Withholding Tax (WHT) Calculator
Calculate statutory WHT deductions on vendor invoices, commercial contracts, and professional services for corporate and individual payees.
Withholding Tax (WHT) Calculator 2026-27
Finance Act 2026 Compliance§Statutory Framework of Withholding Tax (WHT) in Pakistan
Under the Income Tax Ordinance, 2001, withholding tax is an advance tax collection mechanism where the payer (prescribed withholding agent) is legally obligated to deduct a statutory percentage from payments made to suppliers, contractors, landlords, and service providers, and deposit it directly into the Federal Treasury via an FBR CPR challan.
Section 153(7)
All registered companies, AOPs, and individuals with turnover exceeding PKR 100 Million are statutory withholding agents.
Tenth Schedule
A 100% tax surcharge (doubling the standard deduction rate) is compulsorily levied on any payee not on the active ATL.
Section 21(c)
Failure to deduct or deposit WHT leads to 100% disallowance of that business expense, inflating taxable profits.
2Master Withholding Tax Rate Schedule 2026-2027
Below is the comprehensive statutory schedule of withholding tax rates across major business expenditure categories under the Finance Act:
| Statutory Section | Transaction Nature | Company (Filer) | Individual (Filer) | Non-Filer Rate (100% Surcharge) |
|---|---|---|---|---|
| Sec 153(1)(a) | Sale of Goods (General) | 5.5% | 6.0% | 11.0% - 12.0% |
| Sec 153(1)(a) | FMCG & Fast Moving Consumer Goods | 4.0% | 4.5% | 8.0% - 9.0% |
| Sec 153(1)(b) | Rendering General Services | 9.0% | 11.0% | 18.0% - 22.0% |
| Sec 153(1)(b) | Specified Services (IT, Transport, Security) | 3.0% - 4.0% | 4.0% | 6.0% - 8.0% |
| Sec 153(1)(c) | Execution of Commercial Contracts | 7.5% | 8.0% | 15.0% - 16.0% |
| Sec 155 | Property / Office Premises Rent | 15.0% | Slab Based (Up to 20%) | Double Slab Rate (Up to 40%) |
| Sec 233 | Brokerage & Commission | 12.0% | 12.0% | 24.0% |
| Sec 154 | Export of Goods Realization | 1.0% | 1.0% | 2.0% |
3Monthly & Annual WHT Compliance Cycle for Companies
Deposit via FBR CPR Challan
Tax deducted from vendor invoices must be deposited into the State Bank or National Bank of Pakistan using IRIS e-Payment challans.
Section 165 Statement
Withholding agents must submit the monthly withholding statement on IRIS, itemizing each vendor's NTN, CNIC, and gross invoice sum.
Withholding Certificates
Agents must furnish formal withholding tax certificates (Section 164) to payees so they can claim credit in their annual income tax returns.
4Minimum Tax vs. Final Tax Regime (FTR) Explained
A critical consideration for corporate CFOs and accountants is how deducted tax is treated at year-end:
- Minimum Tax Regime (MTR): Under Section 153(1)(b) for service providers, the tax deducted serves as the minimum tax payable. If actual tax liability calculated on net accounting profit is higher, the company pays the difference; if lower, the deducted tax cannot be refunded.
- Adjustable Tax: Tax deducted on goods supplies under Section 153(1)(a) is adjustable against the company's annual corporate tax liability calculated at 29% plus super tax.
- Final Tax Regime (FTR): In specific transactions (e.g. export realizations under Section 154 or prize bonds), tax deducted constitutes full and final discharge of tax liability.
Consequences of Failure to Deduct or Deposit Withholding Tax
Defaulting on withholding duties triggers severe statutory consequences under Chapter X of the Income Tax Ordinance:
If an agent fails to deduct tax, the Commissioner Inland Revenue recovers the entire unpaid tax directly from the agent, treating them as an "Assessee in Default".
A mandatory default surcharge of 12% per annum is levied on the unpaid tax from the date it was due until actual deposit.
Failure to submit the monthly statement incurs a penalty of PKR 5,000 plus PKR 100 for each day of continued default.
Frequently Asked Questions (FAQs)
When is an invoice exempt from Section 153 withholding tax?
Under the law, withholding tax under Section 153 does not apply if annual payments to a single vendor do not exceed PKR 75,000 for sale of goods, or PKR 30,000 for rendering of services in a financial year.
Can a supplier provide an Exemption Certificate under Section 159?
Yes. If a taxpayer has prior-year tax losses or advance tax credits exceeding current liability, they can apply to the Commissioner Inland Revenue for a reduced or zero-rate exemption certificate under Section 159.
Is WHT deducted on the gross invoice amount including sales tax?
No. Under standard FBR rules, income tax withholding is calculated strictly on the value of goods or services excluding the sales tax component.
How can a company verify a vendor's filer status before payment?
Use our online FBR NTN / ATL Verification Tool or the FBR IRIS verification portal by entering the vendor's 13-digit CNIC or 7-digit NTN to verify Active status immediately.
Need Corporate Withholding Tax Compliance & Retainer?
We manage monthly Section 165 withholding statements, CPR challan generation, vendor tax certificates, and representation in FBR audit notices for corporate entities.