Karachi, April 20, 2025 – A new report from the Federal Tax Ombudsman (FTO) has highlighted that employees working on a daily wages basis are subject to income tax deductions under Section 149 of the Income Tax Ordinance, 2001. According to the FTO’s detailed analysis, the definition of salary under the Income Tax law includes any amount received by an employee from their employment. This encompasses not only regular pay but also other forms of remuneration such as leave pay, overtime, bonuses, commissions, gratuities, and work condition supplements. Therefore, daily wages employees fall under this broad definition, meaning they too are liable for tax deductions just like their permanent counterparts. The FTO report emphasized that all employees, regardless of their employment status—whether regular, temporary, contractual, or employed on daily wages—are entitled to be taxed as salaried individuals under Section 149. This provision ensures that employees working on a daily wages basis are treated equitably within the broader tax system. The recognition of daily wages…