Overview
At the close of every financial year (30 June in Pakistan), employers are legally required under the Income Tax Ordinance 2001 to issue each employee a certificate showing total salary paid and withholding tax (WHT) deducted during the year. Octal HR generates these certificates automatically from finalised payroll runs — no manual spreadsheet work required.
FBR terminology: The certificate is commonly called Form 16 or the IT-2 Certificate. Octal HR labels it "Annual Tax Certificate" and formats it to match FBR's prescribed layout.
Who needs a certificate?
Every employee who was on payroll at any point during the financial year requires a certificate — including those who resigned mid-year or were terminated. Employees with zero WHT still receive a certificate showing NIL deduction.
| Employee status | Certificate required? | Notes |
|---|---|---|
| Active at year-end | Yes | Standard full-year certificate |
| Resigned mid-year | Yes | Covers Jan–Jun or Jul–Dec period on payroll |
| Income below tax threshold | Yes | Shows NIL deduction |
| Contract / part-time | Yes | Only if paid through payroll |
| Paid via vendor invoice only | No | Handled by accounts, not HR |
What the certificate contains
Octal HR populates the certificate automatically from payroll data:
- Employer details — Company name and NTN (the NTN field is blank unless configured)
- Employee details — Full name, NTN, and CNIC (from the employee's tax profile)
- Period — the selected financial year (1 July to 30 June in Pakistan)
- Total gross salary — Sum of all earnings across the year
- Taxable salary — Gross less exempt allowances
- Total WHT deducted — with a month-by-month breakdown
Employer NTN: The employer NTN prints only if it has been configured; if it is not set, the field is left blank on the certificate.
Generate a certificate for one employee
| Total gross salary paid | PKR 1,800,000 |
| Exempt allowances (medical + conveyance) | − PKR 180,000 |
| Taxable annual income | PKR 1,620,000 |
| Total WHT deducted (12 months) | PKR 57,000 |
Generate a certificate only after the relevant payroll runs for the financial year are finalised. The figures are read from finalised payslips, so any months not yet run will not be included.