Understanding PSX Commission Slabs and Trading Costs

What Are Commission Slabs on the Pakistan Stock Exchange?

When you buy or sell shares on the Pakistan Stock Exchange (PSX), you pay a commission to your broker for executing the trade. This commission is not a flat fee — most PSX brokers use a slab-based commission structure, where the rate varies depending on the value or quantity of shares traded.

Understanding your broker's commission structure is essential for accurate P&L calculation. If you don't account for commissions properly, you'll overestimate your profits and underestimate your losses.

Types of PSX Commission Structures

PSX brokers typically use one of two commission models:

1. Per-Share Commission Slabs

You pay a fixed amount per share traded, with different rates for different share price ranges. For example:

• Shares priced PKR 0 – 50: PKR 0.02 per share
• Shares priced PKR 51 – 100: PKR 0.05 per share
• Shares priced PKR 101 – 500: PKR 0.15 per share
• Shares priced above PKR 500: PKR 0.30 per share

This structure is common with traditional PSX brokers. The effective commission rate (as a percentage of trade value) is higher for low-priced stocks.

2. Percentage-of-Value Commission Slabs

You pay a percentage of the total trade value, with different rates for different trade sizes. For example:

• Trade value PKR 0 – 500,000: 0.25% of trade value
• Trade value PKR 500,001 – 2,000,000: 0.20% of trade value
• Trade value above PKR 2,000,000: 0.15% of trade value

Many modern and online brokers use this model. Larger trades get a lower effective commission rate.

Other PSX Trading Charges You Must Account For

Broker commission is only part of your trading cost. PSX trades also incur several regulatory charges:

• Central Depository Company (CDC) Charges: CDC is Pakistan's securities depository. It charges a small fee for settling share transfers on each trade, typically PKR 5–10 per transaction or a small percentage of trade value.
• Pakistan Stock Exchange (PSX) Fee: A regulatory fee charged by the exchange itself, typically 0.002%–0.005% of trade value.
• Securities and Exchange Commission of Pakistan (SECP) Levy: A regulatory levy of approximately 0.0005% of trade value.
• Withholding Tax (WHT): For filers, WHT on commission is 12%. For non-filers, it can be up to 15%. This is deducted from your broker commission, not from your trade proceeds directly.
• Sales Tax on Commission (where applicable): Some brokers charge sales tax on their commission in certain provinces.

How Commission Affects Your Real Break-Even Price

Let's say you buy 1,000 shares of a PSX stock at PKR 100 per share. Your raw investment is PKR 100,000. But with a 0.25% commission, you pay PKR 250 in brokerage fees. Your actual cost is PKR 100,250 — meaning your break-even price is PKR 100.25, not PKR 100.

This matters most for short-term traders who are trying to profit from small price moves. If a stock needs to move 2% to be profitable but you're paying 0.50% round-trip in commissions (buy + sell), your effective profit target is only 1.5%.

Configuring Commission Slabs in PSX PORTFOLIOS

PSX PORTFOLIOS lets you configure your exact broker commission structure so every trade deducts the correct fees automatically:

1. Go to Settings in the navigation menu.
2. Click Add Slab under Commission Slabs.
3. Choose the slab type: Per Share or Percent of Value.
4. Enter the range (From / To) and the commission rate for that range.
5. Add as many slabs as your broker uses.

Once configured, every BUY and SELL trade you record will automatically deduct the correct commission, giving you an accurate average cost price and net P&L figure.

How to Find Your Broker's Commission Slab

Your broker is required by SECP to disclose their commission structure. You can find it:

• In your account opening agreement (look for the "Schedule of Charges" or "Commission Schedule" section).
• On your broker's official website under "Fees" or "Charges".
• By calling or emailing your broker's customer support directly.

If you're unsure, start with a 0.25% percentage-of-value slab — this is close to the average for most PSX online brokers and will give you a reasonable approximation until you get the exact figures.

Why Accurate Commission Tracking Matters

Investors who don't track commissions accurately often think they're more profitable than they are. Over a year of active trading, commissions can total 2–5% of your invested capital — a significant drag on returns that compounds over time.

By configuring accurate commission slabs in PSX PORTFOLIOS, you get a true picture of your net investment performance — not the gross figure that ignores the real cost of trading.