How to use the business income tax calculator
- 1 Enter your yearly business income or revenue.
- 2 Enter your allowable business expenses.
- 3 Read your taxable income and tax.
- 4 Check the quarterly advance tax amount.
Worked example
A trader with Rs 3,000,000 of income and Rs 600,000 of expenses. Taxable income is Rs 2,400,000. Tax is Rs 170,000 plus 30% of the Rs 800,000 above Rs 1,600,000, a total of Rs 410,000, an effective rate of about 17.1%. Quarterly advance tax would be about Rs 102,500.
Advance tax and record keeping
- Quarterly advance tax under section 147 is due by 25 September, 25 December, 25 March and 15 June for individuals with business income.
- Withholding counts: tax deducted on electricity bills, phone bills, vehicle tokens and contracts can often be adjusted against your final tax.
- Books of account: keep sales records, purchase invoices and bank statements; they support expense claims if FBR asks.
- Sales tax is separate: businesses above the registration thresholds must also register for sales tax.
Charging sales tax? Work it out with the Sales Tax Calculator. Earning from foreign clients? The Freelancer Tax Calculator may give a lower rate.
Features
Non-salaried slabs
Tax year 2027 slabs for individuals and AOPs.
Surcharge
10% extra tax when taxable income is above Rs 10 million.
Advance tax guide
A quarterly figure for section 147 advance tax.
When to use it
Shopkeepers
Estimate tax on yearly profit. Add GST to invoices with the Sales Tax Calculator.
Professionals
Doctors, lawyers and consultants with private practice. Exporting IT services? Try the Freelancer Tax Calculator.
Small businesses
Plan quarterly advance tax. Earning rent too? See the Rental Income Tax Calculator.
Side income
See tax on business income alone. Compare with the Salary Tax Calculator.
Related Tax tasks
Frequently asked questions
What are the tax rates for business individuals in 2026-27?
Nil up to Rs 600,000; 15% up to Rs 1,200,000; Rs 90,000 plus 20% up to Rs 1,600,000; Rs 170,000 plus 30% up to Rs 3,200,000; Rs 650,000 plus 40% up to Rs 5,600,000; and Rs 1,610,000 plus 45% above.
Who uses these slabs?
Individuals and associations of persons whose salary is not more than 75% of taxable income, including traders, professionals and landlords.
What is the surcharge?
A 10% surcharge on the tax of non-salaried individuals and AOPs with taxable income above Rs 10 million.
What expenses can I deduct?
Rent, salaries, utilities, transport, depreciation and other costs incurred to earn business income, with proper records.
Do I need to pay advance tax?
Yes. Business individuals with income above the threshold pay quarterly advance tax under section 147.
What about withholding taxes?
Tax withheld on your sales, contracts and utility bills is usually adjustable against this tax.
Are retailers taxed differently?
Some retailers are covered by special schemes, such as fixed tax for small traders. Check whether a scheme applies to you.
When is the return due?
Usually 30 September for individuals, unless extended by FBR.
What is the difference between salaried and business slabs?
Business slabs start at 15% after the exempt limit and rise to 45%, while salaried slabs start at 1%. People whose salary is more than three quarters of income use the salaried slabs.
Can I reduce tax legally?
Keeping proper records of expenses, donations to approved institutions, pension fund contributions and investment in certain shares can reduce tax.
Do I need to keep books of accounts?
Yes. Businesses should keep sales, purchase and expense records, bank statements and invoices, because FBR can ask for them when reviewing a return. Good records also make it easier to claim every allowable expense.
Results are estimates based on the official rates linked above. Confirm important figures with the issuing authority or a qualified adviser before you act on them.
Built and reviewed by Hamza Farooq, founder and lead developer
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