Calculated using FBR Tax Year 2026-27 salaried slabs (effective July 1, 2026).
Pakistan Income Tax Slabs for Tax Year 2026-27
Following Budget 2026-27, presented on June 12, 2026, the government reduced income tax rates across four salary brackets, removed the 9% high-earner surcharge for salaried individuals, and raised the threshold for the top 35% rate from PKR 4.1 million to PKR 7 million. These slabs are effective from July 1, 2026 for Tax Year 2027.
| Annual Taxable Income (PKR) | Tax Rate |
|---|---|
| Up to 600,000 | 0% |
| 600,001 – 1,200,000 | 1% of amount exceeding 600,000 |
| 1,200,001 – 2,200,000 | PKR 6,000 + 11% of amount exceeding 1,200,000 |
| 2,200,001 – 3,200,000 | PKR 116,000 + 20% of amount exceeding 2,200,000 |
| 3,200,001 – 4,100,000 | PKR 316,000 + 25% of amount exceeding 3,200,000 |
| 4,100,001 – 5,600,000 | PKR 541,000 + 29% of amount exceeding 4,100,000 |
| 5,600,001 – 7,000,000 | PKR 976,000 + 32% of amount exceeding 5,600,000 |
| Above 7,000,000 | PKR 1,424,000 + 35% of amount exceeding 7,000,000 |
How is Income Tax Calculated on Salary in Pakistan?
FBR uses a progressive tax system — meaning each rate applies only to the portion of your income that falls within that specific bracket, not your entire salary. Your employer annualizes your monthly salary, applies the correct slab shown above, and then deducts an equal 1/12th share as withholding tax from your salary every month.
Example: If your monthly salary is PKR 150,000, your annual income is PKR 1,800,000. This falls in the 1,200,000–2,200,000 slab, so tax is:
Tax = 6,000 + 11% × (1,800,000 − 1,200,000)
Tax = 6,000 + 66,000 = PKR 72,000 per year (PKR 6,000/month)
What Counts as Taxable Salary Income?
Taxable salary generally includes your basic pay, allowances (medical, conveyance, house rent beyond exempt limits), bonuses, and commissions. Certain deductions — such as approved provident fund contributions, Zakat paid under the Zakat & Ushr Ordinance, and profit on debt for house loans from recognized institutions — can reduce your taxable income before slabs are applied.
Key Changes in Budget 2026-27
- Tax rates reduced across four income brackets (e.g. 23% → 20%, 30% → 25%).
- 9% surcharge on salaried individuals earning above PKR 10 million annually has been completely abolished.
- The top 35% bracket threshold increased from PKR 4.1 million to PKR 7 million per year.
- The old 35% flat top slab has been split into three separate bands: 29%, 32%, and 35%.
Frequently Asked Questions
Is this calculator applicable for freelancers and business income?
No. This calculator uses the salaried individual slabs. Non-salaried persons (freelancers, sole proprietors, business income) fall under a separate, generally higher FBR slab structure.
Do I need to be a Filer to use these tax rates?
Salary tax slabs apply equally whether you are a Filer or Non-Filer. However, being an Active Taxpayer (Filer) saves you money separately through lower withholding tax rates on banking transactions, property, and vehicle purchases.
When does the new tax year apply?
Tax Year 2026-27 slabs are effective from July 1, 2026 and apply to salary earned through June 30, 2027.
Disclaimer: This calculator provides an estimate based on published FBR salary tax slabs for Tax Year 2026-27 and is for general informational purposes only. Actual tax liability may vary based on individual allowances, deductions, and FBR notifications. For official filing, consult a registered tax practitioner or the FBR IRIS portal.