Pakistan’s new social media income tax mechanism sets a fixed benchmark for YouTube earnings. The Federal Board of Revenue set a minimum benchmark of PKR 195, about $0.70, per 1,000 YouTube video views. Additionally, taxpayers can claim expenses up to 30% of their total revenue.

The FBR issued these rules through S.R.O. 642(I)/2026 and S.R.O. 1641(I)/2026. Together, the notifications set separate procedures for residents and non-residents earning money from social media platforms. Under this mechanism, officials calculate taxable income after deducting allowable expenses from total remuneration.

Expenses cannot exceed 30% of total revenue. The FBR bases total remuneration on whichever amount is higher. That means either the revenue the prescribed rate produces, or the actual remuneration a creator received, in cash or kind.

The PKR 195 rate applies specifically to YouTube videos. Officials may revise it periodically, according to the notification. However, taxpayers who believe their actual earnings are lower must submit evidence to satisfy the relevant tax commissioner.

The rules also draw a clear line between residents and non-residents. S.R.O. 1641(I)/2026 covers resident persons who earn income through interaction with users in Pakistan. Meanwhile, S.R.O. 642(I)/2026 applies to non-residents whose Pakistani income counts as Pakistan-source income under the Income Tax Ordinance, 2001.

Furthermore, the rules set a specific threshold for non-residents. A non-resident falls within scope if their user base exceeds 50,000 in a tax year or 12,250 in a single quarter. This threshold determines whether their activity counts as systemic and continuous business solicitation through digital means.

People subject to these rules must pay advance income tax every quarter. Therefore, officials calculate the tax using the prescribed formula. Taxpayers then pay it under Section 147 of the Income Tax Ordinance, 2001.

Creators must also declare this income separately in their annual tax return. Still, the tax commissioner can amend a return and recover tax if the income falls short of the benchmark.

The FBR defines a social media platform as an internet-based service built mainly for user interaction and content sharing. Economic value on these platforms comes from engagement and network effects. Similarly, social media content means digital material whose value comes from audience reach and platform distribution.

Content that generates remuneration in any form falls under this rule. The social media income tax rules also work alongside the rest of the Income Tax Ordinance. Finally, officials issued the amendments under Section 99C and other relevant provisions of the ordinance.