Comprehending Payroll in Pakistan

Pakistan is a multi-ethnic country of South Asia and the world's fifth-most populous country, with a population of almost 243 million people. Its capital is Islamabad, in the foothills of the Himalayas in the northern part of the country, and its largest city is Karachi, in the south on the coast of the Arabian Sea. Pakistan encompasses a rich diversity of landscapes, starting in the northwest, from the soaring Pamirs and the Karakoram Range through a maze of mountain ranges, a complex of valleys, and inhospitable plateaus, down to the remarkably even surface of the fertile Indus River plain, which drains southward into the Arabian Sea. Here’s a detailed round up of all payroll compliance requirements and regulations, a crucial aspect of payroll services.

Income Tax

Overview and Residential Status

In Pakistan, the Income tax is governed by Income Tax Ordinance, 2001 which has been replaced recently by Income tax ordinance amended up to June 30, 2022 (The Ordinance). In this section, the provisions related to Taxation of Employment Income has been discussed.

The tax year in Pakistan runs from July 01 to June 30 and it is denoted by stating the calendar year in which the end date falls i.e., in case of tax year July 01, 2022 to June 30, 2023 it will be denoted as calendar year 2023.

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