Quick answer Salaried taxpayers in Pakistan for tax year 2026-27 pay income tax across six progressive slabs, starting at zero on annual salary. up to PKR 600,000 and rising to 35% on income above PKR 4,100,000, with a 10% surcharge layered on top for those above PKR 10,000,000. The rates below are drawn directly from the Finance Act notified by the Federal Board of Revenue . 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 and come back to this page for the numbers. ## Context
"What are the new tax slabs?" is the single most searched tax question in Pakistan every July, and for good reason. HR teams update payroll software against the rates published in the annual Finance Act, and most salaried employees. only notice the change when their take-home shifts in the first pay cycle of the new fiscal year. The slabs for 2026-27 carry forward the structure introduced in the previous budget, with modest relief at. the lower end and continued pressure on high earners through the surcharge on income above one crore. The people asking this question fall into three buckets. First, new hires and promoted staff who want to know what a raise actually means after tax. Second, finance and HR managers running payroll corrections before the first salary run of the year. Third, late filers trying to reconcile what was deducted from their salary against what they actually owe on the FBR Iris portal. All three need the same thing: the official slab table, a worked example that matches real Pakistani salaries, and a pointer to what else reduces the bill. ## 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 progressive slabs. Progressive means each rupee is taxed at the rate for the slab it falls into, not your whole salary at the top rate. The 2026-27 salaried slabs, notified under the Income Tax Ordinance 2001 and the current Finance Act, are: | Annual taxable salary (PKR) | Tax rate | | --- | --- | | 0 to 600,000 | 0% | | 600,001 to 1,200,000 | 1% of the amount above 600,000 | | 1,200,001 to 2,200,000 | 6,000 + 11% of the. amount above 1,200,000 | | 2,200,001 to 3,200,000 | 116,000 + 23% of the amount above 2,200,000 | | 3,200,001 to 4,100,000 | 346,000 + 30% of the amount above 3,200,000 | | Above 4,100,000 | 616,000 + 35% of the amount above 4,100,000 | A 10% surcharge applies on the computed tax where annual taxable salary exceeds PKR 10,000,000. 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, employer provident fund contributions within limits are exempt, and several approved deductions reduce taxable income further. Our companion pieces on allowances and deductions for salaried employees and how to claim medical expenses walk through each line item. Applying them before you hit the slab table is where real tax savings show up, not after. ## 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 monthly pay is PKR 155,000, or PKR 1,860,000 a year. Her medical allowance of PKR 120,000 is fully exempt because it sits at exactly 10% of her basic. Her taxable salary is therefore PKR 1,740,000. That lands her in the third slab. Tax is PKR 6,000 fixed plus 11% of (1,740,000 - 1,200,000), which is 11% of 540,000, or PKR 59,400. Total annual tax: PKR 65,400, or roughly PKR 5,450 a month. Now scale up. Bilal, a software engineer earning PKR 200,000 basic with a PKR 40,000 house allowance, has annual taxable salary around PKR 2,880,000 after exempt items. He pays PKR 116,000 plus 23% of PKR 680,000, which is PKR 272,400 a year. At the top, consider Sana, a country head on PKR 500,000 monthly, taxable salary PKR 5,700,000. She pays PKR 616,000 plus 35% of PKR 1,600,000, which is PKR 1,176,000 a year. Because her income is below one crore, no surcharge applies. You can sanity-check any of these with a salary tax calculator for Pakistan, but doing the arithmetic once by hand is the fastest way to spot payroll mistakes. ## Mistakes to avoid
Three errors show up in almost every reconciliation we see. First, treating gross salary as taxable salary. People plug the number from the offer letter into the slab table without removing exempt medical allowance or admissible deductions. On a PKR 1,860,000 package, that single mistake inflates the tax bill by several thousand rupees. Second, applying the top slab rate to the whole salary. The slabs are progressive, so a salary of PKR 2,500,000 is not taxed at 23% on the entire amount. Only the portion above PKR 2,200,000 attracts 23%. The rest is taxed at the lower rates below it. If your mental math ever produces a tax bill that feels too large, check for this. Third, forgetting the 10% surcharge above PKR 10,000,000. High earners sometimes calculate tax cleanly through the slabs and then miss the surcharge, which is applied on the computed tax, not on the salary. For a taxable salary of PKR 12,000,000, the surcharge alone adds roughly PKR 231,000 on top of the base tax. Payroll systems usually get this right, but self-prepared returns often miss it. ## FAQ
**Are these slabs the same as last year?** The slab boundaries and rates for 2026-27 are broadly continued from the prior year's Finance Act. Always confirm against the current year's notification on fbr.gov.pk before filing, because mid-year finance amendments do occur. **Is the first PKR 600,000 really tax-free?** Yes. Annual taxable salary up to PKR 600,000 is taxed at zero. You still have to file a return if you are on the Active Taxpayer List or want to be, but no income tax is due on that slice. **Does the 10% surcharge apply to everyone above PKR 4,100,000?** No. The surcharge is on annual taxable salary above PKR 10,000,000. Between PKR 4,100,000 and PKR 10,000,000 you pay the 35% top slab on the excess, but no surcharge. **What about bonuses and arrears?** Bonuses are part of salary income and flow through the same slabs. Arrears relating to prior years can be taxed using the rate of the year they relate to if that produces a lower bill, under section 12(7) of the Ordinance. **Is medical allowance always exempt?** Only up to 10% of basic salary, and only if your employer is not also reimbursing actual medical expenses under a separate scheme. Pick one or the other. **Where do I file once I know my tax?** Through 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