How to use the salary tax calculator
- Choose whether you know your monthly or your annual salary.
- Enter your taxable salary. This is your gross pay minus any allowance that is exempt for you. For example, a medical allowance of up to 10% of basic pay is exempt when your employer does not give free treatment or reimburse medical bills.
- Add any bonus or other one-off salary you expect this tax year (optional).
- Read your tax per month and per year, your take-home pay, and the slab-by-slab breakdown.
How salary tax is calculated
The rates come from the table in Division I, Part I of the First Schedule to the Income Tax Ordinance 2001, as replaced by the Finance Act 2026 (Gazette of Pakistan, 26 June 2026). They apply to tax year 2027, which runs from 1 July 2026 to 30 June 2027 and is usually called 2026-27. They are for people whose salary is more than 75% of their taxable income.
Each rate only applies to the part of your income inside that slab. Moving into a higher slab never makes your take-home pay fall. The Finance Act 2026 also removed the 9% surcharge that salaried people earning over Rs 10 million paid in 2025-26, so there is no surcharge on salary this year.
| Yearly taxable income | Tax for 2026-27 |
|---|---|
| Up to Rs 600,000 | 0% |
| Rs 600,001 to Rs 1,200,000 | 1% of the amount over Rs 600,000 |
| Rs 1,200,001 to Rs 2,200,000 | Rs 6,000 + 11% of the amount over Rs 1,200,000 |
| Rs 2,200,001 to Rs 3,200,000 | Rs 116,000 + 20% of the amount over Rs 2,200,000 |
| Rs 3,200,001 to Rs 4,100,000 | Rs 316,000 + 25% of the amount over Rs 3,200,000 |
| Rs 4,100,001 to Rs 5,600,000 | Rs 541,000 + 29% of the amount over Rs 4,100,000 |
| Rs 5,600,001 to Rs 7,000,000 | Rs 976,000 + 32% of the amount over Rs 5,600,000 |
| Above Rs 7,000,000 | Rs 1,424,000 + 35% of the amount over Rs 7,000,000 |
Source: Finance Act 2026 and the FBR withholding tax rate card updated to 30 June 2026.
Worked example
The default is a salary of Rs 200,000 a month with no bonus.
- Yearly income: Rs 200,000 × 12 = Rs 2,400,000
- That falls in the Rs 2,200,001 to Rs 3,200,000 slab
- Tax: Rs 116,000 + 20% × (Rs 2,400,000 − Rs 2,200,000) = Rs 116,000 + Rs 40,000 = Rs 156,000 a year
- Monthly tax: Rs 156,000 ÷ 12 = Rs 13,000
- Take-home pay: Rs 200,000 − Rs 13,000 = Rs 187,000 a month
- Effective rate: 156,000 ÷ 2,400,000 = 6.5%
At the 2025-26 rates (23% in this slab), the same salary paid Rs 162,000, so the new slabs save Rs 6,000 a year.
Tax at common salaries
| Monthly salary | Monthly tax 2026-27 | Monthly tax 2025-26 | Take-home 2026-27 |
|---|---|---|---|
| Rs 100,000 | Rs 500 | Rs 500 | Rs 99,500 |
| Rs 150,000 | Rs 6,000 | Rs 6,000 | Rs 144,000 |
| Rs 300,000 | Rs 34,667 | Rs 38,833 | Rs 265,333 |
| Rs 500,000 | Rs 92,000 | Rs 106,750 | Rs 408,000 |
| Rs 1,000,000 | Rs 264,500 | Rs 307,108 | Rs 735,500 |
The cuts only help people earning more than Rs 2.2 million a year (about Rs 183,000 a month). Below that, nothing changed.
What this calculator does not cover
It is for salaried individuals only. Business income, rent, profit on savings, dividends and capital gains have their own rates. Tax credits and reductions, such as those for donations or pension fund contributions, are not deducted here, so your final tax can be a little lower.
Frequently asked questions
How much salary is tax-free in Pakistan in 2026-27?
Up to Rs 600,000 a year, or Rs 50,000 a month. Above that, you pay 1% on the part between Rs 600,000 and Rs 1,200,000, so a Rs 100,000 monthly salary pays Rs 500 a month.
How does my employer deduct tax every month?
Under section 149 of the Income Tax Ordinance, your employer estimates your salary for the whole tax year, works out the tax on it and deducts one-twelfth each month. A bonus is taxed as salary at your slab rates, so the deduction usually jumps in the month it is paid.
Do I still have to file a tax return if tax is deducted from my salary?
Yes, if your taxable income is above the tax-free limit you should file a return with the FBR on IRIS each year. Filing keeps you on the Active Taxpayers List, which means lower withholding tax on bank cash withdrawals, property, vehicles and electricity bills.
Is there a surcharge on high salaries in 2026-27?
No. The Finance Act 2026 replaced the 9% surcharge on salaried people with taxable income above Rs 10 million with "no surcharge shall be payable". The 10% surcharge for other individuals and associations of persons is a separate rule.
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Results are estimates for educational purposes and are not financial, tax or legal advice. See our disclaimer.