HMRC subsistence rates for Pakistan are published for four cities only: Karachi, Lahore, Peshawar and Quetta. They are benchmark figures a UK employer can pay tax- and NIC-free for meals, drinks and a hotel room without checking every receipt, provided it can show the employee was on qualifying business travel. The figures are in Pakistani rupees, except Lahore’s room rate, which HMRC sets in US dollars. Islamabad has no entry of its own, so an employer has to pick the closest listed city. And the rates do not pay for getting from the airport to the hotel or from one city to another. Ground transport is claimed on actual cost, which means the receipt from your driver matters far more than most travellers expect.
The decision in brief
- Meals, drinks and room: use the HMRC benchmark for the nearest listed Pakistani city, or reimburse actual receipted costs. Pay above the benchmark and the excess is taxable.
- Airport transfers, intercity cars, tolls, fuel for hired vehicles: reimbursed on actuals. Keep a dated receipt that shows the route, the amount and the currency.
- Currency: convert with one documented rate and say which one. HMRC’s monthly rate is the easiest to defend for a UK payroll; the State Bank of Pakistan publishes a daily USD/PKR reference.
HMRC subsistence rates Pakistan: the current city figures
HMRC lists the overseas benchmarks on a single GOV.UK guidance page, Expenses rates for employees travelling outside the UK. The publication behind it was last updated on 14 August 2026. The Pakistan block reads as follows. All amounts are Pakistani rupees unless marked otherwise.
| Rate type | Karachi | Lahore | Peshawar | Quetta |
|---|---|---|---|---|
| Over 5 hours | 1,451.50 | 1,630.50 | 1,046 | 1,140 |
| Over 10 hours | 3,515 | 4,278 | 2,544 | 2,807.50 |
| 24-hour rate (plus room rate) | 4,233.50 | 5,069.50 | 3,348.50 | 3,599.50 |
| Room rate | 16,001.50 | 173 US dollars | 15,072.50 | 13,263.50 |
| Breakfast | 0 (in room rate) | 0 (in room rate) | 0 (in room rate) | 0 (in room rate) |
| Lunch | 1,281.50 | 1,356.50 | 895 | 1,017.50 |
| Dinner | 1,894 | 2,374 | 1,347.50 | 1,545 |
| Drinks | 339.50 | 547.50 | 301.50 | 245 |
| Hotel to office | 718.50 | 791.50 | 804.50 | 792 |
HMRC revises these tables, so check the GOV.UK page before you run a claim and keep a dated copy of the version you relied on.
Two quirks deserve attention. Lahore’s room rate is the only Pakistani figure in dollars, so a Lahore claim can involve two currencies before sterling enters the picture. And breakfast is shown as zero everywhere because HMRC treats it as part of the room rate.
Safety note on two of the four cities
Peshawar and Quetta appear in HMRC’s table, but the UK Foreign, Commonwealth & Development Office currently advises against all travel to Peshawar, including the city itself, and to Balochistan province, where Quetta sits. The FCDO also warns that travel insurance can be invalidated if you travel against its advice. A published subsistence rate is a tax figure, not a signal that a trip is sensible. If your organisation does send staff to either city under that advice, treat it as specialist security travel with its own planning, not a routine claim.
What the HMRC worldwide subsistence rates cover, and what they leave out
The HMRC worldwide subsistence rates are a ceiling for tax-free subsistence, not an entitlement. HMRC’s Employment Income Manual at EIM05250 sets the ground rules: payments at or below the published rate are free of tax and National Insurance; anything above it is taxable; and the employer must be satisfied, and keep evidence, that the employee was on qualifying travel outside the UK. No HMRC approval notice is needed to use the published figures.
The scale rate payments guidance adds the practical point finance teams like: as long as the employee has actually spent the money on business expenses, the employer does not have to inspect every receipt and can check a sample instead. Employers who prefer not to use benchmarks can reimburse actual vouched costs, or apply to HMRC for a bespoke rate.
How the time bands work
- Over 5 hours and over 10 hours cover day trips or the first and last partial days of a stay.
- 24-hour rate covers a full day away and is paid plus the room rate when the employee pays for the hotel.
- Meal-by-meal rates (lunch, dinner, drinks) let an employer strip out a meal that a host or conference already provided. HMRC’s worked examples at EIM05280 deduct the dinner rate where a host provided dinner, and also show the nearest-listed-city rule in action.
The line worth reading twice: “Hotel to office”
Add up Karachi’s lunch, dinner, drinks and hotel-to-office figures and you get 4,233.50 rupees, which is precisely the 24-hour rate; HMRC’s own table labels that sum the “total residual”. The same holds for the other three cities. In other words, the 24-hour benchmark already contains a small allowance for the daily hop between the hotel and the place of work.
That has a consequence for your claim. If an employee takes the full 24-hour rate and also claims the actual cost of a chauffeur-driven car to the same office every morning, the employer is arguably paying for one journey twice. There are two tidy ways to handle it:
- Pay the 24-hour rate and treat routine hotel-to-office rides as covered by it; or
- Pay meals and drinks at the component rates, drop the hotel-to-office element, and reimburse the actual car cost against a receipt.
Neither is a rule HMRC spells out in those words. It is simply what the arithmetic of the table implies, and a written company policy that picks one approach will save an argument at year end.
What sits outside the benchmarks altogether
The benchmarks are about accommodation and subsistence. They do not pay for the flight, the airport transfer, an intercity car from Lahore to Islamabad, motorway tolls, parking or a driver retained for the day. Those are travel costs, reimbursed at what they actually cost and supported by evidence. GOV.UK’s page on tax relief for travel and overnight expenses lists public transport, tolls and parking among the qualifying costs, with ordinary commuting excluded unless the employee is travelling to a temporary workplace.
Islamabad is not on the list: choosing the right city
Most UK business trips to Pakistan touch Islamabad, and HMRC gives it no rates of its own. The guidance is short: where a place is not shown, use the rates for the closest city shown for that country.
On a map, Peshawar is the nearest listed city. The M-1 motorway linking Peshawar with the Islamabad-Rawalpindi area is about 155 km, while the M-2 to Lahore runs roughly 375 km. So a literal reading points to Peshawar’s figures, which happen to be the lowest of the four for meals. That creates an awkward outcome: the benchmark tied to a city the FCDO advises against visiting becomes the yardstick for trips to the capital.
Employers deal with this in different ways, and you should follow your own payroll adviser rather than a blog. Sensible options include:
- applying the Peshawar figures to Islamabad days because that is the plain reading of HMRC’s wording;
- reimbursing actual, receipted meal and hotel costs for Islamabad instead of any benchmark; or
- asking HMRC for a bespoke rate if the organisation sends people to Islamabad often.
Whichever you pick, note it on the claim. “Islamabad days reimbursed at the nearest listed city (Peshawar) per HMRC guidance” is the kind of sentence an auditor reads once and moves on from.
Overseas travel expense claim receipts: the transport side
Meal allowances rarely cause trouble. Ground transport in Pakistan does, because so much of it is paid in cash, in rupees, to a driver who may not issue anything more than a handwritten slip. A claim reviewer in Manchester has no way to tell whether “Rs 12,000 car” meant a return airport run or a day of personal errands. The fix is to decide, before you fly, what evidence each journey will produce.
Airport transfers
The arrival transfer is the ride most likely to be cash-in-hand and least likely to be documented, because you are tired and the driver is already loading bags. Book it in advance with a provider that issues a written confirmation and a receipt tied to your flight and pick-up address. iDrive has dedicated pages for Karachi airport transfers and Lahore airport transfers, and Islamabad airport works the same way.
Intercity cars and driver days
A Lahore-to-Islamabad transfer or a car retained for a day of site visits is a bigger number and gets more scrutiny. The receipt should make the business purpose obvious from the route alone: origin, destination, date, and ideally the address of the client or site. If one car did several legs in a day, list them. “Hotel, Gulberg to client office, DHA Phase 5; return 18:30” is far easier to approve than “Local, full day”.
Motorway tolls
On the M-2 between Lahore and Islamabad, tolls have been collected through the M-Tag system since December 2021, so there is often no paper ticket for the traveller. If your hired car’s operator pays the tolls, ask for them to be shown as a separate line on the transport receipt, or confirm in writing that the quoted amount includes them. Tolls are a legitimate travel cost, but an unexplained lump is the first thing a reviewer queries.
Ride-hail and street taxis
App rides produce a digital receipt, usually enough if it shows date, route and amount. A cash street taxi rarely produces anything, so write a same-day note of date, route, amount and reason, and expect it to count as weaker evidence.
What a taxi receipt for expense claim purposes must show
Finance teams do not need a beautiful document. They need one that answers six questions without anyone having to email you. Use this as a checklist when you receive any transport receipt in Pakistan:
- Who issued it. The operating company’s name, and a contact address or number. A driver’s first name alone does not count.
- A unique reference. A booking or receipt number lets the employer check it was not claimed twice.
- Date and time of travel, not only the date of payment. Advance bookings are often paid days before the journey.
- The route. Pick-up and drop-off points in words a stranger can follow: terminal, hotel, office, city.
- The amount and its currency. “3,500” with no currency symbol is a problem when the same claim holds pounds, dollars and rupees.
- What was paid and how. Paid in full, part-paid or unpaid; card, bank transfer or cash. A quote or confirmation is not proof of payment.
Sales tax on the receipt
UK travellers often ask whether a Pakistani receipt needs a VAT number. The closer Pakistani equivalent is sales tax, and since the 18th Amendment, sales tax on services has been a provincial matter, administered by bodies such as the Punjab Revenue Authority and the Sindh Revenue Board, with Islamabad Capital Territory under its own ordinance. For a UK employee’s expense claim, the tax line matters less than the six points above: the employer reimburses the gross amount actually paid. Recovering any overseas tax is a question for the organisation’s tax adviser, not the claim form.
Converting rupee amounts for the claim
Currency is where a clean claim tends to stall, usually not because the maths is wrong but because nobody can tell which rate was used. Pick one source, apply it consistently across the claim, and write it down.
| Rate source | What it is | Best used for | Watch out for |
|---|---|---|---|
| HMRC monthly exchange rates | Currency units per £1, published on the penultimate Thursday and applying for the following calendar month | UK payroll and expense policies that want one defensible figure per month | A single rate for the month, so it will not match what your card was charged on the day |
| Your card or bank statement | The sterling amount actually debited, including any foreign-transaction fee | Card payments, where the employee should be made whole for what left their account | Statements arrive late; attach the line, not a screenshot of a total |
| State Bank of Pakistan reference | Daily USD/PKR revaluation and weighted-average rates | Converting Lahore’s dollar room rate to rupees, or checking a dollar invoice | It gives dollars to rupees, not pounds, so it is a middle step rather than the answer |
HMRC’s rates sit on the trade tariff exchange rates service. For September 2026 it listed the Pakistani rupee at 376.2728 to the pound, valid from 1 to 30 September. The State Bank of Pakistan’s published USD/PKR rates showed a revaluation rate of 277.1735 on 24 September 2026. Both change, so check them for your own travel dates.
A worked example
Example only, using the figures above; your rates and dates will differ. An employee spends three full days in Karachi in September 2026 and pays for the hotel.
- 24-hour subsistence: 3 × 4,233.50 = Rs 12,700.50, which is £33.75 at 376.2728.
- Room benchmark: 3 × 16,001.50 = Rs 48,004.50, about £127.58. If the actual hotel bill is lower, many employers reimburse the lower actual figure.
- Airport transfers both ways: reimbursed at the receipted amount and converted at the same monthly rate, or at the card debit if paid by card.
Write the rate and its source at the foot of the claim: “PKR converted at HMRC monthly rate, September 2026, 376.2728 per £1”. One line, and the reviewer has nothing to ask.
When a receipt is not in rupees
Some operators serving overseas customers charge in pounds, dollars or dirhams while quoting the fare in rupees. That is fine for a claim as long as the document shows the currency actually charged and does not mix two currencies into one total. If the receipt says “fare Rs 3,500, charged in USD”, claim the dollar amount you were charged and convert that, not the rupee figure.
Business travel expenses in Pakistan: a claim pack that gets approved first time
Build the pack as you go rather than on the flight home. A folder per trip, split into three:
- Proof of the trip. The itinerary, the meeting invitation or site visit plan, and boarding passes. HMRC expects the employer to hold evidence of qualifying travel even when it pays benchmarks.
- Subsistence. Note which city’s rates you used, which days and which time bands. Flag any meals your host provided so the relevant component can be removed.
- Transport, one line per journey. Date, route, provider, reference, amount, currency, payment method, and a sterling figure with the rate used. Attach the receipt behind each line.
Two habits make this painless. First, book the rides that matter in advance so the receipt exists before you travel. Our business travel car service in Pakistan is built around that kind of planned itinerary: you send the airport, hotel and meeting addresses up front, so the journeys are described before anyone gets in a car. Second, keep the documents where you can find them later. Bookings made through an iDrive customer account can be found again from that account, and a paid booking has a downloadable PDF receipt, linked from the payment email and the receipt page, that states the booking reference and the amount in the currency actually charged.
If the visitor is a colleague or client arriving for meetings and you are arranging the ride from the UK, our sister service Pakistan Taxi has a practical walkthrough on pairing an airport pickup with a day of business meetings. Pakistan Taxi is an iDrive brand, and its guides are written for the passenger rather than the finance team.
Keep the pack for the full retention period. GOV.UK’s PAYE record-keeping guidance requires employers to hold records for three years from the end of the tax year they relate to, and many organisations keep expense evidence longer under their own policy.
One last trap: personal legs. A family visit squeezed in between meetings is a normal part of many trips, but its share of a driver day is not a business cost. Split it out yourself before someone else does. When you are ready to line up the journeys for your next trip, you can send your route and dates through the iDrive booking page, and mention at that stage the receipt details your finance team needs. Availability and the final price depend on the vehicle and dates, so treat any figure as provisional until your booking is confirmed.
Questions people ask
Are HMRC subsistence rates for Pakistan a maximum or an allowance?
They are a tax-free ceiling. An employer can pay up to the benchmark without tax or NIC, pay less, or reimburse actual receipted costs instead. Anything paid above the benchmark is taxable.
Which rate applies to Islamabad?
Islamabad is not listed. HMRC says to use the closest listed city in the same country, which on a map is Peshawar. Some employers reimburse actual costs for Islamabad instead; record whichever approach you use.
Do the benchmark rates include taxis or airport transfers?
Not beyond the small “hotel to office” element inside the 24-hour rate. Airport transfers, intercity cars and tolls are travel costs and are reimbursed on actuals against receipts.
Do I need receipts if my employer pays benchmark rates?
Not for every meal; HMRC lets employers check a sample. You still need evidence that the trip happened, and receipts for all transport claimed at actual cost.
