Work out sales tax in either direction: add it to a net figure, or strip it back out of a price that already includes it. Choose the rate that applies to what you are supplying — the federal rate on goods is not the same as the rate your province charges on services — and add further tax if your buyer is not registered.

Taking sales tax out is a division, not a subtraction

This is the mistake that costs Pakistani businesses the most money on paper, and it is worth being precise about because it looks harmless.

Say a customer pays you Rs 11,800 and the price included sales tax at 18%. The instinct is to take 18% off Rs 11,800, which gives Rs 9,676. That is wrong. The 18% was charged on the net figure, not on the total, so recovering the net means dividing by 1.18 rather than subtracting from the gross:

• Right: 11,800 ÷ 1.18 = Rs 10,000 net, Rs 1,800 tax.
• Wrong: 11,800 − 18% = Rs 9,676 net, Rs 2,124 tax.

The gap is Rs 324 on a single line of a single invoice. Repeated across a month of sales it becomes a reconciliation that never balances, and if the wrong figure is what goes on your return, it is a figure you cannot support when asked. The calculator above shows you both numbers when you strip tax out, precisely so the difference is visible rather than theoretical.

The higher the rate, the worse the error gets. At 18% you are out by 3.2% of the net. The general form is simple enough to keep in your head: net = gross ÷ (1 + rate).

Goods are federal. Services are provincial.

Pakistan does not have one sales tax. It has a federal tax on goods and a separate provincial tax on services, and they are administered by different authorities with different rates, different returns and different registration.

What you supply	Who collects it	Standard rate
Goods	FBR, under the Sales Tax Act 1990	18%
Services in Sindh	Sindh Revenue Board	15%
Services in Punjab	Punjab Revenue Authority	16%
Services in Khyber Pakhtunkhwa	KP Revenue Authority	15%
Services in Balochistan	Balochistan Revenue Authority	15%
Services in Islamabad	FBR (ICT)	15%

The practical consequence is that the same consultancy invoice carries a different rate in Karachi than in Lahore. If you supply services across provinces, you are dealing with more than one authority, and a single blanket rate applied to everything will be wrong somewhere.

Further tax on unregistered buyers

Section 3(1A) of the Sales Tax Act adds 4% further tax when you supply taxable goods to someone who is not registered for sales tax. Two things about it are commonly misunderstood:

• It is a second charge, not a higher rate. An unregistered buyer is charged 18% and then 4%, both on the same taxable value. It is not 22% in one line, and your invoice should show the two separately.
• It is not creditable to the buyer. The standard tax can flow through the chain as input tax; further tax exists specifically to make staying unregistered expensive.

Tick the box in the calculator and it will show the two charges as separate lines, the way they should appear on the invoice.

Common questions

What is the sales tax rate in Pakistan?
The federal standard rate on goods is 18%. Services are taxed by the provinces instead — 15% in Sindh, Khyber Pakhtunkhwa, Balochistan and Islamabad, and 16% in Punjab. Reduced rates apply to a long list of specific goods and services.

How do I remove 18% sales tax from a price?
Divide by 1.18. Do not subtract 18%. On Rs 11,800 including tax, the net is Rs 10,000 and the tax is Rs 1,800; subtracting 18% would wrongly give Rs 9,676.

How do I add sales tax to a price?
Multiply the net figure by the rate. At 18%, Rs 10,000 becomes Rs 1,800 of tax and Rs 11,800 in total.

What is further tax and when does it apply?
It is an extra 4% under section 3(1A), charged on taxable supplies to a buyer who is not registered for sales tax. It is added on top of the standard rate rather than replacing it.

Is GST the same as sales tax in Pakistan?
In everyday use, yes. The law calls it sales tax; “GST” is what most people say and search for. They refer to the same thing.

Input tax, output tax, and what you actually hand over

Sales tax is not a tax on your sales. It is a tax on the value you add, and the calculator above works out one line of an invoice rather than the figure you send to the FBR. Those are different numbers, and the gap between them is where most first-time registrations go wrong.

Two amounts run in opposite directions. Output tax is what you charge your customers on what you sell. Input tax is what your suppliers charged you on what you bought. What you pay over is the difference between them.

Say you buy Rs 100,000 of materials and are charged 18% on top, so Rs 18,000 of input tax. You turn them into something you sell for Rs 150,000, charging Rs 27,000 of output tax. You do not send the FBR Rs 27,000:

• Output tax charged on sales: Rs 27,000
• Less input tax paid on purchases: Rs 18,000
• Payable with the return: Rs 9,000

Rs 9,000 is 18% of the Rs 50,000 of value you added, which is the whole design. If your input tax exceeds your output tax in a period — a month when you bought stock but sold little — the excess is generally carried forward against later periods rather than refunded on the spot.

The condition attached to all of this: you can only claim input tax you can evidence. That means a valid sales tax invoice from a supplier who is actually registered. Buying from an unregistered supplier does not just cost you the further tax discussed above — it leaves you with nothing to set against your output tax, so the full amount you charged is the full amount you pay. This is why registration status is something to establish before you place an order, not at the point of filing.

Who has to register

Registration for sales tax is a separate thing from having an NTN or being on the Active Taxpayers List for income tax. Broadly, it reaches importers, manufacturers above the cottage-industry threshold, wholesalers and distributors, and retailers who meet the criteria set for them — and anyone else making taxable supplies in the course of a business.

If you supply services rather than goods, you register with the revenue authority of the province you supply in, not with the FBR, and you file that province’s return. Supplying services in more than one province can mean more than one registration.

The specific thresholds move, and they are the kind of detail that is not worth carrying second-hand. Confirm the current position for your own category with the FBR or the relevant provincial authority before deciding you are outside it.

Which of these rates is most likely to be out of date

Not all of the figures on this page carry the same confidence, and it is more useful to say so than to present them as uniformly settled.

The 18% federal rate on goods is solid. It is set in the Sales Tax Act 1990, it applies nationally, and a change to it is federal budget news that is impossible to miss.

The provincial service rates are the entries most likely to have moved since this page was last checked. Each province sets its own through its own authority, they are changed independently, and they are often adjusted in provincial budgets that receive a fraction of the coverage the federal one gets. If a provincial rate is load-bearing for an invoice you are about to issue, confirm it against that authority directly. The rates here were last verified on 26 August 2026.

Other calculators

• Income tax calculator — salary tax across nine tax years.
• Filer status calculator — what non-filer withholding rates cost you.
• Late filing penalty calculator — sections 182 and 182A.
• Budget 2026-27 salary slabs compared — what changed this year.

Sources

• Sales Tax Act 1990, including section 3 (scope of tax) and section 3(1A) (further tax on supplies to unregistered persons).
• Federal Board of Revenue, sales tax rates on goods. Standard rate raised to 18% by the Finance (Supplementary) Act 2023; further tax raised to 4% by the Finance Act 2023.
• Sindh Revenue Board, Punjab Revenue Authority, Khyber Pakhtunkhwa Revenue Authority and Balochistan Revenue Authority, for standard rates on services in each province.

This page gives general information about tax in Pakistan. It is not advice on your own situation. Rules and rates change, sometimes in the middle of a year. Before you act on anything here, check the current position with the FBR, the relevant provincial revenue authority, or a registered tax practitioner.