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Pakistan Salary Tax: A Simple Guide

Last updated: 1 July 2025

What is salary tax in Pakistan?

Salary tax (income tax on salary) is the tax the government collects on income you earn from employment. In Pakistan it is governed by the Income Tax Ordinance 2001 and updated each year by the Finance Act. For salaried individuals it is usually deducted by your employer every month and deposited with the FBR on your behalf.

Monthly vs annual calculation

FBR tax slabs are defined on your annual taxable income. Employers estimate your annual income, calculate the annual tax using the slabs, and deduct roughly one-twelfth of it each month. That is why our Net Salary Calculator shows both monthly and annual figures.

FBR salary tax slabs (Tax Year 2026 (Jul 2025 – Jun 2026))

Tax is progressive — each slab's rate applies only to the income within that slab:

  • PKR 0 – PKR 600,000: No tax
  • PKR 600,000 – PKR 1,200,000: PKR 0 + 2.5% of the amount above PKR 600,000
  • PKR 1,200,000 – PKR 2,200,000: PKR 6,000 + 11.0% of the amount above PKR 1,200,000
  • PKR 2,200,000 – PKR 3,200,000: PKR 116,000 + 23.0% of the amount above PKR 2,200,000
  • PKR 3,200,000 – PKR 4,100,000: PKR 346,000 + 30.0% of the amount above PKR 3,200,000
  • Above PKR 4,100,000: PKR 616,000 + 35.0% of the amount above PKR 4,100,000

A surcharge of 9.0% also applies on the computed tax where taxable income exceeds PKR 10,000,000.

Why take-home salary differs from gross salary

Your gross salary is reduced by several things before it reaches your account:

  • Income tax deducted at source by your employer.
  • Provident fund (PF) — your contribution to a retirement fund.
  • EOBI — a small old-age benefits contribution.
  • Other deductions — loans, insurance, union dues, etc.

Provident fund and deductions

Provident fund contributions are typically a percentage of your basic salary, matched by your employer. While PF reduces your take-home pay today, it builds a lump sum for the future. Use our Net Salary Calculator to see how PF, EOBI and tax together shape your monthly pay.

Try the calculators

This calculator is for general informational purposes only and should not be treated as tax, financial or legal advice. Rules may change. Please verify with the FBR or a qualified tax professional.