How salary tax is calculated
Salary tax in Pakistan uses slabs. Find the slab your annual taxable salary falls in, then add the fixed amount for that slab to the slab’s rate applied to the part of your salary above its lower limit. Divide by 12 for the monthly deduction.
Annual tax = fixed amount for your slab + slab rate × (annual salary − slab’s lower limit)
Taxable salary is your gross pay less allowances that the law exempts. Use the taxable figure on your salary slip or your employer’s tax certificate.
Salary tax slabs: Tax Year 2027 (1 July 2026 – 30 June 2027)
| Annual taxable salary | Tax |
|---|---|
| PKR 0 – PKR 600,000 | Nil |
| PKR 600,001 – PKR 1,200,000 | 1% of the amount above PKR 600,000 |
| PKR 1,200,001 – PKR 2,200,000 | PKR 6,000 + 11% of the amount above PKR 1,200,000 |
| PKR 2,200,001 – PKR 3,200,000 | PKR 116,000 + 20% of the amount above PKR 2,200,000 |
| PKR 3,200,001 – PKR 4,100,000 | PKR 316,000 + 25% of the amount above PKR 3,200,000 |
| PKR 4,100,001 – PKR 5,600,000 | PKR 541,000 + 29% of the amount above PKR 4,100,000 |
| PKR 5,600,001 – PKR 7,000,000 | PKR 976,000 + 32% of the amount above PKR 5,600,000 |
| Above PKR 7,000,000 | PKR 1,424,000 + 35% of the amount above PKR 7,000,000 |
Salary tax slabs: Tax Year 2026 (1 July 2025 – 30 June 2026)
| Annual taxable salary | Tax |
|---|---|
| PKR 0 – PKR 600,000 | Nil |
| PKR 600,001 – PKR 1,200,000 | 1% of the amount above PKR 600,000 |
| PKR 1,200,001 – PKR 2,200,000 | PKR 6,000 + 11% of the amount above PKR 1,200,000 |
| PKR 2,200,001 – PKR 3,200,000 | PKR 116,000 + 23% of the amount above PKR 2,200,000 |
| PKR 3,200,001 – PKR 4,100,000 | PKR 346,000 + 30% of the amount above PKR 3,200,000 |
| Above PKR 4,100,000 | PKR 616,000 + 35% of the amount above PKR 4,100,000 |
A surcharge of 9% of the tax applies where taxable income exceeds PKR 10,000,000.
Worked examples
| Monthly salary | Tax per month, 2026-27 | Tax per month, 2025-26 | Take-home, 2026-27 |
|---|---|---|---|
| PKR 100,000 | PKR 500 | PKR 500 | PKR 99,500 |
| PKR 250,000 | PKR 23,000 | PKR 25,000 | PKR 227,000 |
| PKR 500,000 | PKR 92,000 | PKR 106,750 | PKR 408,000 |
For a salary of PKR 250,000 a month (PKR 3,000,000 a year), the 2026-27 slab is PKR 2,200,001 to PKR 3,200,000. Tax is PKR 116,000 plus 20% of the PKR 800,000 above PKR 2,200,000, which is PKR 276,000 a year or PKR 23,000 a month.
