Money you earn from Upwork, Fiverr, or a direct foreign client is called income from services exported abroad. It is income, so it is taxable — but at very low rates if you do things properly.

• The Pakistani tax year runs 1 July to 30 June. Whatever reaches your account in that window belongs to that year.
• If your total yearly income is up to PKR 600,000, your tax is zero. You should still file your return.
• Filing a return and paying tax are two different things. Many freelancers pay almost nothing but still must file.

NTN (National Tax Number) is simply your CNIC number registered with FBR. You get it free by signing up on FBR's IRIS portal — no consultant needed for a basic freelancer registration.

Filer means your name appears on the ATL. You become a filer after you file one annual return. Non-filers pay double withholding tax on almost everything.

• Register once on IRIS with your CNIC, mobile number and email.
• Choose "Individual" and add "Business / Profession" with your freelance work.
• Add your bank account details in the profile — FBR needs them.

Whether you use Payoneer, Wise, direct bank wire, or a marketplace withdrawal, the money enters Pakistan as an inward remittance. Your bank converts it to rupees at that day's rate and credits your account.

• Always bring money through official banking channels. Cash or informal transfers cannot be proven to FBR later.
• Ask your bank for a Proceeds Realization Certificate (PRC) or remittance advice. This single document proves the money is export income.
• Note the exchange rate used on each payment. Log it in the Income Tracker so your yearly PKR total is accurate.

PSEB is the Pakistan Software Export Board. If you register as an IT / IT-enabled services exporter, your foreign income is taxed at a flat 0.25% instead of the normal slabs. That is 25 paisa on every PKR 100.

Example: you earn USD 30,000 in a year. At a rate of 278 that is PKR 8,340,000. With PSEB registration your tax is about PKR 20,850. Under normal slabs the same income would be over PKR 2,100,000.

• Qualifying work: software development, design, writing for IT services, support, data services.
• You register as a freelancer on the PSEB portal with your CNIC, NTN and bank details.
• Keep your registration active and keep proof of foreign remittances.

Local clients, non-IT work, or no PSEB registration means normal slabs. Tax applies only to the amount above each step, not your whole income.

When a foreign payment lands, your bank deducts a small withholding tax and sends it to FBR on your behalf.

This is not an extra tax. It is an advance. At filing time it is subtracted from what you owe. Many PSEB-registered freelancers end up owing zero because the 1% already deducted is more than their 0.25% liability.

• Every invoice you sent, with date, client and amount.
• Bank statements for the full tax year.
• PRC or remittance advice for foreign payments.
• Withholding tax certificates from your bank.
• Business expenses: internet, laptop, software, co-working rent, electricity share.

1. 1Log in to FBR IRIS with your CNIC and password.
2. 2Open "Declaration" and choose the return for the relevant tax year.
3. 3Enter your total foreign receipts in PKR under export of services.
4. 4Enter business expenses to reduce taxable income (normal slab path only).
5. 5Enter the withholding tax your bank already deducted as tax already paid.
6. 6Complete the Wealth Statement — assets, cash, vehicles, property.
7. 7Pay any balance through a PSID challan, then submit.

The deadline is 30 September each year for the tax year that ended on 30 June.

• Not filing because income was below PKR 600,000 — you lose filer status and pay double WHT.
• Taking payments through unofficial channels — no proof, no low export rate.
• Skipping PSEB registration while earning well in IT services.
• Forgetting to claim the withholding tax the bank already deducted.
• Leaving the Wealth Statement empty or inconsistent with declared income.
• Filing after 30 September and paying a late surcharge.