Oct 28, 2018 2 min read

Pakistan Payroll Outsourcing Alert

Global Payroll Outsourcing Provider Issues Statutory Change Alert for Pakistan

Pakistan introduces a new tax bracket – companies are required to retroactively recalculate and declare income tax applied since July 1, 2018.

On September 18, 2018, the Ministry of Finance for Pakistan introduced Finance (Amendment) Bill 2018/2019, which amended the previously announced tax year 2019 personal income tax rates and brackets. In accordance to the new bill, the following tax brackets apply to the salaries paid during July 1, 2018 to June 30, 2019 to Pakistani tax residents:


Annual Income (in PKR)
FromToTax Rate/Minimum Tax Amount in PKR*
1400,0000%
400,001800,0001,000
800,0011,200,000 2,000
1,200,001 2,500,000 5% of the amount exceeding PKR 1,200,000.00
2,500,001 4,000,000 PKR 65,000 plus 10% of the amount exceeding PKR 2,500,000.00
4,000,001 8,000,000 PKR 290,000 plus 20% of the amount exceeding PKR 4,000,000.00
8,000,001 AbovePKR 1,090,000 plus 25% of the amount exceeding PKR 8,000,000.00

*Respective minimum tax amounts are applied to all taxpayers with annual taxable income between 400,000 and 1,200,000. For example, if the annual taxable income of an employee exceeds PKR 800,000 but is less than PKR 1,200,000 then the total annual income tax liability of the taxpayer is PKR 2,000.

Total annual net income should be rounded to the nearest Pakistani Rupee for the income tax calculation purposes.

The revised income tax brackets are applicable to all taxable employment income earned after July 1, 2018 and before June 30, 2019. Therefore, the employers are required to retroactively apply the revised rates and brackets on all compensation already paid and declared since the beginning of the current tax year; i.e. from July 1, 2018.

Please contact your Mercans’ services delivery team for any additional information regarding the implications of the above changes.

For additional information please visit https://mercans.com/.

 

 

Most viewed posts

View all posts

Mercans Adds Thought Leader Pete Tilakos to its Board

Pete is a renowned global payroll product strategy leader, HR industry analyst, advisor, and thought leader.

Feb 8, 2023 2 min read

Dubai Multi Commodities Centre (DMCC) Mandates Wages Protection Sys...

This will enable DMCC member companies to pay employees’ wages via banks, exchange houses, and financial institutions approved by the UAE Central Bank.

Feb 8, 2023 1 min read

Norway Announced Income Tax Rate 2023 and Introduced a New Social Tax

A new 5% Social Tax has been introduced for yearly income exceeding 750,000 NOK. The tax will only kick in once the employee's earnings surpass this limit.

Feb 7, 2023 1 min read

Lebanon Announced Tax Rate and Exemption Changes for 2023

In addition, the Lebanese government has announced an official LBP to USD exchange rates to be used for payroll calculation purposes.

Feb 7, 2023 1 min read

Qatar changes Social Security Contribution Rates for GCC Nationals

The General Retirement and Social Insurance Authority (GRSIA) of Qatar has announced changes in the Social Security and Pension Law with updated contribution rates applicable to private sector employees in Qatar, effective from 3 January 2023. The up

Feb 1, 2023 1 min read

Mercans’ HR Blizz is now an IRAS-Certified Payroll Software

Accreditation of HR Blizz by IRAS in Singapore allows businesses to submit their GST and Taxes electronically accurately.

Jan 26, 2023 3 min read