1. Quick Summary & 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 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.
Every rupee earned up to PKR 50,000/month is 100% tax-free. Slabs apply progressively only on the amount exceeding each threshold, meaning moving into a higher slab never reduces your net take-home salary.
2. Official FBR Salaried Tax Slabs (Tax Year 2026-27)
The following 8-tier progressive tax rate schedule is enacted under the First Schedule of the Income Tax Ordinance, 2001 (as amended by Finance Acts):
| Slab | Taxable Salary Range (PKR) | Fixed Base Tax | Marginal Rate |
|---|---|---|---|
| 1 | Up to 600,000 | PKR 0 | 0% (Tax-Free) |
| 2 | 600,001 to 1,200,000 | PKR 0 | 1% of amount > 600k |
| 3 | 1,200,001 to 2,200,000 | PKR 6,000 | +11% of amount > 1.2M |
| 4 | 2,200,001 to 3,200,000 | PKR 116,000 | +20% of amount > 2.2M |
| 5 | 3,200,001 to 4,100,000 | PKR 316,000 | +25% of amount > 3.2M |
| 6 | 4,100,001 to 5,600,000 | PKR 541,000 | +29% of amount > 4.1M |
| 7 | 5,600,001 to 7,000,000 | PKR 976,000 | +32% of amount > 5.6M |
| 8 | Above 7,000,000 | PKR 1,424,000 | +35% of amount > 7.0M |
3. Monthly Salary Deduction Table (Common Income Tiers)
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 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 291,033 | PKR 3,492,400* | PKR 708,967 |
*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 computation for custom monthly bonuses, medical allowances, or non-taxable allowances? Use our free, zero-latency Pakistan salary tax calculator tools:
4. Salaried vs. Non-Salaried (Business Proprietor) Tax Slabs
Under Section 2(58) of the Income Tax Ordinance, 2001, an individual is classified as Salaried only if their salary represents more than 75% of their total taxable income for the tax year. Sole proprietors, freelancers with unregistered income, and association of persons (AOP) are taxed under Non-Salaried Business Slabs, which carry substantially higher tax rates:
- • Up to PKR 600k: 0%
- • PKR 600k–1.2M: 1%
- • PKR 1.2M–2.2M: 11%
- • PKR 2.2M–3.2M: 20%
- • Top Bracket: 35% (Above PKR 7M)
- • Up to PKR 600k: 0%
- • PKR 600k–1.2M: 15% (vs 1% for salary)
- • PKR 1.2M–1.6M: 20%
- • PKR 1.6M–3.2M: 30%
- • Top Bracket: 45% (Above PKR 5.6M)
5. 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 deductions.
6. 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.