What Is Business Income Tax in Pakistan?
Business income tax is calculated on taxable business income under the applicable Pakistan income tax rules. The rate and formula depend on the annual taxable income and taxpayer category covered by the relevant provisions. Enter taxable business income above to estimate annual tax, monthly tax, effective rate, and after-tax income.
How the Business Income Tax Calculator Works
The calculator takes the taxable business income you enter, identifies the applicable annual income slab, and applies the statutory formula for that bracket. For monthly input, it first annualizes the amount. The result then shows estimated annual tax, average monthly tax, effective rate, and after-tax income.
Who Should Use This Business Tax Calculator?
This calculator is for business, professional, self-employed, AOP, and other taxpayers with taxable business income.
- Business owners and sole proprietors.
- Self-employed business operators and professionals.
- AOP participants who need a regular-slab estimate.
- Anyone estimating taxable business income before reviewing their tax position.
How to Use the Business Tax Calculator
- Choose annual or monthly taxable business income.
- Enter the taxable income value in rupees; monthly income is annualized before the formula is applied.
- Select the calculate button.
- Review the applicable slab, annual tax, effective rate, monthly tax, and after-tax income.
- Download a clean PDF result or share the calculator link when useful.
Enter taxable income directly. This is not a gross-turnover or expense calculator.
Is Business Tax Calculated on Turnover or Taxable Income?
Gross sales or receipts are the amounts received from customers before business costs. Turnover generally represents total business sales or receipts, while accounting profit is calculated after business expenses. Taxable business income may differ from accounting profit after applying the relevant tax rules and adjustments.
This calculator does not calculate expenses, decide whether an expense is allowable or convert turnover into taxable income. Enter the taxable business income already determined from your records or with appropriate professional guidance.
Worked Example: Tax on Rs 3,000,000 of Taxable Business Income
Assume a sole proprietor has already determined taxable business income of Rs 3,000,000 for the tax year after reviewing the business records and applicable adjustments. The calculator does not determine those adjustments; it calculates the estimate from the taxable income entered.
- Taxable business income
- Rs 3,000,000
- Applicable slab
- Rs 2,400,001 to Rs 3,600,000
- Fixed tax
- Rs 330,000
- Income exceeding Rs 2,400,000
- Rs 600,000
- Tax on the excess
- Rs 600,000 × 25% = Rs 150,000
- Estimated annual tax
- Rs 330,000 + Rs 150,000 = Rs 480,000
- Effective tax rate
- 16%
- Average monthly tax
- Rs 40,000
- Estimated average monthly income after tax
- Rs 210,000
Business Income Tax vs Salary Income Tax
Salary income uses separate salaried-person tax formulas and salary-specific input modes. This page uses the business Division II slabs and accepts either annual or monthly taxable income, converting monthly values to annual income before calculation. Choose the route that matches the income type you are estimating.
FBR Business Income Tax Slabs for 2026-27
The table below is the configured reference for this calculator. A fixed amount is part of the same formula and is not added again as a previous-slab amount.
| Annual taxable income | Tax rate / formula |
|---|---|
| Up to Rs 600,000 | 0% |
| Rs 600,001 to Rs 1,200,000 | 15% of excess over Rs 600,000 |
| Rs 1,200,001 to Rs 2,400,000 | Rs 90,000 + 20% of excess over Rs 1,200,000 |
| Rs 2,400,001 to Rs 3,600,000 | Rs 330,000 + 25% of excess over Rs 2,400,000 |
| Rs 3,600,001 to Rs 6,000,000 | Rs 630,000 + 30% of excess over Rs 3,600,000 |
| Above Rs 6,000,000 | Rs 1,350,000 + 35% of excess over Rs 6,000,000 |
Business Income Tax for Tax Year 2026–27
The Finance Act 2026 is an official source for amendments applicable to tax year 2026–27. This calculator applies its configured regular business-income tax slabs to provide an estimate. Tax treatment can depend on taxpayer status, income type, minimum-tax rules and other circumstances, so users should confirm the applicable provisions and current FBR guidance before filing.
Business Income Tax Calculator Methodology
The calculator validates the selected annual or monthly taxable income, converts monthly input to annual income when selected, applies the applicable bracket, calculates fixed tax plus the rate applied to excess income above the threshold, and derives effective and average monthly figures. It does not calculate turnover, expenses, deductions, credits, exemptions, Section 7E, Section 113 minimum tax, surcharge, or special regimes.
Frequently Asked Questions About Business Income Tax
What is a business income tax calculator?
A business income tax calculator estimates the income tax payable on taxable business income using the applicable Pakistan income tax slabs and formulas. Enter your taxable income to estimate your annual and monthly tax.
What is taxable business income?
Taxable business income is the amount of business income subject to income tax after applying the relevant rules for determining taxable income. It should not automatically be treated as gross sales or turnover.
Is business tax calculated on profit or turnover?
This calculator requires taxable business income rather than simply gross turnover. The treatment of business expenses and other adjustments depends on the applicable tax rules and the taxpayer's circumstances.
What is the tax on Rs 3 million of taxable business income?
Using the configured slabs, tax on Rs 3,000,000 of taxable business income is estimated at Rs 480,000: Rs 330,000 plus 25% of the Rs 600,000 exceeding Rs 2,400,000. The effective tax rate is 16%.
Who should use the business income tax calculator?
Business owners, sole proprietors, self-employed business operators, professionals, and other taxpayers with taxable business income within the calculator's scope can use it to estimate their income tax.
Does this calculator include Section 113 minimum tax?
No. The calculator provides a focused regular business income tax estimate and does not automatically calculate separate minimum-tax provisions under Section 113.
Does this calculator include business expenses and deductions?
No. The calculator requires taxable business income as its input. It does not independently calculate your business expenses or determine every allowable deduction.
Can business income up to Rs. 600,000 have zero tax?
The applicable tax treatment depends on the exact taxpayer category and current statutory slab. The calculator applies the configured FY 2026-27 formula to the taxable income entered.
This HisaabKit estimate follows the configured regular business-income Division II slabs for FY 2026-27 and covers July 2026 through June 2027. It is for planning and information only, not tax or legal advice. Confirm your position with current official guidance or a qualified professional.