How salary tax is calculated
Pakistan taxes salaried individuals in slabs. You pay a fixed amount for your slab plus a percentage of the income above that slab's lower limit.
Example: a monthly salary of Rs 200,000 is Rs 2,400,000 a year. It falls in the 2,200,001 – 3,200,000 slab, so tax = 116,000 + 20% × (2,400,000 − 2,200,000) = Rs 156,000 a year, or Rs 13,000 a month.
What changed in Budget 2026-27
- The tax-free limit stays at Rs 600,000 a year (Rs 50,000 a month).
- The number of slabs increased from six to eight, with lower rates for middle and upper-middle incomes.
- The top rate of 35% now starts above Rs 7 million a year.
- The 9% surcharge on salaries above Rs 10 million was abolished.
Frequently asked questions
What is the tax-free salary limit in Pakistan for 2026-27?
Annual taxable salary up to Rs 600,000 (Rs 50,000 a month) is exempt from income tax.
How much tax is deducted on a Rs 100,000 monthly salary?
Rs 100,000 a month is Rs 1,200,000 a year, which falls in the 1% slab: 1% of (1,200,000 − 600,000) = Rs 6,000 a year, or Rs 500 a month.
Is this calculator official?
No. It is an independent estimate based on the published Finance Act 2026 slabs. Your employer's actual deduction may differ because of allowances, exemptions, tax credits or adjustments. For filing, check with FBR or a tax adviser.
Does this include the surcharge?
The 9% surcharge on salaried income above Rs 10 million was abolished by the Finance Act 2026, so no surcharge is added for tax year 2027.