2.1ÌýÌýÌýÌý Withholding of income tax
The employer is required to make statutory deductions from the salaries of its employees receiving more than PKR 600,000 per annum. These deductions are made on an estimation basis and are made against a monthly salary, with the amount deducted paid to the national treasury within seven days of payment (see 1.3.2).
2.1.1ÌýÌýÌýÌý Calculating income tax deductions
The ITO 2001, First Schedule provides a basis of computation for the income tax deductions which the employer will withhold at the time of paying to the employee. The amount paid shall be multiplied by 12 if employment commences from July and by the number of months remaining for June for employees appointed thereafter. For instance, if an employee is appointed in July, then their salary is multiplied by 12, however, if they are appointed in February, then the income shall be multiplied with four months only as that is the only remaining number of months to year end. The First Schedule is appended below for easier understanding:
| S No | Annual estimated taxable income | Rate |
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Web page updated on 17 Mar 2025 16:40