1. Quick Summary & Statutory Tax-Free Limit (2026-27)
For Tax Year 2026-27 (covering the fiscal year 1 July 2026 to 30 June 2027), the Federal Board of Revenue (FBR) maintains the statutory basic exemption limit at PKR 600,000 per annum (equivalent to PKR 50,000 per month). If your total taxable salary is PKR 50,000 per month or below, your employer will deduct zero income tax.
2. Official FBR Salaried Tax Slabs (FY 2026-27 & Comparison)
Under the First Schedule of the Income Tax Ordinance, 2001 (as amended by Finance Acts), progressive income tax is levied on salaried individuals. Use the interactive schedule below to view the official 8-tier schedule or switch tabs to compare against previous fiscal years:
Official Pakistan Income Tax Slabs Schedule
| Slab | Annual Taxable Income | Monthly Salary Band | Tax Rate | Base Fixed Tax | FBR Statutory Calculation Formula |
|---|---|---|---|---|---|
| Slab 1 | Up to PKR 600,000 | Up to PKR 50,000 | 0% | PKR 0 | Nil (100% Tax-Free Exemption) |
| Slab 2 | PKR 600,001 – 1,200,000 | PKR 50,001 – 100,000 | 1% | PKR 0 | 1% of amount exceeding PKR 600,000 |
| Slab 3 | PKR 1,200,001 – 2,200,000 | PKR 100,001 – 183,333 | 11% | PKR 6,000 | PKR 6,000 + 11% of excess over PKR 1.2M |
| Slab 4 | PKR 2,200,001 – 3,200,000 | PKR 183,334 – 266,667 | 20% | PKR 116,000 | PKR 116,000 + 20% of excess over PKR 2.2M |
| Slab 5 | PKR 3,200,001 – 4,100,000 | PKR 266,668 – 341,667 | 25% | PKR 316,000 | PKR 316,000 + 25% of excess over PKR 3.2M |
| Slab 6 | PKR 4,100,001 – 5,600,000 | PKR 341,668 – 466,667 | 29% | PKR 541,000 | PKR 541,000 + 29% of excess over PKR 4.1M |
| Slab 7 | PKR 5,600,001 – 7,000,000 | PKR 466,668 – 583,333 | 32% | PKR 976,000 | PKR 976,000 + 32% of excess over PKR 5.6M |
| Slab 8 | Above PKR 7,000,000 | Above PKR 583,333 | 35% | PKR 1,424,000 | PKR 1,424,000 + 35% of excess over PKR 7.0M |
Employers estimate your annual gross salary, compute the annual tax under these 8 statutory slabs, and deduct exactly 1/12th each month.
A 10% surcharge applies directly to the computed tax liability for taxpayers whose annual taxable income exceeds PKR 10 Million.
3. Real Worked Examples (Full Bracket Breakdown)
To understand how progressive taxation works in practice, review the step-by-step bracket computations below:
Example 1: Monthly Salary of PKR 100,000 (PKR 1,200,000 / year)
Effective Rate: 0.50%• First PKR 600,000: PKR 0 (0% tax-free allowance)
• PKR 600,001 to 1,200,000: PKR 600,000 × 1% = PKR 6,000
Total Annual Tax = PKR 6,000 | Monthly Section 149 Tax = PKR 500 / month
Net Monthly Take-Home Pay: PKR 99,500 / month
Example 2: Monthly Salary of PKR 150,000 (PKR 1,800,000 / year)
Effective Rate: 4.00%• First PKR 600,000: PKR 0 (0% exempt)
• PKR 600,001 to 1,200,000: PKR 600,000 × 1% = PKR 6,000
• PKR 1,200,001 to 1,800,000: PKR 600,000 × 11% = PKR 66,000
Total Annual Tax = PKR 72,000 | Monthly Section 149 Tax = PKR 6,000 / month
Net Monthly Take-Home Pay: PKR 144,000 / month
Example 3: Monthly Salary of PKR 200,000 (PKR 2,400,000 / year)
Effective Rate: 6.50%• Base Tax up to PKR 2,200,000: PKR 116,000 (Slabs 1–3 combined)
• PKR 2,200,001 to 2,400,000: PKR 200,000 × 20% = PKR 40,000
Total Annual Tax = PKR 156,000 | Monthly Section 149 Tax = PKR 13,000 / month
Net Monthly Take-Home Pay: PKR 187,000 / month (Saves PKR 6,000/yr vs FY26 23% rate)
Example 4: Monthly Salary of PKR 250,000 (PKR 3,000,000 / year)
Effective Rate: 9.20%• Base Tax up to PKR 2,200,000: PKR 116,000
• PKR 2,200,001 to 3,000,000: PKR 800,000 × 20% = PKR 160,000
Total Annual Tax = PKR 276,000 | Monthly Section 149 Tax = PKR 23,000 / month
Net Monthly Take-Home Pay: PKR 227,000 / month
Example 5: Monthly Salary of PKR 300,000 (PKR 3,600,000 / year)
Effective Rate: 11.56%• Base Tax up to PKR 3,200,000: PKR 316,000 (Slabs 1–4 combined)
• PKR 3,200,001 to 3,600,000: PKR 400,000 × 25% = PKR 100,000
Total Annual Tax = PKR 416,000 | Monthly Section 149 Tax = PKR 34,666.67 / month
Net Monthly Take-Home Pay: PKR 265,333.33 / month
4. Monthly Salary Deduction Reference Table
Here is what employers deduct per month under Section 149 and your actual net take-home salary across representative salary brackets:
| Gross Monthly Pay | Annual Gross Salary | Monthly Tax (Sec 149) | Annual Income Tax | Net In-Hand Pay / Mo |
|---|---|---|---|---|
| PKR 50,000 | PKR 600,000 | PKR 0 | PKR 0 | PKR 50,000 |
| PKR 80,000 | PKR 960,000 | PKR 300 | PKR 3,600 | PKR 79,700 |
| PKR 100,000 | PKR 1,200,000 | PKR 500 | PKR 6,000 | PKR 99,500 |
| PKR 150,000 | PKR 1,800,000 | PKR 6,000 | PKR 72,000 | PKR 144,000 |
| PKR 200,000 | PKR 2,400,000 | PKR 13,000 | PKR 156,000 | PKR 187,000 |
| PKR 250,000 | PKR 3,000,000 | PKR 23,000 | PKR 276,000 | PKR 227,000 |
| PKR 300,000 | PKR 3,600,000 | PKR 34,667 | PKR 416,000 | PKR 265,333 |
| PKR 500,000 | PKR 6,000,000 | PKR 92,000 | PKR 1,104,000 | PKR 408,000 |
| PKR 1,000,000 | PKR 12,000,000 | PKR 290,950 | PKR 3,491,400* | PKR 709,050 |
*Note: Taxable income exceeding PKR 10 Million includes the 10% high-earner surcharge on tax liability under Section 4AB.
Calculate Your Exact Take-Home Salary Online
Need an instant calculation for custom monthly bonuses, medical exemptions, or business tax comparisons? Use our free, zero-signup Pakistan tax calculators:
Calculate your exact tax with our free 2026-27 Pakistan salary calculator
See your monthly take-home pay and Section 149 deduction
Compare salaried individual vs sole proprietor business schedules
Still need GST/sales tax? Use the FBR & provincial sales tax calculator
5. Salaried vs. Non-Salaried (Business Proprietor) Tax Slabs
Under Section 2(58) of the Income Tax Ordinance, 2001, an individual is legally classified as Salaried only if their salary income constitutes more than 75% of their total taxable income for the fiscal year. Sole proprietors, freelancers with non-salaried contracts, and partners in an Association of Persons (AOP) are taxed under Non-Salaried Business Slabs, which carry substantially higher progressive tax rates:
- • Up to PKR 600k: 0% (Tax-Free)
- • PKR 600k–1.2M: 1%
- • PKR 1.2M–2.2M: 11% (Base: PKR 6k)
- • PKR 2.2M–3.2M: 20% (Base: PKR 116k)
- • Top Bracket: 35% (Above PKR 7M)
- • Up to PKR 600k: 0% (Tax-Free)
- • PKR 600k–1.2M: 15% (vs 1% for salary)
- • PKR 1.2M–1.6M: 20% (Base: PKR 90k)
- • PKR 1.6M–3.2M: 30% (Base: PKR 170k)
- • Top Bracket: 45% (Above PKR 5.6M)
6. Statutory Allowances, Medical Exemptions & Tax Credits
Understanding allowable deductions can reduce your taxable salary and monthly withholding tax:
Exempt up to 10% of basic salary if free hospitalization or reimbursement is not provided under your employment contract.
Tax credit on investment in approved pension funds up to 20% of taxable income, lowering your overall annual tax burden.
Direct tax credit for donations made to non-profit organizations approved under Section 2(36) of the Ordinance.
Submit advance tax evidence (telecom withholding, motor vehicle token tax) to employer HR to reduce monthly payroll deductions.
7. Employer Withholding Obligations (Section 149)
Every employer in Pakistan is legally obligated under Section 149 of the Income Tax Ordinance to withhold income tax at source from salaried employees:
- Annual Estimation: Employers calculate the projected annual taxable salary for the entire 12-month period (July to June).
- Monthly Equal Installments: The annual tax liability is divided by 12 and deducted equally every month.
- Deposit to Treasury: Withheld amounts must be deposited into the Federal Treasury via Computerized Payment Receipt (CPR) by the 15th of the following month.
- Annual Tax Certificate: Employers must issue an annual tax deduction certificate (Salary Certificate) to employees by 31 July for filing their annual return on FBR IRIS.