Salaried vs Business: Which Tax Regime is Better?

The headline difference

• Salaried individuals pay tax via withholding at source — your employer deducts it.
• Non-salaried / business individuals file on their own and have a slightly steeper slab schedule.

When is salaried better?

If your only income is salary and you have predictable monthly inflows, the salaried regime is simpler and your employer handles compliance.

When is business better?

Freelancers, consultants, and shop owners typically benefit because:

• They can deduct legitimate business expenses
• IT exporters get a 0.25% final tax under certain conditions
• Capital outlay can be depreciated

Always keep clean records — FBR audits look at proof of expense, not narration.

Use Income Tax Calculator for either regime.