Salary Tax Slabs in Pakistan for 2026-27

Nothing is deducted on the first Rs 600,000 you earn in a year, and the top rate of 35 per cent now starts at Rs 7 million rather than Rs 4.1 million. Those are the two changes that matter most to salaried people for tax year 2026-27, which runs from 1 July 2026.

The other change is a removal. The 9 per cent surcharge that applied to higher salaries has been withdrawn for salaried individuals, so nothing is added on top of the slab figure.

The slabs

Every cumulative figure in the middle column has been re-derived rather than copied. Each one equals the previous band's fixed amount plus that band's rate across its full width, and all six reconcile exactly. We say more about why that check matters at the end.

A raise never leaves you worse off

This is the most common and most expensive misunderstanding about Pakistani salary tax. People turn down increments, or ask to be paid partly in cash, because they believe crossing into a higher slab will tax their whole salary at the higher rate.

It does not. The higher rate applies only to the rupees above the threshold. Cross from Rs 2,190,000 to Rs 2,210,000 and the 20 per cent applies to the last Rs 10,000, not to the whole amount. Your take home pay goes up, always.

Your effective rate, meaning tax as a share of your whole salary, is always lower than the slab rate you have reached. Somebody on Rs 3 million pays Rs 276,000, which is a little over 9 per cent of their salary even though they sit in the 20 per cent band.

What that looks like in rupees

1. Rs 500,000 a year pays nothing.
2. Rs 1,000,000 a year pays Rs 4,000.
3. Rs 2,000,000 a year pays Rs 94,000.
4. Rs 3,000,000 a year pays Rs 276,000.
5. Rs 5,000,000 a year pays Rs 802,000.

At Rs 10,000,000 the annual figure is Rs 2,474,000. Divide any of these by twelve for the monthly deduction, and check your own number against your payslip rather than assuming the payroll department has it right.

You can run your own salary through our salary tax calculator, which uses this same table and shows the monthly deduction and your effective rate.

What actually changed this year

Three things. The threshold for the top 35 per cent rate moved from Rs 4.1 million to Rs 7 million, which is a substantial saving for anyone between those figures. Intermediate slabs were added so the jump between bands is less abrupt. And the 9 per cent surcharge on higher salaries was withdrawn for salaried individuals.

The tax free threshold did not move. It remains Rs 600,000, where it has been, and that is worth noting because inflation has continued while the figure has not.

Being a filer is separate, and it costs more to ignore

Your salary tax is deducted whether or not you file a return. Filing is a different obligation, and not filing carries its own consequences that have become considerably more expensive.

The surcharge for getting back onto the Active Taxpayer List after the deadline rose from Rs 1,000 to Rs 25,000 for individuals, which we cover in our page on the late filing surcharge. The return itself is due on 30 September, and our filing guide covers the process.

Check your payslip against the table

Payroll errors are common, particularly after a budget changes the slabs mid-career or when someone joins partway through a tax year. The deduction should reflect your projected annual income, not a flat percentage of each month.

If your deduction looks wrong, work out the annual figure from the table, divide by twelve, and take the difference to your employer with the numbers rather than a complaint. Allowances, bonuses and any tax already deducted elsewhere all affect the calculation, so a mismatch is not automatically an error.

Common questions about salary tax slabs

How much salary is tax free in Pakistan?

Up to Rs 600,000 a year. Above that, only the amount over the threshold is taxed, and at 1 per cent to begin with.

Will a raise push me into a higher bracket and cost me money?

No. Only the rupees above each threshold are taxed at the higher rate, so more salary always means more take home pay.

Is the 9 per cent surcharge still applied?

It was withdrawn for salaried individuals for this tax year, so nothing is added on top of the slab calculation.

When did these slabs take effect?

Tax year 2026-27, running from 1 July 2026, under the Finance Act 2026.

Do these apply to freelancers and business income?

No. These are the salaried slabs. Non salaried individuals and associations of persons are taxed under a different schedule.

Last checked and sources

Last checked 27 August 2026. FBR's own income tax rates page returned a server error when we tried it on that date, so we could not read the slabs at source. What we did instead was check the arithmetic. Every cumulative fixed amount in the table was re-derived from the previous band's fixed amount plus that band's rate across its full width, and all six reconcile exactly, which is a table that has not been mistyped. The figures also match independent reporting of the Finance Act 2026, including the Rs 1,424,000 plus 35 per cent above Rs 7 million. That is corroboration rather than confirmation at source, and it is the honest description of what we have. This is general information and not tax advice. Where a large sum turns on it, check with a tax professional or with FBR directly.