Withholding tax on dividends by filer status and company type.
Withholding tax
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Tax rate
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Net dividend
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The dividend that hits your account is already taxed
In Pakistan you almost never write a separate cheque for dividend tax. The company paying the dividend withholds it at source and sends you the balance, treating that deduction as a final tax under section 150. So when a stock pays out, the cash that reaches your brokerage account is the net figure, already net of withholding. This calculator works backwards and forwards from that: enter the gross dividend declared and it shows what was withheld, what rate applied, and what you actually keep.
What surprises most new investors is that the rate is not a single number. It changes with the source of the dividend and with your filer status. The Federal Board of Revenue (FBR) sets these rates through each Finance Act, so read the percentages below as the ones this calculator currently applies and confirm the live figures with the FBR before relying on them.
Why the source of the dividend changes the rate
The type of company paying the dividend is the first lever. As modelled here, an ordinary listed company pays its dividend with 15% withheld for a filer. A dividend from an Independent Power Producer carries a reduced rate of 7.5%, a deliberate concession to the power sector. A mutual fund dividend is withheld at 15% for a filer. So two investors receiving the same PKR 200,000 in dividends can keep different amounts purely because one holds power-sector shares and the other holds an ordinary stock.
| Source | Rate applied | Tax on PKR 200,000 | Net received |
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A PKR 200,000 dividend, filer versus non-filer
Take a filer holding ordinary listed shares who is declared a dividend of PKR 200,000. At 15%, PKR 30,000 is withheld and PKR 170,000 reaches the account. Now run the same dividend as a non-filer: the rate doubles to 30%, PKR 60,000 is withheld, and only PKR 140,000 arrives. That gap of PKR 30,000 on a single payout is the cost of staying off the Active Taxpayer List, and it repeats on every dividend, every year.
The chart contrasts the net dividend a filer keeps against what a non-filer keeps on the same PKR 200,000 declaration.
Final tax, and the common confusion
Because dividend withholding is a final tax for most individuals, you do not add the dividend to your salary or business income and tax it again at slab rates. The deduction at source settles the liability. The common confusion is assuming you can claim the withheld amount back as a refund the way you might with advance tax on a transaction. For ordinary dividends treated as final tax, there is generally nothing further to reclaim, the rate withheld is the tax. You still report the dividend and the tax deducted in your return, which is also how a filer keeps proof of the lower rate.
This tool is built for retail investors estimating take-home dividend income and for anyone weighing whether filer status is worth it. It does not compute capital gains on the shares themselves, which follow separate rules by holding period, so use the capital gains tool for that side of the return.
How does the company know whether to apply the filer or non-filer rate?
It checks the Active Taxpayer List published by the FBR against your registration number on the payout date. If you appear on the list you get the filer rate, if not the system applies the higher non-filer rate automatically. Getting on the list before the dividend is declared is what secures the lower deduction, so timing your filing matters.
Are dividends from foreign shares taxed the same way?
No. This calculator covers dividends from Pakistani companies and funds that withhold at source. Foreign dividends are a separate matter, typically declared in your return and taxed under different provisions, sometimes with relief for tax already paid abroad. Treat foreign payouts as outside this tool and confirm their treatment with an advisor.