Pakistan Salary Tax Calculator2026-27FBR Tax Tool

How income tax is calculated on a salary in Pakistan (FY 2026-27)

Salary tax in Pakistan is not a single percentage taken off your payslip. Your employer first works out your annual taxable salary, applies the progressive slab rates announced in the Finance Act, adds any surcharge that applies to you, and then divides the result by the number of months left in the tax year. That monthly figure is withheld under section 149 of the Income Tax Ordinance 2001 and shown on your salary slip as income tax deducted at source. Because the slab rates are marginal, a raise that pushes you into a higher slab never reduces your net pay — only the income above each threshold is taxed at the new rate.

This page and the calculator above estimate that same calculation in seconds. The sections below explain what the numbers mean, which parts of a salary package are taxable, and how a filer and a non-filer end up with different deductions from the same gross salary.

Who pays income tax on salary

Every salaried resident individual whose annual taxable salary exceeds the exemption threshold is liable for income tax. Under the current Finance Act the first PKR 600,000 of annual taxable income is taxed at 0%, which for a straightforward salaried person is the same as a monthly salary of PKR 50,000. Above that threshold the marginal rates rise band by band to 35% on income above PKR 7 million a year, with no surcharge on salary income. Non-residents, and anyone with income from more than one source — salary plus freelance receipts, rent or business profit — should combine those amounts before comparing themselves with these slabs.

What counts as taxable salary

Taxable salary is wider than basic pay. It normally includes basic salary, dearness and house rent allowances, utilities, conveyance above the exempt limit, bonuses, commissions, arrears and the value of any benefit provided by the employer, such as a company-maintained car or interest-free loan. Certain receipts are treated separately or exempt within limits — gratuity and commutation of pension on retirement, employer contributions to a recognised provident fund, and specified medical allowances among them. When you type a figure into the calculator, use your gross taxable monthly salary, meaning the amount before tax but after removing anything your employer treats as exempt.

Worked example: PKR 100,000 per month

An annual taxable salary of PKR 1,200,000 falls in the second slab: 1% of the amount exceeding PKR 600,000. Tax for the year is therefore PKR 6,000, or roughly PKR 500 per month, leaving a net monthly salary of about PKR 99,500. The effective rate is 0.5% of gross salary, even though the marginal rate on the last rupee is 1%. This is the figure most people are surprised by: crossing PKR 600,000 a year does not trigger a large deduction, it only starts a very small one.

Worked example: PKR 250,000 per month

A salary of PKR 250,000 a month gives PKR 3,000,000 of annual taxable income. The first PKR 600,000 is exempt, the next PKR 600,000 is taxed at 1% (PKR 6,000), the PKR 1,200,001–2,200,000 band adds 11% of PKR 1,000,000 (PKR 110,000), and the remaining PKR 800,000 in the third band is taxed at 20% (PKR 160,000). Total tax is PKR 276,000 for the year — about PKR 23,000 a month and an effective rate of 9.2% of gross salary. Enter either amount in the calculator above to confirm the split line by line.

Filer or non-filer: why the deduction differs

Being on the Active Taxpayers List changes what is withheld from you, not the slab your income falls into. Employers deduct tax at a higher rate from employees who are not on the ATL, and the same pattern applies to most banking and property transactions. If you have filed a return for the last tax year and your name appears on the ATL, the standard slab rates apply. If you have never filed, expect a larger deduction from the same gross salary. Our filer vs non-filer guide explains the difference in withholding rates transaction by transaction.

Credits that reduce your final liability

The slab calculation gives your gross tax. Several tax credits are then subtracted from it: contributions to an approved pension fund, life insurance premiums, certain donations, and investment in a listed company or a new manufacturing unit, each with its own cap and conditions. Zakat deducted by your employer or bank is also adjusted. These credits lower the tax actually payable without changing the slab you are in, which is why two people with identical salaries can end up with different annual tax. The tax rebate calculator applies these adjustments to the figure you get here.

How this calculator estimates your tax

The tool annualises the monthly salary you enter, applies the current salaried slabs to that annual amount, divides the yearly tax by twelve, and reports the monthly deduction, the yearly total, your effective rate and your resulting take-home pay. It assumes a full twelve months of salary in the tax year, no other income and no additional credits. Joining mid-year, receiving a bonus, changing employers or holding more than one job will move the real figure, in which case your employer's annual projection under section 149 is the number that will actually be deducted.

Sources, updates and disclaimer

Slab rates, surcharge thresholds and exemption limits are taken from the Finance Act 2025 and the Federal Board of Revenue's published salaried tax table, and are reviewed whenever a finance bill or a supplementary budget changes them. Every result on this site is an educational estimate: it is not a tax return, a withholding certificate or professional advice. For a binding calculation, file through FBR IRIS or consult a tax practitioner. If you spot a rate that no longer matches the law, tell us through the contact page and it will be corrected.