How do progressive tax slabs actually work?

Each rate applies only to the income that falls inside its own band, never to your whole salary. Moving into a higher slab does not re-tax the rupees below it. This is why the effective rate you pay is always lower than the slab rate you fall into.

How much salary is tax-free in Pakistan?

The first Rs. 600,000 of annual taxable income is taxed at 0% for salaried individuals, about Rs. 50,000 a month. This is the same in 2025-26 and 2026-27. Earning below that threshold does not remove the reason to file: filing is what puts you on the Active Taxpayer List and gets you the lower withholding rates on banking, property, and vehicles.

What are the new tax slabs for 2026-27?

For salaried individuals in Tax Year 2027: 0% up to Rs. 600,000; 1% to Rs. 1.2 million; Rs. 6,000 + 11% to Rs. 2.2 million; Rs. 116,000 + 20% to Rs. 3.2 million; Rs. 316,000 + 25% to Rs. 4.1 million; Rs. 541,000 + 29% to Rs. 5.6 million; Rs. 976,000 + 32% to Rs. 7 million; and Rs. 1,424,000 + 35% above Rs. 7 million. No Section 4AB surcharge applies for this year.

Who counts as a salaried individual for these slabs?

A person whose salary income is at least 75% of their taxable income. If salary is less than 75% of the total, for example a freelancer or someone whose business income dominates, the non-salaried slab table applies instead, and its rates are higher at the same income.

Do these rates apply to the return I am filing now?

No. The return due now is for Tax Year 2026 (1 July 2025 to 30 June 2026), and it uses the previous year's slabs, including the 23% and 30% bands and a 9% surcharge above Rs. 10 million. FBR extended its deadline to 31 October 2026. The 2026-27 slabs apply to salary earned from 1 July 2026 and to the return you will file in 2027.

Salary Tax 2026-27 Pakistan: Monthly Tax Table + Calculator

Quick answer

The new salary tax slabs for 2026-27 (Tax Year 2027) come from the Finance Act 2026 and apply to salary paid from 1 July 2026. There are eight slabs: income up to PKR 600,000 a year is taxed at 0%, and the top rate of 35% now starts above PKR 7,000,000 instead of PKR 4,100,000. The middle bands were cut from 23% and 30% to 20% and 25%, and the Section 4AB surcharge on high earners has been removed for this tax year. Every figure below is taken from the Finance Act 2026 published by the FBR . If you want the full filing walkthrough rather than just the rate card, start with our pillar guide on how to file as a salaried person in 2026-27 .

Tax slabs 2026-27 for salaried individuals

These rates apply where salary is at least 75% of your taxable income. They are the rates your employer withholds against from July 2026 onward.

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

Surcharge: none for Tax Year 2027. The Finance Act 2026 states that no Section 4AB surcharge is payable for this year.

Monthly salary tax 2026-27

Tax on common monthly salaries under the 2026-27 slabs, worked out from the table above. The figures are for taxable salary, which is gross pay minus exempt allowances such as medical allowance up to 10% of basic salary.

PKR 50,000 a month: no tax (PKR 600,000 a year is the 0% band)
PKR 100,000 a month: PKR 500 a month, PKR 6,000 a year (same as last year)
PKR 150,000 a month: PKR 6,000 a month, PKR 72,000 a year (same as last year)
PKR 200,000 a month: PKR 13,000 a month, PKR 156,000 a year (last year PKR 13,500 a month)
PKR 250,000 a month: PKR 23,000 a month, PKR 276,000 a year (last year PKR 25,000 a month)
PKR 300,000 a month: PKR 34,667 a month, PKR 416,000 a year (last year PKR 38,833 a month)
PKR 400,000 a month: PKR 62,000 a month, PKR 744,000 a year (last year PKR 71,750 a month)
PKR 500,000 a month: PKR 92,000 a month, PKR 1,104,000 a year (last year PKR 106,750 a month)

For any other amount, enter your monthly pay in our salary tax calculator and it applies the same slabs.

What changed from 2025-26

The first three bands are unchanged, so anyone earning up to PKR 2,200,000 a year pays the same as last year. Above that, every band is lower or wider. The 23% band is now 20%, the 30% band is now 25%, and two new bands at 29% and 32% sit between PKR 4,100,000 and PKR 7,000,000. The 35% rate, which used to hit everything above PKR 4,100,000, now starts at PKR 7,000,000. Our Budget 2026-27 breakdown covers the rest of the budget changes for filers.

Filing your 2025-26 return? Use last year's slabs

The return you file now is for Tax Year 2026 (1 July 2025 to 30 June 2026), and it uses the previous year's rates, not the table above. FBR extended the deadline for this return to 31 October 2026 . The full story is in our tax return deadline guide . The Tax Year 2026 salaried slabs are:

Up to PKR 600,000: 0%
PKR 600,001 to 1,200,000: 1% of the amount above 600,000
PKR 1,200,001 to 2,200,000: PKR 6,000 + 11% of the amount above 1,200,000
PKR 2,200,001 to 3,200,000: PKR 116,000 + 23% of the amount above 2,200,000
PKR 3,200,001 to 4,100,000: PKR 346,000 + 30% of the amount above 3,200,000
Above PKR 4,100,000: PKR 616,000 + 35% of the amount above 4,100,000

For Tax Year 2026, a 9% surcharge applies to the computed tax of salaried individuals whose taxable income exceeds PKR 10,000,000.

How it works

Pakistani salaried tax is calculated on your annual taxable salary, which is gross salary minus a short list of exempt allowances and admissible deductions. The result is then run through the slabs. The slabs are progressive: each rupee is taxed at the rate of the band it falls into, not your whole salary at the top rate. The legal basis is Division I, Part I of the First Schedule to the Income Tax Ordinance 2001 . Before you drop your gross number into the table, strip out the items that are not taxable. Medical allowance up to 10% of basic salary is exempt, and approved deductions reduce taxable income further. Applying them before you reach the slab table is where real savings show up.

Worked example

Consider Ayesha, a marketing manager in Lahore. Her basic salary is PKR 100,000 per month, with a house rent allowance of PKR 45,000 and a medical allowance of PKR 10,000. Her gross pay is PKR 155,000 a month, or PKR 1,860,000 a year. Her medical allowance of PKR 120,000 a year is exempt because it is exactly 10% of her basic, so her taxable salary is PKR 1,740,000. That lands in the third slab: PKR 6,000 plus 11% of 540,000, which is PKR 65,400 a year, or about PKR 5,450 a month. Her bill is the same under both years' tables, because the first three bands did not change.

Bilal, a software engineer, has an annual taxable salary of PKR 2,880,000. For 2026-27 he pays PKR 116,000 plus 20% of PKR 680,000, which is PKR 252,000 a year. Under last year's 23% rate the same salary cost PKR 272,400, so the budget saves him PKR 20,400.

Sana, a country head, has a taxable salary of PKR 5,700,000. For 2026-27 she pays PKR 976,000 plus 32% of PKR 100,000, which is PKR 1,008,000 . Last year she would have paid PKR 616,000 plus 35% of PKR 1,600,000, which is PKR 1,176,000, so she saves PKR 168,000. You can check any salary in seconds with our salary tax calculator , which lets you switch between both tax years.

Mistakes to avoid

Using the wrong year's table. This is the most common error this season. The 2026-27 slabs govern what your employer deducts now. The return due on 31 October 2026 uses the Tax Year 2026 slabs. Mixing them up produces a wrong refund or a wrong demand.

Treating gross salary as taxable salary. People plug the number from the offer letter straight into the slab table without removing exempt medical allowance or admissible deductions, which inflates the bill.

Applying the top rate to the whole salary. A salary of PKR 2,500,000 is not taxed at 20% on the entire amount. Only the portion above PKR 2,200,000 is taxed at 20%; the rest is taxed at the lower rates below it.

Adding a surcharge that no longer exists. For 2026-27 there is no Section 4AB surcharge. It applied in Tax Year 2026, at 9% for salaried individuals above PKR 10,000,000, and only matters for the return you are filing now.

FAQ

Are the 2026-27 slabs the same as last year?

No. The bands up to PKR 2,200,000 are unchanged, but every band above that is lower, two new bands were added, and the 35% rate now starts at PKR 7,000,000. The surcharge was also removed for Tax Year 2027.

Is the first PKR 600,000 really tax-free?

Yes. Annual taxable salary up to PKR 600,000 is taxed at 0%. You still benefit from filing a return, because filing is what puts you on the Active Taxpayer List and gets you the lower withholding rates.

Is there still a surcharge on high earners?

Not for 2026-27. The Finance Act 2026 provides that no Section 4AB surcharge is payable for Tax Year 2027. For the Tax Year 2026 return, salaried individuals above PKR 10,000,000 pay a 9% surcharge on the computed tax.

What about bonuses and arrears?

Bonuses are part of salary income and flow through the same slabs. Arrears that relate to earlier years can be taxed at the rate of the year they relate to if that produces a lower bill, under Section 12(7) of the Ordinance.

Where do I file once I know my tax?

On the FBR IRIS portal. Our pillar guide on filing as a salaried person covers the full workflow, including how to reconcile what was deducted at source against what the slabs say you owe.

By the TaxFiler Editorial Team

New Tax Slabs 2026-27 Pakistan for Salaried Individuals