Pakistan statutory reference
Salary income tax
The eight slabs that decide what comes off a Pakistani salary in tax year 2026–27, and what the Finance Act 2026 changed.
Salary income tax in Pakistan is charged in bands. You do not pay your top rate on everything you earn — you pay each band's rate on the part of your income that falls inside it. That single misunderstanding is behind most of the panic about the 35% rate, so the table below gives both the rate on each band and the running total at the point the band closes.
Tax year 2026-27 runs from 1 July 2026. The rates come from the Finance Act 2026, which substituted the whole table at Clause (2) of Division I of Part I of the First Schedule, Income Tax Ordinance 2001.
The eight bands
| Taxable income for the year | Rate on this band | Tax at the top of the band |
|---|---|---|
| Up to Rs 600,000 | 0% | Rs 0 |
| Rs 600,001 – Rs 1,200,000 | 1% | Rs 6,000 |
| Rs 1,200,001 – Rs 2,200,000 | 11% on the part above Rs 1,200,000 | Rs 116,000 |
| Rs 2,200,001 – Rs 3,200,000 | 20% on the part above Rs 2,200,000 | Rs 316,000 |
| Rs 3,200,001 – Rs 4,100,000 | 25% on the part above Rs 3,200,000 | Rs 541,000 |
| Rs 4,100,001 – Rs 5,600,000 | 29% on the part above Rs 4,100,000 | Rs 976,000 |
| Rs 5,600,001 – Rs 7,000,000 | 32% on the part above Rs 5,600,000 | Rs 1,424,000 |
| Above Rs 7,000,000 | 35% on the part above Rs 7,000,000 | no ceiling |
Every total in the right-hand column is computed from the table to its left, and a test asserts each one against the figure the Finance Act 2026 states for itself. If we mistype a rate, the build fails rather than the page quietly misinforming you.
Work out a salary
Taxable salary, after any exemptions you are entitled to — not your gross package.
- Tax for the year
- Rs 72,000
- A month of it
- Rs 6,000
- Share of the salary
- 4.0%
Your band's rate is 11.0%, which applies only above Rs 1,200,000.
Reference only, and it stops at the bands. It does not account for exemptions, tax credits, other heads of income, or the surcharge that still applies to income that is not salary. Nothing you type here is sent anywhere — the arithmetic runs in your browser.
What the Finance Act 2026 changed
The 9% surcharge on salaried individuals is withdrawn.
Section 4AB charged a 9% surcharge on salaried income above PKR 10 million. The Finance Act 2026 removed it for salaried individuals. The 10% surcharge on other individuals and on associations of persons still applies.
Read from Finance Act 2026
The 35% top rate now starts at PKR 7 million instead of PKR 4.1 million.
Two intermediate slabs were added at 29% and 32%, so income between PKR 4.1m and PKR 7m is no longer taxed at the top rate.
Read from Finance Act 2026
Three things this table does not tell you
- Your employer withholds monthly, against an estimate of the year. If your pay changes mid-year, or a bonus lands, the monthly deduction will be wrong until it is trued up. That is normal and it is the employer's job to true it up.
- Taxable salary is not gross pay. Exemptions and credits come off first. The figure to put in the calculator above is what is left.
- Contributions are a separate matter. EOBI and provincial social security are not income tax, are not computed on your salary, and are mostly not deducted from it.
Found something out of date?
These figures change by notification, often without announcement. If you hold a notification we have not seen — especially a provincial one — send it and we will correct the page and credit the source.