Sales Tax Withholding Calculator – Goods & Services
Withholding agents (government departments, companies, and other notified persons) withhold a portion of the sales tax/GST shown on a supplier's invoice and deposit it directly, under the Federal 11th Schedule and equivalent provincial withholding rules. Choose the Federal authority for goods/services generally, or a provincial authority for that province's services. (Looking for income tax withheld on the payment itself instead? See Withholding Tax (WHT).)
Sales Tax Withholding Rates by Authority, at a Glance
Every row below is drawn directly from the calculator above, grouped by the authority that administers it. "Withholding basis" is what the withholding agent deducts and deposits directly, instead of paying the supplier in full.
| Provider / Category | Withholding Basis |
|---|---|
| Federal – FBR (11th Schedule, Goods & Services) · default rate 18% | |
| Registered / active taxpayer (ATL) – standard supply | 1/5th of the sales tax shown on invoice |
| Wholesaler / dealer / distributor (active taxpayer) | 1/10th of the sales tax shown on invoice |
| Unregistered / non-ATL supplier – govt/public sector agent | Full amount of tax, on value |
| Unregistered / non-ATL supplier – company agent (goods) | 5% of gross value of supplies |
| Advertisement services (unregistered provider) | Full amount, regardless of recipient |
| Online marketplace – non-active seller | 1% of gross value of supplies |
| Lead / scrap battery suppliers | 75% of applicable sales tax |
| Surgical instruments exporters (purchase of goods) | 5% of gross value of supplies |
| Sindh – SRB (Services) · default rate 15% | |
| Registered service provider (general) | 1/5th of the sales tax shown on invoice |
| Unregistered service provider | Full applicable sales tax on gross value |
| Advertisement / insurance agents / cab-hailing / auctioneer / rented immovable property / inter-city transport / reduced-rate construction | Full amount, regardless of registration |
| Punjab – PRA (Services) · default rate 16% | |
| Registered service provider (general, corporate agent) | 1/5th of the sales tax shown on invoice |
| Unregistered service provider | Full applicable sales tax on gross value |
| Advertisement services | Full amount, regardless of registration |
| Telecom / banking / insurance (ATL company – Rule 5A, w.e.f. 10 Jul 2025) | 80% of the sales tax shown on invoice |
| Khyber Pakhtunkhwa – KPRA (Services) · default rate 15% | |
| Registered service provider (general) | 1/5th of the sales tax shown on invoice (KPRA separately references 50% for some non-standard categories) |
| Unregistered service provider | Full applicable sales tax on gross value |
| Advertisement services / government or public sector recipient | Full amount, regardless of registration |
| Balochistan – BRA (Services) · default rate 15% | |
| Registered service provider (general) | 1/5th of the sales tax shown on invoice |
| Unregistered / foreign provider | Full amount shown on invoice, or on gross value if not shown |
| Islamabad – ICT (Services, FBR-administered) · default rate 15% | |
| Registered service provider (general) | 1/5th of the sales tax shown on invoice (general federal rule) |
| Unregistered service provider | Full applicable sales tax on gross value |
| Advertisement services | Full amount, regardless of registration |
This is a simplified summary of the most common categories per authority; each authority's schedule contains additional categories and conditions not captured here. Always confirm the exact rule for your transaction with the relevant authority.
How Sales Tax Withholding Works
Registered vs. unregistered supplier
The core distinction across every authority above is whether the supplier is a registered, active taxpayer or not. A registered, active supplier issues a proper tax invoice showing sales tax as a separate line — the withholding agent typically deducts only a fraction of that shown tax (commonly 1/5th) and pays the rest to the supplier, who deposits the remainder itself. An unregistered or inactive supplier's invoice carries no separate tax line, so the withholding agent must withhold the full applicable tax, computed on the value using the tax-fraction method.
Federal vs. provincial withholding
Goods are taxed under the federal Sales Tax Act, 1990 and withheld per the 11th Schedule administered by FBR. Services, by contrast, are taxed by whichever provincial (or territorial) authority has jurisdiction over where the service was rendered — Sindh's SRB, Punjab's PRA, Khyber Pakhtunkhwa's KPRA, Balochistan's BRA, or ICT for Islamabad (administered by FBR under a separate ordinance). A business paying for both goods and services on the same invoice may need to apply two different withholding rules to the two components.
Depositing what you withhold
A withholding agent must deposit the amount withheld directly with the relevant authority (not the supplier) by the prescribed due date, and issue a withholding tax certificate to the supplier so the supplier can claim credit for it. Failing to withhold, or withholding but not depositing on time, can expose the withholding agent itself to penalties and default surcharge, separate from any liability of the supplier.
Worked Example: Withholding on a Registered Supplier's Invoice
A registered, ATL-active supplier issues a Rs. 200,000 goods invoice with 18% GST shown separately.
The supplier still owes and deposits the remaining 4/5th (Rs. 28,800) through its own sales tax return. If the same supplier were a wholesaler/dealer, only 1/10th (Rs. 3,600) would be withheld instead of 1/5th.
Frequently Asked Questions
What is sales tax withholding, and who does it?
It's a mechanism where the person paying an invoice (the withholding agent, usually a company or government body) deducts a portion of the sales tax shown on that invoice and deposits it directly with FBR or the relevant provincial revenue authority, instead of paying the full tax amount to the supplier. The supplier gets credit for the withheld amount against its own return.
Why is only 1/5th (20%) withheld instead of the full tax?
The general rule assumes a registered, ATL-active supplier will file its own sales tax return and remit the rest of the tax itself, so only a portion is collected upfront as a compliance check. When the supplier is unregistered or not ATL-active, there's no such return to rely on, so the withholding agent collects the full 100% instead.
How does withholding work when the supplier is unregistered?
An unregistered supplier can't issue a proper tax invoice showing sales tax as a separate line, so the amount they charge is treated as already including tax. The tax portion is extracted using the tax fraction — rate ÷ (100 + rate) — and the whole of that extracted amount is withheld, with the supplier's CNIC/NTN typically recorded on the transaction.
Which categories don't follow the standard 20%/100% rule?
A handful of categories are set at different rates by specific notifications: advertisement services are generally withheld in full regardless of registration status, federal wholesalers/dealers/distributors get a reduced 1/10th rate, and Punjab's telecom, banking and insurance sectors were brought into withholding at 80% from 10 July 2025. Select the correct category above to get the right rate automatically.
Is the withheld amount an extra cost, or is it already part of the invoice?
It's not an extra cost — it's a redirection of tax the supplier already owes. The buyer pays less to the supplier directly and pays that difference to the tax authority instead; the total amount leaving the buyer's account (net payment + tax deposited) is the same either way.