What is Income Tax?
Income tax is the tax the Federal Board of Revenue (FBR) charges on your income every year. For salaried persons, this tax is calculated on your total annual salary and deducted monthly at source by your company OR employer, it means already subtracted from your paycheck before you receive it, rather than paid separately at year end.
Pakistan uses a progressive slab system: your income is divided into brackets, and each bracket is taxed at its own rate. This means you do not pay one flat rate on your entire salary, only the portion of your income that falls within a higher bracket is taxed at that bracket’s rate.
How to Use Income Tax Calculator
- Select Monthly or Annual to match how you know your salary.
- Enter your gross salary amount.
- See your instant tax breakdown, no “Calculate” button needed, results update as you type.
Income Tax Slabs 2026 to 27 (Salaried Individuals)
As per the Finance Act 2026, effective July 1, 2026 (Tax Year 2027):
| Annual Taxable Income | Tax Rate |
| Up to Rs 600,000 | 0% |
| Rs 600,000 – 1,200,000 | 1% of amount exceeding Rs 600,000 |
| Rs 1,200,000 – 2,200,000 | Rs 6,000 + 11% of amount exceeding Rs 1,200,000 |
| Rs 2,200,000 – 3,200,000 | Rs 116,000 + 20% of amount exceeding Rs 2,200,000 |
| Rs 3,200,000 – 4,100,000 | Rs 316,000 + 25% of amount exceeding Rs 3,200,000 |
| Rs 4,100,000 – 5,600,000 | Rs 541,000 + 29% of amount exceeding Rs 4,100,000 |
| Rs 5,600,000 – 7,000,000 | Rs 976,000 + 32% of amount exceeding Rs 5,600,000 |
| Above Rs 7,000,000 | Rs 1,424,000 + 35% of amount exceeding Rs 7,000,000 |
Note: The 9% surcharge that previously applied to individuals earning above Rs 10 million annually has been fully repealed for salaried individuals starting Tax Year 2027. It still applies to non-salaried and business income.
These slabs apply to salaried individuals only, where salary makes up more than 75% of total taxable income. Business owners, freelancers, and non-salaried earners are taxed under a separate, generally higher slab table.
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FAQs
Your annual salary is divided into tax brackets, and each part of your income is taxed at that bracket’s rate. Your employer calculates this automatically and withholds the tax monthly from your paycheck, based on your projected annual salary.
Yes. For Tax Year 2027, salaried persons earning up to Rs 600,000 annually (Rs 50,000/month) pay zero income tax.
Salaried persons, where salary makes up 75% or more of their taxable income, are taxed under a lower, dedicated slab table with tax withheld monthly by their company or employer. Non-salaried individuals, business owners, freelancers, and individuals with mixed income are classified under a distinct, frequently higher slab table and are required to pay tax through advance/quarterly payments rather than monthly withholding.
Yes, for salaried individuals only. Starting in the 2027 tax year, salaried taxpayers will no longer be subject to the 9% surcharge that was previously imposed on annual income exceeding Rs 10 million prior to July 2026. It remains in effect for non-salaried and business income.
The anticipated filing deadline for the 2027 tax year is September 30, 2027. Confirm the exact date on the official FBR website closer to the deadline, as it is occasionally extended.