Income tax slabs Pakistan: a practical guide
Pakistan salary income tax is calculated through progressive slabs. Each slab has an income range, a fixed tax amount for lower completed bands and a marginal percentage for income above the current threshold. This page compares the standard salaried-person schedule for FY 2026-27 with FY 2025-26 and explains how to read the formulas correctly. It supports the Income Tax Calculator but does not replace official legislation or professional advice.
People searching for FBR salary tax slabs often make one of two mistakes: applying the highest percentage to the whole salary or using a monthly amount directly against an annual table. The correct approach is to determine annual taxable salary first. A monthly salary of Rs. 200,000 becomes Rs. 2,400,000 for a full twelve-month year before the relevant formula is applied.
FY 2026-27 salary income tax slabs
| Annual taxable salary | Rate and fixed amount |
|---|---|
| Up to Rs. 600,000 | No tax |
| Rs. 600,001 to Rs. 1,200,000 | 1% above Rs. 600,000 |
| Rs. 1,200,001 to Rs. 2,200,000 | Rs. 6,000 + 11% above Rs. 1,200,000 |
| Rs. 2,200,001 to Rs. 3,200,000 | Rs. 116,000 + 20% above Rs. 2,200,000 |
| Rs. 3,200,001 to Rs. 4,100,000 | Rs. 316,000 + 25% above Rs. 3,200,000 |
| Rs. 4,100,001 to Rs. 5,600,000 | Rs. 541,000 + 29% above Rs. 4,100,000 |
| Rs. 5,600,001 to Rs. 7,000,000 | Rs. 976,000 + 32% above Rs. 5,600,000 |
| Above Rs. 7,000,000 | Rs. 1,424,000 + 35% above Rs. 7,000,000 |
FY 2025-26 salary income tax slabs
| Annual taxable salary | Rate and fixed amount |
|---|---|
| Up to Rs. 600,000 | No tax |
| Rs. 600,001 to Rs. 1,200,000 | 1% above Rs. 600,000 |
| Rs. 1,200,001 to Rs. 2,200,000 | Rs. 6,000 + 11% above Rs. 1,200,000 |
| Rs. 2,200,001 to Rs. 3,200,000 | Rs. 116,000 + 23% above Rs. 2,200,000 |
| Rs. 3,200,001 to Rs. 4,100,000 | Rs. 346,000 + 30% above Rs. 3,200,000 |
| Above Rs. 4,100,000 | Rs. 616,000 + 35% above Rs. 4,100,000 |
FY 2025-26 also has a 9% surcharge on calculated salary income tax when annual taxable salary exceeds Rs. 10 million. The surcharge is added after base tax is calculated. It is not a separate 9% charge on total salary.
What changed between the two fiscal years?
| Area | FY 2025-26 | FY 2026-27 |
|---|---|---|
| Tax-free annual salary | Rs. 600,000 | Rs. 600,000 |
| Rate above Rs. 2.2m to Rs. 3.2m | 23% | 20% |
| Rate above Rs. 3.2m to Rs. 4.1m | 30% | 25% |
| Intermediate bands above Rs. 4.1m | No separate 29% or 32% bands | 29% and 32% bands |
| Start of 35% band | Above Rs. 4.1m | Above Rs. 7m |
| Salary surcharge above Rs. 10m | 9% of calculated tax | Not applied by this schedule |
The lower tax-free limit and first two taxable bands remain the same in these schedules. The major differences are in the middle and upper bands. Because tax is progressive, the impact depends on the exact annual taxable salary rather than only the final marginal rate.
How the fixed tax amount is created
Consider FY 2026-27 annual taxable salary of Rs. 3,840,000. The applicable row starts with fixed tax of Rs. 316,000. That amount represents tax on all income through Rs. 3,200,000 under the lower bands. Only the Rs. 640,000 excess is multiplied by 25%. The result is Rs. 316,000 plus Rs. 160,000, or Rs. 476,000 annual tax.
The fixed amount prevents double counting and makes the table easier to use. You do not need to calculate every lower band again when the official schedule already provides the accumulated figure. However, a slab-by-slab calculation should produce the same result if every band is applied correctly.
Marginal rate versus effective tax rate
The marginal tax rate is the percentage that applies to the next part of income within the current band. The effective tax rate is total annual tax divided by annual taxable salary. For the Rs. 3,840,000 example, the marginal rate is 25% but the effective rate is about 12.40%. The effective rate is lower because some income is tax free and lower portions are taxed at lower rates.
This distinction matters when comparing salaries. A person does not lose money merely because a small increment moves income into a higher band. Only the additional income above the boundary is charged at the new marginal percentage. Net income should still increase, although the increase after tax is smaller.
Monthly salary and annual taxable income
Tax slab tables are annual. Multiply a consistent monthly taxable salary by twelve, then add taxable bonuses, arrears or benefits that are not already included. If salary changes during the year, calculate the actual annual total rather than multiplying the latest month by twelve. The multi-year and multi-period tools can help with planning, but actual employer records remain important.
Common tax slab calculation errors
- Using net salary instead of gross taxable salary.
- Applying the marginal rate to the entire annual income.
- Using FY 2026-27 rates for income earned in FY 2025-26.
- Ignoring the FY 2025-26 surcharge above Rs. 10 million.
- Adding a bonus twice when it is already included in annual salary.
- Treating business or rental income as salary without checking the separate rules.
- Assuming the calculator result is the same as tax already withheld or a refund due.
Salary tax examples by annual income
| Annual salary | FY 2025-26 estimated tax | FY 2026-27 estimated tax |
|---|---|---|
| Rs. 1,200,000 | Rs. 6,000 | Rs. 6,000 |
| Rs. 2,400,000 | Rs. 162,000 | Rs. 156,000 |
| Rs. 3,840,000 | Rs. 538,000 | Rs. 476,000 |
| Rs. 6,000,000 | Rs. 1,281,000 | Rs. 1,104,000 |
| Rs. 12,000,000 | Rs. 3,685,290 including surcharge | Rs. 3,174,000 |
These examples assume the entire amount is taxable salary and do not include credits, deductible allowances, exemptions or other income. They are rounded planning figures from the standard formulas.
Sources and verification
The current tables are based on the Finance Act 2026 and the Finance Act 2025. Check the FBR website for official notices, later amendments and filing guidance. The website is independent and is not endorsed by FBR.
Frequently asked questions about income tax slabs
Are these slabs for salaried individuals?
Yes. They describe the standard salaried-person schedule. Different rules can apply to non-salaried individuals, associations of persons and companies.
Does filer status change the salary slab?
The standard salary tax formula is shown here. Filer status can affect many withholding transactions, but users should check the specific provision relevant to each transaction rather than changing the salary slab without authority.
What happens at a slab boundary?
The lower completed bands remain taxed under their own rates. Only income above the boundary is charged at the next marginal rate.