π΅π° Pakistan Income Tax Calculator
Salaried slabs for FY 2025-26, Finance Act 2025.
Estimated annual income tax
Estimates for planning only, not financial advice.
Pakistan taxes salaried individuals on progressive slabs under the Finance Act 2025, effective for FY 2025-26 (1 July 2025 to 30 June 2026). The first Rs 600,000 is tax-free, then rates step from 1% up to 35%, with a 9% surcharge on tax where taxable income exceeds Rs 10 million. On an annual salary of Rs 2,500,000, the tax is Rs 185,000, or about Rs 15,417 a month.
How to Use This Calculator
Enter your annual taxable salary, meaning gross salary minus exempt allowances and deductible items. The calculator applies each slab in turn and flags the surcharge at the top end.
Enter your annual taxable salary in rupees. If you think monthly, multiply by 12 first.
Read the annual tax, the monthly withholding equivalent, your marginal rate, and annual take-home.
Compare with your employer's monthly withholding. Big gaps usually mean allowances were treated differently, so reconcile before year-end. Our paycheck calculator turns the monthly number into a budget.
FY 2025-26 Salaried Slabs (Finance Act 2025)
The Finance Act 2025 cut rates at the lower and middle bands: the Rs 600,001 to 1,200,000 band fell from 5% to 1%, and the middle bands dropped several points each, while the top marginal rate stayed at 35%. Salary must be more than 75% of your taxable income for these salaried slabs to apply; mixed income gets apportioned.
Worked Example
Annual taxable salary of Rs 2,500,000. The first Rs 600,000 is free. The next Rs 600,000 at 1% adds Rs 6,000. The Rs 1,000,000 from 1.2M to 2.2M at 11% adds Rs 110,000. The Rs 300,000 from 2.2M to 2.5M at 23% adds Rs 69,000. Total: Rs 6,000 + Rs 110,000 + Rs 69,000 = Rs 185,000 for the year, or Rs 15,417 a month, leaving Rs 2,315,000 take-home. The marginal rate is 23%, so a Rs 100,000 raise keeps Rs 77,000 of itself.
What Lowers the Bill Legally
Three levers matter. First, exempt allowances: conveyance, medical, and special allowances have exempt portions that never enter taxable salary, so make sure payroll classifies them correctly. Second, deductible contributions and donations: approved pension contributions and charitable donations to specified institutions reduce taxable income. Third, timing: if a bonus can legitimately fall in either tax year, the slab math decides which year costs less.
My honest view: most salaried Pakistanis overpay through payroll misclassification, not through the slabs themselves. Reconcile your Form 16 equivalent against this math every June. If withholding exceeded the actual liability, the refund is yours to claim, and the FBR's IRIS portal processes filer returns far faster than non-filer ones. Becoming a filer also cuts withholding rates on banking transactions and vehicle purchases, which is real money beyond income tax.
Estimates for planning only, not financial advice.
Frequently Asked Questions
What are Pakistan's salaried tax slabs for FY 2025-26?
Up to Rs 600,000 tax-free; 1% on Rs 600,001 to 1.2M; Rs 6,000 plus 11% on Rs 1.2M to 2.2M; Rs 116,000 plus 23% on Rs 2.2M to 3.2M; Rs 346,000 plus 30% on Rs 3.2M to 4.1M; and Rs 616,000 plus 35% above Rs 4.1M. A 9% surcharge applies on the tax where taxable income exceeds Rs 10M.
What changed in the Finance Act 2025?
Rates fell at the lower and middle bands: the Rs 600,001 to 1.2M band dropped from 5% to 1%, and middle bands fell from 15% to 11% and 25% to 23%. The top marginal rate stayed at 35%, and the surcharge on very high salaried incomes fell from 10% to 9%. Effective 1 July 2025.
What is the tax-free threshold in Pakistan?
Rs 600,000 a year, or Rs 50,000 a month, for salaried individuals. Below that, no income tax is due. The threshold has held steady while slabs above it were restructured.
Who counts as a salaried individual for these slabs?
The slabs apply where salary income is more than 75% of your taxable income. If business or other income dominates, different slab tables apply, and the salaried relief does not carry over.
What is the 9% surcharge?
An extra 9% charged on the computed tax, not on income, where a salaried person's taxable income exceeds Rs 10 million. On Rs 12M of income, the base tax is about Rs 3.38M and the surcharge adds roughly Rs 304,000.
How is the tax collected during the year?
Employers withhold under section 149 based on estimated annual salary, spreading it across pay periods. Banks, on certain transactions, withhold at different rates for filers versus non-filers, which is separate from salary withholding.
What reduces taxable salary legally?
Exempt portions of allowances, approved retirement contributions, and donations to specified charitable institutions. Keep documentation: FBR notices increasingly ask for proof of claimed deductions and exemptions.
Should I be a filer or non-filer?
A filer, almost always. Filing puts you on the Active Taxpayers List, which cuts withholding tax rates on cash withdrawals, vehicle purchases, property transactions, and profit on debt. The compliance cost is one return a year; the savings repeat on every transaction.
When is the Pakistan tax year?
1 July to 30 June. FY 2025-26 covers 1 July 2025 to 30 June 2026 and is called tax year 2026 in FBR terminology. Returns for salaried individuals are generally due September 30 after year-end.
Does this include provincial taxes?
No. This calculator covers federal income tax on salary only. Provincial sales tax on services, property taxes, and withholding on specific transactions are separate and vary by province.