How to calculate income tax on your salary in Pakistan (2026-27)
Salary tax in Pakistan is worked out on your yearly taxable salary using slabs: find your slab, take its fixed amount, add its percentage of everything above the slab's start, then divide by 12 for the monthly deduction. For 2026-27 (tax year 2027) salary up to Rs 600,000 a year is tax-free.
The short version
- Turn your monthly salary into a yearly figure. Multiply your monthly taxable salary by 12. Rs 300,000 a month is Rs 3,600,000 a year.
- Find your slab. Rs 3,600,000 falls in the Rs 3,200,001 to 4,100,000 slab.
- Take the slab's fixed amount and rate. That slab is Rs 316,000 plus 25% of the amount above Rs 3,200,000.
- Work out the yearly tax. 316,000 + 25% × 400,000 = 316,000 + 100,000 = Rs 416,000.
- Divide by 12. 416,000 ÷ 12 = Rs 34,666.67 deducted each month.
Skip the arithmetic. The free Income Tax Calculator Pakistan does this for you, shows the formula and the working with your own numbers, and runs in your browser - nothing you type is uploaded. Also useful: Zakat Calculator, Percentage Calculator.
The 2026-27 salary tax slabs
| Annual taxable salary (Rs) | Tax |
|---|---|
| Up to 600,000 | Nil |
| 600,001 - 1,200,000 | 1% of the amount above 600,000 |
| 1,200,001 - 2,200,000 | 6,000 + 11% above 1,200,000 |
| 2,200,001 - 3,200,000 | 116,000 + 20% above 2,200,000 |
| 3,200,001 - 4,100,000 | 316,000 + 25% above 3,200,000 |
| 4,100,001 - 5,600,000 | 541,000 + 29% above 4,100,000 |
| 5,600,001 - 7,000,000 | 976,000 + 32% above 5,600,000 |
| Above 7,000,000 | 1,424,000 + 35% above 7,000,000 |
These are the rates in the First Schedule to the Income Tax Ordinance 2001 as amended by the Finance Act 2026, for tax year 2027 (1 July 2026 to 30 June 2027). They apply to individuals whose salary is more than 75% of their taxable income. Each fixed amount is simply the full tax on all the slabs below, so the tax never jumps when you cross into a new slab - only the rate on the next rupee changes.
Three more worked examples
- Rs 100,000 a month: 1,200,000 a year is in the 1% slab: 1% × (1,200,000 − 600,000) = Rs 6,000 a year, or Rs 500 a month.
- Rs 150,000 a month: 1,800,000 a year: 6,000 + 11% × 600,000 = Rs 72,000 a year, or Rs 6,000 a month.
- Rs 500,000 a month: 6,000,000 a year: 976,000 + 32% × 400,000 = Rs 1,104,000 a year, or Rs 92,000 a month. That is an effective rate of 18.4%, even though the top rate on the next rupee is 32%.
What changed from 2025-26
The Finance Act 2026 left the tax-free limit and the first two slabs alone, so salaries up to Rs 2.2 million a year pay exactly what they did. Above that the rates fell: the 23% slab became 20%, the 30% slab became 25%, two new bands of 29% and 32% were added, and the 35% rate now starts at Rs 7 million instead of Rs 4.1 million. At Rs 300,000 a month the yearly tax falls from Rs 466,000 to Rs 416,000, a saving of Rs 50,000; at Rs 500,000 a month the saving is Rs 177,000.
Taxable salary, the 75% rule and filing
Use your taxable salary: your total pay including taxable allowances, less anything the law exempts. Your payslip or HR department can confirm the figure. If salary is 75% of your taxable income or less - for example because you also run a business - the non-salaried rates apply instead, and this method gives the wrong answer.
Your employer withholds the tax each month, and you still file an annual return with FBR to report your income and claim any credits, such as for charitable donations or approved pension contributions, which can reduce the final amount.