Pakistan's freelancers have just had their best quarter on record. According to State Bank of Pakistan data reported on 23 October, freelancers brought $549 million into the country in July–September 2026, up 45% from $377 million in the same three months last year. September alone brought in about $197 million, the highest monthly figure so far.
More money coming in also means more tax deducted, and more freelancers who need to get the tax side right. Here is what the numbers show and what they mean for you.
The numbers at a glance
- Q1 2026-27 (July–September): $549 million, up 45% year on year (SBP data)
- IT freelancers: $333 million, up from $272 million, about 22% growth
- Non-IT freelancers: $215 million, up from $104 million, a 106% jump
- September 2026: about $197 million, the highest month on record, up 49% on September 2025
- Full year 2025-26: $1.76 billion
- Estimated freelancers in Pakistan: around 3 million (Pakistan Freelancers Association)
The biggest change is non-IT work, such as accounting, bookkeeping, writing, design, virtual assistance and marketing, which more than doubled. That matters for tax, because non-IT freelancers usually pay a higher rate than IT freelancers.
What the growth means for your tax
When a foreign client pays you and the money arrives in Pakistan through a bank, the bank deducts income tax when it converts the foreign currency (section 154A of the Income Tax Ordinance, 2001). For Tax Year 2027 the rates are:
- 0.25%: export of software, IT or IT-enabled services by a freelancer registered with and certified by PSEB (extended up to tax year 2029)
- 1%: every other case, including most non-IT freelancers and IT freelancers who are not registered with PSEB
Example. Two freelancers each receive Rs 1,000,000 from foreign clients in a month:
- PSEB-registered IT freelancer: Rs 1,000,000 × 0.25% = Rs 2,500
- Non-IT freelancer (or IT freelancer without PSEB): Rs 1,000,000 × 1% = Rs 10,000
Both rates are low. But the low rate is only final if you meet the conditions in section 154A(2). If you don't, the income can fall under the normal slab rates, which can be much higher. Check your own figure with our free Freelancer Tax Calculator.
Three steps to keep the low rate
1. File your income tax return every year.
This is the condition people miss most. The bank has already deducted your tax, so it feels like nothing is left to do. But filing your return is what makes that deduction final. Filing also keeps you on FBR's Active Taxpayers List.
2. Receive payments through a bank or licensed channel.
Money that comes through banks and licensed payment providers is recorded, and the tax is deducted at the right rate. Keep the bank credit advice for each payment with the matching invoice.
3. Register with PSEB if your work is IT or IT-enabled.
For an IT freelancer, the difference between 1% and 0.25% adds up quickly. On Rs 12,000,000 a year, that is Rs 120,000 in tax instead of Rs 30,000.
Also note: YouTube, TikTok and other social-media platform income is not export income. Under the new section 154B, banks deduct 5% on it, and for residents this is a minimum tax. Keep it separate from your service income.
Where non-IT freelancers stand
Non-IT freelancers grew the fastest this quarter, and most of them pay 1%. That is still a low rate compared with the slab rates, but only if the return is filed and the other conditions are met. If you provide accounting, bookkeeping, writing or design services to foreign clients, keep clean records from the first payment. It makes filing simple and avoids questions later.
For the full rules, see our guide: Freelancer Tax in Pakistan 2026-27: How Foreign Income Is Taxed.
Frequently asked questions
Do record freelancer earnings change the tax rate?
No. The rates are set by law: 0.25% for PSEB-registered IT exporters and 1% in other cases for Tax Year 2027. The growth simply means more freelancers are paying them.
I am a non-IT freelancer. Can I pay 0.25%?
The 0.25% rate is for exports of software, IT or IT-enabled services by a person registered with and certified by PSEB. Other exported services are taxed at 1%.
Is the tax deducted by the bank all I have to pay?
It is final only if you meet the section 154A(2) conditions, starting with filing your return. Otherwise the normal rules apply.
Need help?
HLM Consultants helps freelancers with tax return filing, PSEB-related records and bookkeeping. Work out your tax with the free Freelancer Tax Calculator, or contact us for advice on your situation.
Sources: State Bank of Pakistan data as reported by The Nation (23 October 2026); Daily Times (18 October 2026) and Business Recorder (27 October 2026) for September figures; Income Tax Ordinance, 2001 (amended up to 30 June 2026, FBR): sections 154A and 154B, First Schedule Part III Division IVA. This post is general information, not tax advice for your case.