At the end of each fiscal year, every employer in Pakistan must issue a salary tax certificate to each salaried employee. The certificate is what the employee uses to file their annual tax return in IRIS. If the format is right, year-end goes smoothly. If it is wrong, the same error ends up in every employee's return. Below is the format and what it needs to contain for 2026.

What the salary tax certificate must include

1. Employer details

Employer name + NTN
Employer address
Tax year

2. Employee details

Employee name + CNIC + NTN
Employee address (last known)
Period of employment in the fiscal year

3. Salary income breakdown

Basic salary (annual)
HRA
Conveyance allowance
Medical allowance
Utilities allowance
Bonus / commission / arrears
Leave encashment (if any)
Final settlement payments (if employee left mid-year)
Other allowances
Perquisites (valued)

4. Taxable vs exempt portions

For each allowance line, what portion is taxable vs exempt per Ordinance rules.

5. Total taxable income

Sum after exemptions.

6. Tax credits applied (if any)

Investment in approved schemes
Donations to approved charities
Insurance premium
Education expenses

7. Tax calculated

Per progressive slabs.

8. Tax withheld and deposited

Section 149 (salary WHT) total withheld
Section reference for each withholding
Tax deposited to FBR (challan numbers / dates)

9. Issuing employer authorisation

Authorised signatory name + designation
Date of issue
Company stamp

When to issue

By the end of the fiscal year (June 30), or within a reasonable period after that, usually by August / September
For employees who leave mid-year: within a reasonable period of exit
The annual tax filing deadline is usually late September, so employees need the certificate well before then

How employees use it

Receive certificate from employer
Cross-check the salary income breakdown
Use as the basis for filing annual return in IRIS
Retain for records (FBR can ask for it during audit)

Common employer mistakes

Not issuing the certificate at all
Issuing it late, so employees miss the filing window
Wrong total taxable income (calculation errors)
Missing tax-exempt portion identification
Wrong WHT total (mismatched with actual deposits)
Not issuing for employees who left mid-year

The format itself

FBR provides a recommended format for the salary tax certificate. Most companies use this or a similar layout. Some use their own letterhead with the same content. The content matters more than the exact layout.

For employees with multiple employers in a year

If an employee worked for two employers in the same fiscal year, each issues a certificate for their respective period. The employee combines both when filing their annual return.

For employees with very low income

Even if the employee is below the taxable threshold, issue the certificate anyway. It serves as a record, and the employee may still file a return.

Why the audit trail matters

The salary tax certificate is the document FBR uses to verify employer-employee tax compliance. Mismatches between:

Certificate amount vs employee return
Certificate WHT vs employer's WHT deposits
Certificate total vs salary income data

Any of these can lead to an audit of the employer, the employee or both.

How payroll software generates it

A good HR / payroll system will:

Add up the full year's salary data for each employee
Apply the right exemptions
Check the figures against WHT deposits
Produce the certificate in the recommended format
Send it to the employee digitally (email / mobile app)
Save it in the employee record and audit trail

Salary certificates in Zaffre HRM

Zaffre HRM generates salary tax certificates at year-end (or on demand for mid-year leavers) with full breakdown, exempt vs taxable, WHT details, and digital delivery to employees. See: FBR WHT guide.

Book a demo.

A note of caution

Salary certificate format and required contents may evolve with FBR notifications. Check the current FBR requirements before you rely on this, and speak to a tax practitioner about specific cases.

FBR Salary Certificate Format Pakistan: What Employers Must Issue