Filing Taxes for Multiple Freelance Incomes in Pakistan — A 2025 Guide

Think Freelance Income Isn’t Taxable in Pakistan? Here’s the Truth

Think freelancing means tax-free income? That’s one of the biggest misconceptions in Pakistan. Freelance income, defined as earnings from independent professional services rather than traditional employment, is fully taxable under Pakistani law. This includes revenue generated from online platforms, direct client work, or any other self-generated income stream.

Yes, freelance income is taxable in Pakistan. If your annual earnings exceed the FBR’s threshold, you’re required to file a tax return and declare all freelance income — whether earned locally or internationally. This includes income from platforms like Fiverr, Upwork, and Payoneer. This obligation is governed by the FBR’s Official Income Tax Ordinance, 2001.

Freelance income differs from salaried income because freelancers are considered self-employed individuals. This means the responsibility for calculating and remitting taxes lies solely with the individual, not an employer. To operate legally, freelancers must obtain a National Tax Number (NTN). This unique tax identification is essential for recognizing your income and complying with tax regulations. For details on this, refer to our guide on [How to Get NTN as a Freelancer in Pakistan].

Earnings from foreign platforms like Upwork, Fiverr, and Payoneer are indeed taxable in Pakistan. According to FBR guidelines, any income received in a Pakistani bank account—even from foreign freelance clients—qualifies as taxable income if it exceeds the annual threshold. When foreign income is received, it must be converted to Pakistani Rupees (PKR) for tax declaration purposes, and banking channels provide traceability, which is crucial for compliance. Even freelancers operating informally without formal company registration are subject to these tax laws if their income crosses the FBR’s specified threshold. This information is based on long-standing FBR policy and remains applicable unless new tax laws are introduced — making it a reliable guide for freelancers year-round.

How Much Can a Freelancer Earn Tax-Free in Pakistan? Here’s What the FBR Says

Many freelancers wrongly believe they don’t owe taxes unless they earn a salary — but here’s what the FBR really says. As established, freelance income in Pakistan is indeed taxable. The key is understanding when your earnings cross the threshold that triggers this tax liability.

As per FBR’s latest rules, if a freelancer’s annual income exceeds the tax exemption threshold, they are required to file a tax return. Currently, any income—whether local or foreign—must be declared if it’s received in a Pakistani bank account and exceeds the limit. The current tax-free income limit for individuals in Pakistan, including freelancers, is PKR 600,000 per annum. You can always check the current FBR income threshold for individuals for the most up-to-date figures.

This applies directly to individual freelancers, who are categorized as “self-employed.” It doesn’t matter if you’re earning from clients within Pakistan or from international platforms like Fiverr, Upwork, or through services like Payoneer; all such income channeled into a Pakistani bank account is aggregated to determine if you’ve crossed the threshold. A tax consultant from Islamabad noted that many first-time freelancers unknowingly cross the threshold but fail to register—exposing themselves to FBR notices later.

How to File Your Freelance Tax Return in Pakistan — Without an Accountant

Most freelancers don’t realize — you can file your tax return online, for free, without hiring an accountant. Even as a freelancer, filing your tax return with the FBR is a mandatory annual exercise, much like it is for regular salaried individuals or businesses. The good news is that the process is designed to be accessible, allowing you to complete it yourself online through the FBR’s IRIS portal.

Here’s a clear, step-by-step guide to help you navigate the FBR tax filing process:

1. Get Your NTN (National Tax Number)

If you haven’t already, your first step is to obtain an NTN. For individuals, your 13-digit Computerized National Identity Card (CNIC) automatically serves as your NTN once registered with the FBR. You’ll need your CNIC, a registered mobile number, and a valid email address. For a detailed walkthrough, refer to our [Step-by-Step Guide to Get NTN in Pakistan].

2. Register on FBR’s IRIS Portal

Once you have your NTN, you need to create an account on the FBR’s online portal, IRIS. This is the official platform where you will submit your tax return.

• Visit the Portal: Go to the FBR’s Official IRIS Portal.
• Sign Up: Click on “Registration for Unregistered Person” if you’re new, or “e-Enrollment for Registered Person” if you have an NTN but no IRIS login.
• Verification: You’ll receive verification codes via SMS and email. Enter these to complete your registration and get your login credentials.

3. Prepare Your Income & Expense Summary

Before you start filling out the form, organize all your financial data for the tax year. This includes:

• Total Earnings: Compile a clear summary of all income received, whether from local clients or international platforms like Upwork, Fiverr, or via Payoneer.
• Bank Statements: Keep all bank statements showing received payments handy, especially for foreign remittances. This helps trace and verify your income.

4. Log In to IRIS & File Your Tax Return

With your documents ready, log into your IRIS account.

• Select Tax Year: On the dashboard, select the relevant tax year for which you are filing the return.
• Access the Form: Navigate to the “Declaration” section and select the appropriate income tax return form for individuals. For freelancers, income is typically declared under “Income from Other Sources” or “Business.”
• Fill Details: Accurately enter your gross receipts (total income) and any eligible expenses. The system will guide you through various sections.
• Wealth Statement: You will also need to fill out your wealth statement, detailing your assets, liabilities, and reconciling your income with your expenses and asset changes for the year. This helps ensure consistency.

5. Review & Submit

After filling in all the required fields:

• Validate: Use the “Validate” button to check for any errors or missing information.
• Pay Tax (if applicable): If the system calculates a tax payable amount, generate a PSID (Payment Slip ID) and pay it through online banking, ATM, or an authorized bank branch.
• Submit: Once everything is accurate and any payable tax is settled, submit your return. You will receive an acknowledgment receipt, which you should download and save for your records.

Thousands of Pakistani freelancers now file taxes online using IRIS — without ever visiting a tax office or hiring a consultant. It might seem daunting at first, but with clear records and this step-by-step approach, you can successfully file your freelance tax return and stay compliant.

Freelancer in Pakistan? These Tax Deductions Can Save You Thousands

Want to reduce your taxable income as a freelancer? You might be missing out on legal deductions that can save you thousands. As a freelancer in Pakistan, you’re considered self-employed, which means you have the opportunity to claim certain business-related expenses. Claiming these legitimate deductions is a smart way to legally reduce your overall taxable income, ultimately lowering your tax liability.

The core principle behind tax deductions for freelancers is that any expense incurred “wholly and exclusively” for the purpose of generating your freelance income can be claimed. This means you can’t deduct personal expenses, but a wide range of work-related costs are fair game.

Common Deductible Expenses for Freelancers:

Here are some common categories of expenses that freelancers in Pakistan can typically claim:

• Office Equipment:
  • Laptop, computer, monitor, printer, and related accessories (if used primarily for freelance work).
  • Office furniture like desks, chairs, and filing cabinets.
• Internet & Communication:
  • A reasonable portion of your internet bill (if used for both personal and business, you claim the business percentage).
  • Work-related mobile phone expenses or a dedicated business phone line.
• Software & Subscriptions:
  • Any software essential for your work (e.g., design software, editing tools, project management apps, accounting software like QuickBooks).
  • Website hosting and domain registration fees.
  • Professional subscriptions or memberships relevant to your freelance field.
• Professional Development:
  • Costs of online courses, workshops, or certifications that enhance your professional skills directly related to your freelancing.
  • Books or other learning materials.
• Bank & Payment Processing Fees:
  • Bank charges on your business bank account.
  • Commissions or fees charged by freelance platforms (e.g., Upwork, Fiverr) or payment gateways (e.g., Payoneer).
• Travel & Transport (Work-Related):
  • Fuel and maintenance costs for a vehicle used for client meetings or work-related travel (keep a logbook).
  • Public transport fares for business purposes.
• Home Office Expenses:
  • If you use a dedicated space in your home exclusively for your freelance work, you may be able to deduct a proportionate amount of your home’s rent, utilities (electricity, gas), and even depreciation on the dedicated space.
• Professional Services:
  • Fees paid to a tax consultant or legal advisor for services related to your freelance business.

You can view FBR’s official list of allowable business expenses for more detailed guidance. A Lahore-based freelancer shared that deducting his genuine internet and laptop costs reduced his taxable income by over 25% — and he faced no issues during FBR review.

Important Conditions for Claiming Deductions:

To ensure your deductions are legitimate and withstand scrutiny, remember these key conditions:

• Direct Relation: The expense must be directly related to generating your freelance income.
• Documentation: Always keep proper records such as invoices, receipts, and bank statements. No proof, no deduction.
• Reasonable & Provable: The expense must be reasonable and justifiable for your business size and income. Avoid claiming luxury or excessively high personal costs as business expenses.
• No Personal Use Mix: Be careful not to mix personal expenses with business ones. If an asset or service is used for both, only the business portion is deductible.

Here’s a quick comparison to clarify:

Expense Type	Can Be Claimed?	Notes
Laptop for design work	✅ Yes	If used primarily for freelance projects
Full home rent	❌ No	Only office space portion may be claimable
Netflix subscription	❌ No	Personal use, not work-related
Internet (50% used)	✅ Yes	Claim reasonable % with monthly invoice
Fuel for meetings	✅ Yes	Keep logs and receipts
Family vacation trip	❌ No	Not allowed under any freelance category

When in doubt, ask yourself: Would I still pay for this if I didn’t freelance? If not, it may qualify.

Remember, claiming legitimate expenses is a smart financial move, but attempting to claim fake or purely personal expenses can lead to penalties from the FBR. Always claim only what you can justify and have proper documentation for. These deduction rules are not tied to any particular year and have remained consistent under Pakistani freelance tax policy. Once you’ve accurately accounted for your income and expenses, you’ll be ready to present them effectively in your return. Learn how by checking our [Guide to Declaring Business Income as a Freelancer].

Freelancing from Pakistan? Here’s What Most People Get Wrong About Taxes & Refunds

Freelancers often leave money on the table — or worse, make errors that trigger FBR warnings. Navigating tax obligations can feel tricky, especially when you’re managing your own income and expenses. Here, we’ll clarify some of the most common pitfalls, explain how tax refunds work, and shed light on what it means to earn income from overseas clients.

1. Common Mistakes Made by Freelancers

Many first-time freelancers, and even some experienced ones, stumble over basic tax compliance. Knowing these common errors can help you steer clear of future issues:

• Not Registering for NTN or IRIS at All: The biggest mistake is assuming that because you’re self-employed, you don’t need to register. If your income crosses the FBR threshold, an NTN and IRIS account are mandatory.
• Assuming Foreign Income is Tax-Free: This is a widespread misconception. As we’ve discussed, income earned from abroad is taxable in Pakistan if it’s received in your local bank account.
• Declaring Total Income but Skipping Expenses: Many freelancers diligently declare their earnings but forget to claim legitimate business expenses. This oversight inflates their taxable income unnecessarily.
• Mixing Personal and Freelance Transactions: Using a single bank account for both personal and business transactions can make record-keeping difficult and raise red flags during an FBR review.
• Filing Late or Missing the Deadline: FBR deadlines are strict. Late filing can lead to penalties and a loss of your Active Taxpayer List (ATL) status, which has its own disadvantages.
• Using Unverified Consultants or Agents: While professional help is valuable, relying on unverified individuals who might not file accurately or even misuse your information can lead to severe problems down the line.

🧠 Tip: Always use your own IRIS account — never let a third party file blindly on your behalf. Maintain control and oversight of your tax affairs.

2. Can Freelancers Get Tax Refunds?

Yes, absolutely! Freelancers can indeed be eligible for tax refunds in Pakistan. This usually happens if you’ve had a significant amount of withholding tax deducted throughout the year (e.g., 1% on bank transfers or certain platform deductions) and your actual tax liability, after accounting for all income and eligible expenses, turns out to be less.

Here’s what you need to know about refunds:

• Eligibility: If the tax already deducted at source (withholding tax) is more than your final calculated tax payable for the year, you are eligible for a refund of the excess amount.
• Conditions: Your income tax return must be filed accurately and on time. You’ll need proper proof of the tax deducted, such as bank statements or tax certificates.
• Process: After submitting your return, if a refund is due, you’ll need to apply for it through the IRIS portal. The FBR then processes these applications.
• Timeline: While the FBR aims for efficient processing, refunds can take anywhere from 30 to 90 days or even longer after approval, depending on various factors.

👉 Check FBR’s refund eligibility guidelines for complete information on the conditions and process. You might also want to review our guide on [Withholding Tax Rates in Pakistan for Freelancers] to understand how these deductions impact your refund potential.

3. Is Overseas Freelance Income Taxable in Pakistan?

This is one of the most persistent myths among Pakistani freelancers.

Here are some real-world scenarios:

Scenario	Is It Taxable in Pakistan?	Notes
Upwork payment sent to Pakistani bank	✅ Yes	Considered local income when credited to your bank account.
Fiverr income stored in foreign wallet	❌ Not Yet	Only taxed when withdrawn and received into a Pakistani bank account.
Client payment received via Wise (PKR)	✅ Yes	Must declare in your tax return as foreign income received locally.
Paid in crypto, held offshore	❌ Not Yet	If not converted into PKR or received locally, it’s not currently taxed.
Cash payment received abroad	❌ No	Not traceable unless declared voluntarily.

❗ Myth: “I work for US clients, so I don’t owe Pakistan tax.” → False. The FBR taxes residents on their worldwide income. A Karachi-based freelancer once ignored her Payoneer deposits thinking they were exempt — until FBR flagged it as undeclared foreign income during a routine check.

These tax principles around income origin and refunds have remained consistent under FBR — with only technical updates in forms, not concepts. Understanding these nuances is crucial for smooth tax compliance and avoiding unnecessary issues.

Freelance Tax in Pakistan — 8 FAQs Every Freelancer Asks (And Answers You Can Trust)

Still wondering how freelance income is treated in Pakistan? These quick answers cover what most freelancers ask every tax season. Getting clear, accurate information is key to navigating your tax obligations with confidence.

Q1. Do freelancers need to pay tax in Pakistan?

Yes. If your total yearly freelance income exceeds the exemption threshold set by FBR, you’re legally required to file a tax return and pay any applicable tax. This applies whether you earn locally or from international clients.

Q2. What documents do I need to file my freelance tax return?

You’ll typically need your Computerized National Identity Card (CNIC), a valid National Tax Number (NTN), a summary of your income and expenses for the tax year, and bank statements showing all received payments.

Q3. Is income from Fiverr or Upwork taxable in Pakistan?

Absolutely yes.

Q4. Can I file my tax return without hiring an accountant?

Yes, you absolutely can! Freelancers can file their tax returns on their own using the FBR’s online IRIS system. It’s designed to be user-friendly, free, and manageable with some basic guidance and a clear understanding of your income and expenses. Most full-time freelancers in Pakistan now submit tax returns on their own — using nothing but IRIS, CNIC, and online earnings summaries.

Q5. I didn’t earn much this year. Do I still need to file?

While you might not owe any tax if your income is below the exemption limit, filing a tax return is still highly advisable. It helps you become an “Active Taxpayer,” which comes with benefits like lower withholding tax rates on various transactions (e.g., bank withdrawals, property purchases) and enhances your financial profile.

Q6. Can freelancers get tax refunds?

Yes. If you’ve had withholding tax deducted from your payments (e.g., by banks or certain platforms) throughout the year, and your final tax liability is less than the amount already deducted, you are eligible for a refund. You must file your return accurately and on time to claim it.

Q7. Do I need a separate bank account for freelancing?

It’s not strictly mandatory by law to have a separate bank account solely for your freelance income. Keeping your personal and business finances separate simplifies record-keeping, makes it easier to track income and expenses, and significantly reduces the complexity during tax filing or if the FBR ever requests an audit.

Q8. How do I check my filer status after submitting my return?

After submitting your tax return, your filer status usually updates within a few days. You can check it by logging into the FBR IRIS portal and viewing your profile, or by sending an SMS: Type “ATL [space] your 13-digit CNIC” and send it to 9966.

These FAQs are based on long-standing FBR rules and common freelancer scenarios — they remain valid across multiple tax years. Still confused? You’re not alone. Filing once makes the next time much easier. For more detailed guidance on setting up your tax identity, check our [Step-by-Step Guide to Register NTN for Freelancers]. You can also visit FBR’s Help Center if you’re stuck at any step or contact their helpline directly for guidance.

Still Not Filing Taxes as a Freelancer? Here’s What You’re Missing Out On

Still unsure whether tax filing is worth the effort? Here’s what most freelancers never realize — it can unlock far more than just legal safety. By now, you’ve seen that filing taxes isn’t just a legal formality; it’s a crucial step toward building your financial credibility and professional future in Pakistan.

Filing your freelance taxes goes far beyond simply complying with the law. It actively helps you build significant financial credibility. For instance, when you apply for bank loans, a mortgage, or even a visa for international travel, your tax filing history serves as concrete proof of your income and financial standing. It shows that you are a responsible citizen and a professional, which can open doors to opportunities like exploring the benefits of being an Active Taxpayer. Over 50,000 freelancers in Pakistan became tax filers in the last two years — not because they had to, but because they saw the long-term value.

Being a registered tax filer also brings tangible financial benefits. This means more of your hard-earned money stays in your pocket. Moreover, professionalizing your freelance career by being tax compliant can increase trust with potential clients, especially international ones, who often prefer working with registered entities.

Think about your future aspirations: if you ever dream of scaling your freelance work into a proper agency, launching a software export business, or even just diversifying your investments, your tax history will be a critical component. A clean tax record provides a solid foundation for business growth and shows financial institutions and potential partners that you operate legitimately.

It’s important to remember a key point: filing tax doesn’t always mean you have to pay tax. If your annual income falls below the FBR’s exemption threshold, or if your legitimate business expenses reduce your net taxable income to zero, you might not owe any tax at all. However, the act of filing itself is what grants you filer status and all its associated advantages.

This guide has aimed to demystify the process, showing that freelance tax filing in Pakistan is manageable and definitely worth the effort. It’s a strategic move for any freelancer looking to secure their financial future and enhance their professional standing.

It’s easier than you think. Filing once unlocks your future options. For a deeper dive into how being a filer helps you, explore our [Guide to Filer Benefits in Pakistan].