Changing jobs or holding two jobs: how salary tax goes wrong

Changing jobs mid-year is the most common cause of an incorrect salary tax position in Pakistan, and neither employer has done anything wrong. The mechanics of section 149 simply do not work when the taxpayer moves and the information does not travel with them.

Why it goes wrong

Section 149 requires an employer to project full-year taxable salary, compute the annual slab tax, and spread it across payroll months. The projection is made from what that employer pays. So when you work six months at one company and six at another:

• Employer A projects your salary with them as if it continued for twelve months.
• Employer B does the same with theirs.
• Neither figure is your actual annual taxable salary.
• Because the slabs are progressive, two understated annual projections each attract lower marginal rates than the true combined figure — or, where the second salary is much higher, the reverse.

Worked: the over-deduction case

Worked: the under-deduction case

Now reverse the salaries — six months at Rs 150,000 followed by six at Rs 450,000:

• Actual annual taxable salary: Rs 3,600,000. Correct annual tax: Rs 416,000.
• A projects Rs 1,800,000, annual tax Rs 72,000, deducts half: Rs 36,000.
• B projects Rs 5,400,000, annual tax Rs 917,000, deducts half: Rs 458,500.
• Total deducted: Rs 494,500 — an over-deduction of Rs 78,500 in this configuration.

The fix: the certificate chain

A new employer can compute correctly if it has the previous employer numbers. The sequence:

1. On leaving, request the salary and tax deduction certificate for the part-year. Ask before your last day, while you are still on the system.
2. Check the figures against your payslips — salary paid, benefits valued, tax deducted year to date.
3. Give it to the new employer before the first payroll run, not at year end.
4. The new employer then projects using actual salary to date plus its own remaining months, and subtracts the tax already deducted.

Done properly, the deduction across the year lands close to correct and there is no material balance at filing. Employers should treat requesting this certificate as part of onboarding — see payroll compliance.

Holding two jobs at once

Concurrent employment is harder because there is no certificate chain to fix it. Both salaries are aggregated into one annual figure and the slabs applied once, but each employer withholds in isolation.

Practical approach:

• Compute your own correct annual liability on the combined figure early in the year.
• Compare it to what the two employers will collectively deduct.
• Set the difference aside monthly, because it will fall due at filing.
• Keep both certificates, since you will need both to evidence the credits.

What to hand over and collect when you move

Treat the job change as a document exchange rather than a clean break. Before your last day:

• Request the salary and tax deduction certificate covering the part-year, and check it against your payslips — salary paid, benefits valued, tax deducted to date.
• Download your payslips while you still have system access. Obtaining them after your account is deactivated is slow and sometimes impossible.
• Confirm the final settlement computation. A leaver should be taxed on actual part-year salary, not on the original twelve-month projection — ask for the recomputation if the final payslip looks like a normal month.
• Note any benefit that ceased mid-year, since its valuation should be prorated rather than counted for a full year.

Then give the certificate to the new employer before the first payroll run. Employers who ask for it at onboarding rather than at year end avoid the whole problem — see payroll compliance.

Settling it at filing

Whatever the direction, the return is where it resolves:

1. Declare total salary from all employers as one figure under the salary head.
2. Claim tax deducted from every certificate, and verify each appears against your registration in FBR records.
3. Compute the correct annual tax on the combined figure.
4. Pay any shortfall, or claim the excess — refunds.

Section 149 deduction is adjustable, so an over-deduction is genuinely recoverable — but only through a filed return with the certificates attached. People who change jobs and do not file simply leave the money behind. See the filing sequence.

Sources

This guide is written against the official and clearly labelled professional references below. Rates, thresholds and portal procedures change between reviews, so open the primary source before relying on a figure.

• Income Tax Basics (FBR)
• Withholding Tax Rate Cards (FBR)
• File an Income Tax Return (FBR)

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