the future.

Tax Rates for Freelancers in Pakistan

Freelancers in Pakistan are taxed as individual sole proprietors. The tax rates for individuals in 2025 are as follows:

Income up to PKR 600,000: 0% tax
PKR 600,001 – 1,200,000: 5%
PKR 1,200,001 – 2,400,000: 12.5%
PKR 2,400,001 – 3,000,000: 20%
Above PKR 3,000,000: progressive up to 35%

However, a special tax exemption applies to income earned through IT and ITeS services. If you’re a freelancer working in software development, graphic design, or digital marketing, your income may be tax-exempt until June 2026, provided you’re registered with the Pakistan Software Export Board (PSEB) and FBR.

How to File Freelancers Tax in Pakistan

Here is a step-by-step guide:

Get an NTN through the FBR IRIS portal.
Link your bank account and declare your income sources.
Keep proof of foreign remittances through banking channels.
Maintain digital invoices and client payment records.
Hire a tax consultant or use online tools like Befiler for smoother filing.

Remember, if you receive payments through Payoneer or Wise into your Pakistani bank account, those are traceable and should be declared.

Penalties for Non-Compliance

The FBR has started issuing notices to non-filing freelancers. Penalties for not filing taxes include:

Fine up to PKR 40,000
Freezing of bank accounts
Blockage of CNIC and mobile SIMs
Inability to buy property or travel internationally

Being tax-compliant not only avoids penalties but also builds your financial credibility for visa applications, loans, and more.

Why Filing Tax Benefits Freelancers

Paying tax might seem like a burden, but it brings long-term benefits:

Eligible for business loans
Legal record of income
Access to tax credits
National recognition of your profession

Additionally, government initiatives such as youth freelancing schemes and training programs now require valid FBR registration.

Final Thoughts

With the digital economy growing rapidly, freelancers tax in Pakistan is becoming a major topic. By staying compliant with FBR requirements, freelancers can grow their careers legally and financially. The future of freelancing in Pakistan is bright—but only for those who play by the rules.