Sales Tax Withholding Calculator Pakistan
Calculate the 5% sales tax withholding you must deduct when purchasing taxable goods from a non-active sales tax registered supplier. Under Finance Act 2026, this obligation extends to individuals and partnerships, not just companies
Introduction
Sales tax withholding is an important compliance requirement for businesses in Pakistan. When purchasing taxable goods from a supplier who is not on the Active Taxpayer List (ATL) for sales tax, the buyer must withhold 5% of the gross value as sales tax [citation:7]. The Finance Act 2026 significantly expanded this obligation from companies to individuals and partnerships (AOPs), meaning more entities now have withholding responsibilities [citation:7].
What is this calculator?
The Sales Tax Withholding Calculator Pakistan computes the amount to withhold when purchasing from a non-active sales tax registered supplier. It applies the 5% rate to the gross value of supply and shows the net amount payable to the supplier [citation:7].
Formula
Sales Tax Withheld = Gross Value of Supply × 5%
Net Payment to Supplier = Gross Value − Sales Tax Withheld
Important terms
- Sales Tax Withholding： Tax deducted by the buyer from payment to the supplier and deposited with FBR [citation:7].
- Non-Active Supplier： A supplier not appearing on the Active Taxpayer List for sales tax purposes.
- Gross Value of Supply： The total invoice value of the taxable goods.
- Eleventh Schedule： The schedule of the Sales Tax Act specifying withholding obligations [citation:7].
How to use the calculator
- Enter the gross value of supply (PKR).
- Click Calculate Withholding.
Practical Pakistan-specific example
Example： Purchase of Rs. 500,000 from non-active supplier
- Sales Tax Withheld = 500,000 × 5% = Rs. 25,000
- Net Payment to Supplier = Rs. 475,000
Common mistakes
- Not checking supplier's ATL status before payment.
- Failing to deposit withheld tax with FBR within the prescribed time.
- Assuming withholding only applies to companies — it now applies to individuals and AOPs [citation:7].
Who can use the calculator
- Businesses： Making taxable purchases from suppliers.
- Individuals： Newly covered under the expanded withholding obligation.
- Partnerships： Required to withhold under Finance Act 2026.
Disclaimer
This calculator applies the standard 5% rate under the Eleventh Schedule of the Sales Tax Act. Actual obligations may vary based on specific transactions and supplier status. Consult a tax advisor for compliance guidance.