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Salary Tax in Pakistan — How Much Is Cut From Your Pay, in Simple Words

Published: 23 October 2026 · Updated: 30 October 2026

Every month there is one deduction on the payslip: income tax. It may feel annoying, but its calculation is easy to understand. This guide is based on the FBR salaried slabs for Tax Year 2027 (July 2026 – June 2027) — Finance Act 2026.

First, the good news: zero tax up to Rs 50,000

On annual income up to Rs 600,000 (that is, up to Rs 50,000 a month) the tax is zero. Even above that, tax is not charged on the whole salary — only on the part above, in the way explained below.

What a slab means: a staircase calculation

Slabs work like a staircase — each part is charged at its own rate. The slabs for Tax Year 2026-27:

  • Up to Rs 600,000: 0%
  • 600,001 – 1,200,000: 1% on the part above
  • 1,200,001 – 2,200,000: Rs 6,000 + 11% on the part above
  • 2,200,001 – 3,200,000: Rs 116,000 + 20%
  • 3,200,001 – 4,100,000: Rs 316,000 + 25%
  • 4,100,001 – 5,600,000: Rs 541,000 + 29%
  • 5,600,001 – 7,000,000: Rs 976,000 + 32%
  • Above 7,000,000: Rs 1,424,000 + 35%

Compared with last year (2025-26) the middle slabs have become cheaper (the 23% slab is now 20%, 30% is now 25%, 35% is now 29%), and the 9% surcharge on income above Rs 10 million has been abolished.

Examples

  • Rs 100,000/month (Rs 1,200,000 a year): Tax = 1% of the 600,000 above 600,000 = Rs 6,000 a year — that is only Rs 500 a month. Net: Rs 99,500.
  • Rs 150,000/month (Rs 1,800,000 a year): Tax = 6,000 + (600,000 × 11%) = Rs 72,000 a year — Rs 6,000 a month. Net: Rs 144,000.
  • Rs 200,000/month (Rs 2,400,000 a year): Tax = 116,000 + (200,000 × 20%) = Rs 156,000 a year — Rs 13,000 a month.
  • Rs 300,000/month: Tax Rs 416,000 a year — Rs 34,667 a month.

Common misunderstandings

  • "If my slab changes, the higher rate will apply to my whole salary" — wrong. The higher rate applies only to the part above.
  • "There is no tax on a bonus" — a bonus is also salary income and is included in the same calculation.
  • "The company keeps the deduction" — no, the company deposits it with the FBR, and at the end of the year you adjust it by filing your tax return.

To work out your own salary, use the Salary Tax Calculator. This is an estimate — the actual deduction can differ slightly because of medical allowance, tax credits and so on.