Pakistan Salary Tax Slabs 2026-27: How Much Income Tax Will You Pay

Your payslip shows a tax deduction every month, but most salaried people in Pakistan could not tell you why the number is what it is. This guide walks through the actual FY 2026-27 income tax slabs, shows worked examples at a few common salary levels, and explains how the tax-free threshold and slab math actually work.

The FY 2026-27 Income Tax Slabs

Under the Finance Act for tax year 2026-27, effective July 1, 2026, salaried individuals in Pakistan are taxed on annual income as follows:

• Up to Rs 600,000 a year, or Rs 50,000 a month: 0 percent, fully exempt.
• Rs 600,001 to Rs 1,200,000: 1 percent of the amount above Rs 600,000.
• Rs 1,200,001 to Rs 2,200,000: Rs 6,000 plus 11 percent of the amount above Rs 1,200,000.
• Rs 2,200,001 to Rs 3,200,000: Rs 116,000 plus 20 percent of the amount above Rs 2,200,000.
• Rs 3,200,001 to Rs 4,100,000: Rs 316,000 plus 25 percent of the amount above Rs 3,200,000.
• Rs 4,100,001 to Rs 5,600,000: Rs 541,000 plus 29 percent of the amount above Rs 4,100,000.
• Rs 5,600,001 to Rs 7,000,000: Rs 976,000 plus 32 percent of the amount above Rs 5,600,000.
• Above Rs 7,000,000: Rs 1,424,000 plus 35 percent of the amount above Rs 7,000,000.

One notable change this year: the 9 percent surcharge that previously applied on top of tax for incomes above Rs 10 million has been abolished.

Worked Examples at Common Salary Levels

Slab math is easier to follow with real numbers. Here is the annual and monthly tax at four different gross monthly salaries:

• Rs 75,000 a month, Rs 900,000 a year: annual tax about Rs 3,000, monthly tax about Rs 250, take home about Rs 74,750.
• Rs 150,000 a month, Rs 1,800,000 a year: annual tax about Rs 72,000, monthly tax about Rs 6,000, take home about Rs 144,000.
• Rs 300,000 a month, Rs 3,600,000 a year: annual tax about Rs 416,000, monthly tax about Rs 34,667, take home about Rs 265,333.
• Rs 500,000 a month, Rs 6,000,000 a year: annual tax about Rs 1,104,000, monthly tax about Rs 92,000, take home about Rs 408,000.

Notice how the effective tax rate rises gradually rather than jumping. At Rs 150,000 a month you are technically in the 11 percent slab, but your effective rate on the whole salary works out closer to 4 percent, because only the portion above Rs 1,200,000 a year is taxed at 11 percent, not the whole amount.

What Counts Toward Taxable Salary Income

Your taxable salary usually includes your basic pay, allowances such as house rent and conveyance where applicable, and any bonus or commission. Some benefits are treated differently for tax purposes, and certain provident fund and gratuity contributions can reduce your taxable base depending on how your employer structures your compensation. If your pay includes significant allowances or benefits beyond basic salary, it is worth checking with your employer’s payroll or HR team on exactly what portion is taxed.

How Withholding Actually Works

Employers do not wait until the end of the year to collect your tax. Under Section 149 of the Income Tax Ordinance, your employer estimates your annual tax liability at the start of the year, or when your salary changes, and deducts a proportional amount, usually roughly one twelfth of it, from each month’s pay. This is why your payslip already shows tax withheld rather than a lump sum due in one month. If your income changes partway through the year, for example a raise or a bonus, your employer should recalculate and adjust the remaining months accordingly.

Frequently Asked Questions

Is the Rs 600,000 threshold based on annual or monthly income? It is an annual figure. Rs 600,000 a year works out to Rs 50,000 a month, so anyone earning at or below that gross monthly salary, with no other income, generally owes no income tax.

Do these slabs apply to freelancers and business income too? These specific slabs are for salaried individuals. Non salaried and business income in Pakistan is taxed under a separate rate schedule, which can differ from the salaried slabs shown here.

Why did my monthly tax deduction change even though my salary did not? Your employer periodically re-estimates your annual tax liability, and adjustments elsewhere, such as a bonus paid earlier in the year or a correction to a previous estimate, can shift what gets withheld in later months.

Do I still need to file a tax return if my employer already deducts tax? In most cases, yes. Filing an annual return is generally required for salaried individuals above certain income levels, and being an active filer also affects the withholding tax rates you pay on other transactions throughout the year.

Generate a Clean Payslip

Once you know what you are taxed and why, putting it on paper is the easy part. Our Payslip Generator creates a clean, professional salary slip with tax and deductions broken out clearly, downloadable as a PDF with no watermark.