Income Tax on Salary in Pakistan 2026-27: New Tax Slabs and Examples
Budget 2026-27 cut income tax for salaried people earning above Rs 2.2 million a year and abolished the surcharge. Here are the new tax slabs, worked monthly examples, and how to check your own salary tax for tax year 2027.
Table of contents
- Salary tax slabs for 2026-27 (tax year 2027)
- How much tax will I pay each month?
- Worked example: Rs 250,000 a month
- What changed in Budget 2026-27?
- How is salary tax collected?
- Why should I file a tax return if tax is already deducted?
- What about freelancers and business income?
- What to do next
- Sources
Last reviewed: 18 October 2026. Rates apply to tax year 2027 (1 July 2026 to 30 June 2027) under the Finance Act 2026.
Short answer: income tax on salary in Pakistan for 2026-27 is zero up to Rs 600,000 a year (Rs 50,000 a month), then rises through eight slabs to a maximum of 35% on income above Rs 7 million. Budget 2026-27 lowered rates for everyone earning more than Rs 2.2 million a year and abolished the surcharge on high earners. If you earn Rs 100,000 a month, your tax is Rs 500 a month; on Rs 250,000 a month it's Rs 23,000, down from Rs 25,000 last year.
Here are the new slabs, worked examples and what changed.
Key takeaways
- No tax on salary up to Rs 600,000 a year (Rs 50,000 a month).
- The bottom three slabs (up to Rs 2.2 million a year) are unchanged.
- Rates were cut for income above Rs 2.2 million, from 23% to 20% in the Rs 2.2–3.2 million slab, and the 35% rate now starts at Rs 7 million instead of Rs 4.1 million.
- The surcharge on salaried income above Rs 10 million has been abolished.
- Your employer deducts the tax from your salary every month.
Salary tax slabs for 2026-27 (tax year 2027)
| Annual taxable salary | Tax |
|---|---|
| Up to Rs 600,000 | 0% |
| Rs 600,001 – 1,200,000 | 1% of the amount above Rs 600,000 |
| Rs 1,200,001 – 2,200,000 | Rs 6,000 + 11% of the amount above Rs 1.2 million |
| Rs 2,200,001 – 3,200,000 | Rs 116,000 + 20% of the amount above Rs 2.2 million |
| Rs 3,200,001 – 4,100,000 | Rs 316,000 + 25% of the amount above Rs 3.2 million |
| Rs 4,100,001 – 5,600,000 | Rs 541,000 + 29% of the amount above Rs 4.1 million |
| Rs 5,600,001 – 7,000,000 | Rs 976,000 + 32% of the amount above Rs 5.6 million |
| Above Rs 7,000,000 | Rs 1,424,000 + 35% of the amount above Rs 7 million |
Source: Finance Act 2026, as passed by the National Assembly. Applies to individuals whose salary is more than 75% of their taxable income.
How much tax will I pay each month?
| Monthly salary | Annual salary | Annual tax | Monthly tax |
|---|---|---|---|
| Rs 50,000 | Rs 600,000 | Rs 0 | Rs 0 |
| Rs 75,000 | Rs 900,000 | Rs 3,000 | Rs 250 |
| Rs 100,000 | Rs 1,200,000 | Rs 6,000 | Rs 500 |
| Rs 150,000 | Rs 1,800,000 | Rs 72,000 | Rs 6,000 |
| Rs 250,000 | Rs 3,000,000 | Rs 276,000 | Rs 23,000 |
| Rs 400,000 | Rs 4,800,000 | Rs 744,000 | Rs 62,000 |
Worked example: Rs 250,000 a month
Your annual salary is Rs 3,000,000, which falls in the Rs 2.2–3.2 million slab. Tax = Rs 116,000 + 20% × (3,000,000 − 2,200,000) = Rs 116,000 + Rs 160,000 = Rs 276,000 a year, or Rs 23,000 a month. Under last year's 23% rate, the same salary would have paid Rs 300,000, so you save Rs 24,000 a year.
What changed in Budget 2026-27?
- No change for lower incomes: the tax-free limit stays at Rs 600,000, and the 1% and 11% slabs are unchanged, so anyone earning up to about Rs 183,000 a month pays the same as last year.
- Lower rates in the middle: 23% became 20% (Rs 2.2–3.2 million) and 30% became 25% (Rs 3.2–4.1 million).
- Two new slabs at the top: 29% (Rs 4.1–5.6 million) and 32% (Rs 5.6–7 million), with 35% only above Rs 7 million.
- Surcharge abolished: the extra surcharge on salaried income above Rs 10 million no longer applies.
How is salary tax collected?
Your employer calculates your expected annual tax and deducts it from your salary each month (withholding tax), then deposits it with the Federal Board of Revenue (FBR). You'll see it on your salary slip. At the end of the tax year, you file your income tax return on FBR's IRIS portal. For tax year 2027, the normal deadline is 30 September 2027, unless the FBR extends it.
Why should I file a tax return if tax is already deducted?
- To get on the Active Taxpayers List (ATL). Filers pay lower withholding taxes on things like banking transactions, vehicle registration and property.
- To claim refunds if too much tax was deducted, for example if you changed jobs during the year.
- Many employers, banks and embassies ask for proof of filer status.
What about freelancers and business income?
The slabs above are for salaried individuals. Freelancers, business owners and people whose salary is less than 75% of their total income are taxed under different rules and rates. IT and IT-enabled services exporters registered with PSEB may qualify for reduced final tax regimes on export proceeds received through banking channels. Check the latest FBR guidance or ask a tax adviser.
What to do next
Check your salary slip to make sure the right tax is being deducted, and file your return on time. If you're looking for a better-paid role, compare it with the minimum wage and average salary in Pakistan, and browse the latest jobs in Pakistan on GetPakJob, including accounting and finance jobs.
Sources
- Finance Act 2026 (Budget 2026-27), as passed by the National Assembly, June 2026
- Federal Board of Revenue (FBR), income tax rates and IRIS filing guidance
- Budget 2026-27 coverage: Dawn, The Express Tribune, Business Recorder
This article is general information, not tax advice. For your own situation, check with the FBR or a qualified tax adviser.