Guide
How Income Tax on Salary Is Calculated in Pakistan (Tax Year 2027)
Salary tax in Pakistan is worked out on your yearly taxable salary using eight slabs. Here is the full table for tax year 2027, the simple formula behind it, worked examples for common monthly salaries, and the mistakes that make estimates wrong.
Published
Which year these rates apply to
Pakistan’s tax year runs from 1 July to 30 June and is named after the year it ends in. Tax year 2027 is 1 July 2026 to 30 June 2027, which people often call 2026-27. The rates below come from the Finance Act 2026, in force from 1 July 20261.
They apply to salaried individuals: people whose salary is more than 75% of their taxable income3. If a large part of your income comes from a business, rent or other sources, a different table applies.
Salary tax slabs for tax year 2027 (2026-27)
| Yearly taxable salary (Rs) | Tax | Roughly per month (Rs) |
|---|---|---|
| Up to 600,000 | 0% | Up to 50,000 |
| 600,001 – 1,200,000 | 1% of the amount above 600,000 | 50,001 – 100,000 |
| 1,200,001 – 2,200,000 | 6,000 + 11% of the amount above 1,200,000 | 100,001 – 183,333 |
| 2,200,001 – 3,200,000 | 116,000 + 20% of the amount above 2,200,000 | 183,334 – 266,667 |
| 3,200,001 – 4,100,000 | 316,000 + 25% of the amount above 3,200,000 | 266,668 – 341,667 |
| 4,100,001 – 5,600,000 | 541,000 + 29% of the amount above 4,100,000 | 341,668 – 466,667 |
| 5,600,001 – 7,000,000 | 976,000 + 32% of the amount above 5,600,000 | 466,668 – 583,333 |
| Above 7,000,000 | 1,424,000 + 35% of the amount above 7,000,000 | Above 583,333 |
The same eight slabs appear in FBR’s withholding tax rate card for tax year 20272. FBR has also confirmed that the 9% surcharge on salaried individuals was withdrawn for this year4, so no surcharge is added to the figures here.
The fixed amounts are not extra charges. Each one is simply the full tax on all the slabs below: for example, Rs 116,000 is 1% of Rs 600,000 (Rs 6,000) plus 11% of Rs 1,000,000 (Rs 110,000). That is why only the amount above the slab’s start is taxed at the higher rate.
How to calculate your salary tax, step by step
- Start with your taxable monthly salary: gross salary minus any amounts that are exempt from tax. Your payslip or HR department can tell you which allowances are exempt.
- Multiply by 12 to get your yearly taxable salary.
- Find your slab in the table above.
- Subtract the slab’s starting point from your yearly salary, and multiply the result by the slab’s rate.
- Add the slab’s fixed tax. This is your yearly tax.
- Divide by 12 to get the monthly tax your employer would normally deduct.
The Salary Income Tax Calculator does these steps for you, shows each line of the working, and marks your slab in the full table.
Worked examples for common monthly salaries
| Monthly taxable salary (Rs) | Yearly tax (Rs) | Monthly tax (Rs) | Share of salary |
|---|---|---|---|
| 50,000 | 0 | 0 | 0% |
| 100,000 | 6,000 | 500 | 0.50% |
| 150,000 | 72,000 | 6,000 | 4.00% |
| 250,000 | 276,000 | 23,000 | 9.20% |
| 300,000 | 416,000 | 34,666.67 | 11.56% |
| 700,000 | 1,914,000 | 159,500 | 22.79% |
Common mistakes that make an estimate wrong
- Applying your slab’s rate to all your income. At Rs 300,000 a month your top rate is 25%, but tax is 11.56% of your salary overall, because lower slabs are taxed at lower rates.
- Using gross instead of taxable salary. Exempt amounts are left out before the table is applied, so using gross salary overstates the tax.
- Using last year’s table. Slabs change with each Finance Act. Check that a calculator or article says tax year 2027 (2026-27) and cites the Finance Act 2026.
- Expecting every month’s deduction to match. A bonus, arrears or a mid-year pay change can change what your employer deducts in a given month.
- Forgetting the 75% rule. If salary is 75% or less of your taxable income, this table does not apply to you.
What this calculation does not include
The table gives the tax on taxable salary. It does not work out which allowances are exempt, and it leaves out tax credits, reductions and deductions (such as Zakat or pension contributions), tax on other income such as profit on savings or rent, and advance taxes collected elsewhere, such as on some utility bills. These are settled when you file your return, so your final tax can differ. For anything beyond an estimate, check with FBR or a tax adviser.
Common questions
How much tax is deducted from a salary of Rs 100,000 a month?
Rs 1,200,000 a year sits at the top of the 1% slab, so tax is 1% of Rs 600,000 = Rs 6,000 a year, or Rs 500 a month, if the whole Rs 100,000 is taxable.
Is a salary of Rs 50,000 a month taxable?
Not under this table. Rs 50,000 a month is Rs 600,000 a year, which is the top of the 0% slab. Tax starts only on income above Rs 600,000 a year.
Is there a surcharge on high salaries in 2026-27?
No. FBR’s circular on the Finance Act 2026 confirms that the 9% surcharge on salaried individuals was withdrawn for tax year 20274.
Why is my employer deducting a different amount?
Employers spread the expected yearly tax over the year and adjust it when your pay changes, for example after a bonus or arrears. They may also take exempt allowances or credits into account. Ask your payroll team for the working if the difference is large.
Sources
- Finance Act, 2026 (Act No. XLIII of 2026), Gazette of Pakistan, 26 June 2026 (FBR) — the eight-slab rate table for salaried individuals (First Schedule, Part I, Division I, clause (2)) and commencement on 1 July 2026.
- FBR: Withholding Tax Rates Card, tax year 2027 — the same salary slabs under section 149, as updated for the Finance Act 2026.
- FBR: Income Tax Ordinance, 2001 (amended up to 20.02.2026) — the salaried table applies where salary exceeds 75% of taxable income; the tax year runs from 1 July to 30 June.
- FBR: Circular No. 02 of 2026-27 (Income Tax), 8 September 2026 — confirms the revised salary rates and the withdrawal of the 9% surcharge on salaried individuals.