Running a business in Pakistan and have salaried employees? Then understanding payroll tax isn’t optional — it’s your legal responsibility. Let’s break it down in simple terms.
What is Payroll Tax?
Payroll tax refers to the income tax deducted by an employer from an employee’s salary and submitted to FBR on their behalf. This includes:
- Withholding Income Tax (under Section 149)
- EOBI & Social Security contributions (if applicable)
- Other statutory deductions based on salary structure
Who Needs to Pay Payroll Tax?
If you’re a registered business, private limited company, or even a sole proprietor with salaried staff, payroll tax applies to you. Employers are responsible for:
- Deducting tax at source
- Depositing it into FBR’s account
- Issuing salary slips and certificates
👉 Need help setting this up? FilerNow’s Business Registration can assist you from day one.
Payroll Tax Rates in Pakistan
The rate depends on the employee’s monthly salary and follows FBR’s salary tax slabs. For FY 2024–2025, tax starts from income above Rs. 600,000/year.
👉 Check current Tax Rates in Pakistan for detailed slabs.
Why Payroll Tax Matters?
- It’s legally required by FBR
- Builds trust with employees through transparent payslips
- Protects your business from FBR notices and audits
- Helps you maintain a clean ATL status
👉 Need to file employee taxes correctly? FilerNow’s Tax Return Filing team ensures timely and compliant submissions.
Payroll Tax Filing Process
- Calculate monthly salaries and applicable deductions
- Generate salary slips
- Deduct withholding tax
- Submit tax via FBR portal
- Maintain employee tax records
👉 Using payroll software or outsourcing to professionals like FilerNow can save time and prevent costly errors.
Frequently Asked Questions
You can register as a sole proprietor, partnership, or private limited company depending on your goals.
Filernow handles the complete process for all types.
👉 Start Business Registration
Need company setup? 👉 Company Registration
Basic documents include CNIC, business address proof, utility bill, and a business name. For companies, SECP documents are also required.
👉 View Required Documents
Also check 👉 Business NTN Registration
For small/startup businesses, sole proprietorship is easy and fast. For larger setups, legal protection, and scalability, private limited company is better.
👉 Choose the Right Type
Need help with legal compliance? 👉 Company Registration
Yes! Whether you're selling on Instagram, Daraz, or from home — you can register as a sole proprietor and get legal status.
👉 Register Your Online Business
Also need NTN? 👉 Apply Here
Yes. To file business tax returns or get GST/
PSW, your business must be registered.
It’s also needed to open a business bank account.
👉 Start Legal Business Registration
Next step 👉 File Your Tax Return