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Pakistan Income Tax Guide — FBR Slabs
By Utilix Editorial Team · Published May 8, 2026 · Updated Jul 3, 2026
Pakistan Income Tax Guide — FBR Slabs & Take-Home Pay
Pakistan's income tax for salaried individuals is governed by the Income Tax Ordinance 2001, administered by the Federal Board of Revenue (FBR). Each year's Finance Act sets the slab structure effective from 1 July.
Estimate only — not tax advice. Verify current slabs at fbr.gov.pk and consult a chartered accountant for your actual liability.
The tax year
Pakistan's tax year runs 1 July – 30 June. FY 2026–27 means income earned between 1 July 2026 and 30 June 2027. When the National Assembly passes the Finance Act (usually June), new slab rates take effect from 1 July — the highest-search period for "Pakistan income tax" is June–August.
FY 2026–27 salaried slabs (Finance Act 2026)
The Finance Act 2026 kept the tax-free threshold and the 1%/11% bands unchanged, but cut rates on every band above Rs. 2.2M and split the old "above Rs. 4.1M" band into three narrower bands — and abolished the 9% surcharge that previously applied above Rs. 10M:
| Annual Gross | Tax on the band |
|---|---|
| Up to Rs. 600,000 | 0% |
| Rs. 600,001 – 1,200,000 | 1% on excess over 600,000 |
| Rs. 1,200,001 – 2,200,000 | Rs. 6,000 + 11% on excess over 1,200,000 |
| Rs. 2,200,001 – 3,200,000 | Rs. 116,000 + 20% on excess over 2,200,000 |
| Rs. 3,200,001 – 4,100,000 | Rs. 316,000 + 25% on excess over 3,200,000 |
| Rs. 4,100,001 – 5,600,000 | Rs. 541,000 + 29% on excess over 4,100,000 |
| Rs. 5,600,001 – 7,000,000 | Rs. 976,000 + 32% on excess over 5,600,000 |
| Above Rs. 7,000,000 | Rs. 1,424,000 + 35% on excess over 7,000,000 |
Quick example — Rs. 150,000/month (Rs. 1.8M annual):
- 0 – 600k at 0% = ₨ 0
- 600k – 1.2M at 1% = ₨ 6,000
- 1.2M – 1.8M at 11% = ₨ 66,000
- Total = ₨ 72,000 | Effective rate = 4.0%
Quick example — Rs. 400,000/month (Rs. 4.8M annual): reaches into the 4.1M–5.6M band, taxed at 29% (cut from 35% the prior year). Total tax = ₨ 744,000, effective rate ≈ 15.5% — about Rs. 117,000 less than the same salary would owe under FY 2025–26 rates.
FY 2025–26 salaried slabs (Finance Act 2025)
The Finance Act 2025 brought significant tax relief by cutting rates in the lower and middle brackets:
| Annual Gross | Tax on the band |
|---|---|
| Up to Rs. 600,000 | 0% |
| Rs. 600,001 – 1,200,000 | 1% on excess over 600,000 |
| Rs. 1,200,001 – 2,200,000 | Rs. 6,000 + 11% on excess over 1,200,000 |
| Rs. 2,200,001 – 3,200,000 | Rs. 116,000 + 23% on excess over 2,200,000 |
| Rs. 3,200,001 – 4,100,000 | Rs. 346,000 + 30% on excess over 3,200,000 |
| Above Rs. 4,100,000 | Rs. 616,000 + 35% on excess over 4,100,000 |
Quick example — Rs. 150,000/month (Rs. 1.8M annual):
- 0 – 600k at 0% = ₨ 0
- 600k – 1.2M at 1% = ₨ 6,000
- 1.2M – 1.8M at 11% = ₨ 66,000
- Total = ₨ 72,000 | Effective rate = 4.0%
FY 2024–25 salaried slabs (Finance Act 2024)
| Annual Gross | Tax on the band |
|---|---|
| Up to Rs. 600,000 | 0% |
| Rs. 600,001 – 1,200,000 | 5% on excess over 600,000 |
| Rs. 1,200,001 – 2,200,000 | Rs. 30,000 + 15% on excess over 1,200,000 |
| Rs. 2,200,001 – 3,200,000 | Rs. 180,000 + 25% on excess over 2,200,000 |
| Rs. 3,200,001 – 4,100,000 | Rs. 430,000 + 30% on excess over 3,200,000 |
| Above Rs. 4,100,000 | Rs. 700,000 + 35% on excess over 4,100,000 |
How marginal slab taxation works
FBR uses a progressive (marginal) system. Each band of income is taxed at its own rate — you only pay the higher rate on the portion above each threshold, not your entire income.
The "base amount" (e.g. Rs. 6,000 in the 3rd slab for FY 2025–26) is simply the accumulated tax from all lower slabs. The math is identical to applying each marginal rate band by band.
Annual Tax = sum of (income in each band × band rate)
Monthly Tax = Annual Tax ÷ 12
Take-Home (annual) = Annual Gross − Annual Tax
Take-Home (monthly) = Take-Home (annual) ÷ 12
Use the Pakistan Income Tax Calculator to compute any salary instantly, compare tax years, or run two salary scenarios side by side.
FY 2026-27 vs FY 2025-26 — what changed
| Band | FY 2025-26 | FY 2026-27 | Saving at band ceiling |
|---|---|---|---|
| 600k – 1.2M | 1% | 1% | — |
| 1.2M – 2.2M | 11% | 11% | — |
| 2.2M – 3.2M | 23% | 20% | Rs. 30,000 |
| 3.2M – 4.1M | 30% | 25% | Rs. 75,000 |
| 4.1M – 5.6M | 35% | 29% | Rs. 90,000 |
| 5.6M – 7.0M | 35% | 32% | Rs. 42,000 |
| Above 7.0M | 35% | 35% | — |
The two lowest bands were left untouched; every band from Rs. 2.2M upward was cut, and the old flat 35% above Rs. 4.1M was split into three narrower bands (29%, 32%, 35%). The 9% income surcharge that previously applied above Rs. 10M was also abolished. A salaried employee earning Rs. 4.8M annually saves approximately Rs. 117,000 under FY 2026–27 compared to FY 2025–26.
FY 2025-26 vs FY 2024-25 — what changed
| Band | FY 2024-25 | FY 2025-26 | Saving at band ceiling |
|---|---|---|---|
| 600k – 1.2M | 5% | 1% | Rs. 24,000 |
| 1.2M – 2.2M | 15% | 11% | Rs. 40,000 |
| 2.2M – 3.2M | 25% | 23% | Rs. 20,000 |
| 3.2M – 4.1M | 30% | 30% | — |
| Above 4.1M | 35% | 35% | — |
The three lower bands saw cuts; the two upper bands were unchanged. A salaried employee earning Rs. 3.6M annually saves approximately Rs. 84,000 under FY 2025–26 compared to FY 2024–25.
What is not included
- Super Tax — levied on high-income earners and corporates above certain thresholds.
- Income surcharge — a 9% surcharge on income tax above Rs. 10 million was abolished starting FY 2026–27; it still applied in FY 2025–26 and earlier years.
- Non-salaried slabs — self-employed, business, or freelance income follows different rates.
- Presumptive tax — exports and certain contract payments are taxed under the Final Tax Regime (FTR) at source.
- Provincial taxes — the Sindh Revenue Board and Punjab Revenue Authority levy separate professional taxes on salaried individuals.
Freelancers and PSEB
Freelancers registered with the Pakistan Software Export Board (PSEB) may qualify for a reduced or concessional withholding rate on foreign-sourced income. Verify current conditions with PSEB and your tax consultant.
When slabs change
FBR slabs change with each Finance Act, typically enacted in June. Always verify the current year's rates at fbr.gov.pk before computing your actual liability.
FAQ
Is Pakistan's income tax calculated on gross or net salary?
On gross annual salary, before deductions such as provident fund contributions. Some employer-specific exemptions (e.g. certain allowances) may reduce the taxable amount — check your salary structure with your employer's payroll or HR department.
Do non-resident Pakistanis pay the same salary tax rates?
Residency status affects which income is taxable and at what rates; non-residents are typically taxed only on Pakistan-source income, and some rates and exemptions differ from resident salaried slabs. This guide covers resident salaried individuals only.
How is monthly withholding tax different from my final annual liability?
Employers withhold tax monthly based on an estimate of your annual salary. Bonuses, mid-year raises, or additional income can mean your actual annual liability differs from the sum of monthly withholdings — reconcile at year-end via your tax return.
Why did my FY 2026–27 tax drop compared to FY 2025–26 even though my salary didn't change?
The Finance Act 2026 cut rates on every band above Rs. 2.2M and abolished the 9% surcharge above Rs. 10M (see the comparison table above). If your salary falls in one of those bands, your tax liability falls even with an unchanged salary.