Overview of Tax Slabs for FY 2026-27
Pakistan's progressive tax structure categorizes salaried individuals into progressive tiers starting from an annual threshold of Rs. 600,000 (Rs. 50,000 per month).
Salaries below Rs. 600,000 remain completely exempt from income tax (0%). Income exceeding Rs. 600,000 is taxed incrementally across designated slabs.
| Taxable Income Bracket (Annual PKR) | Base Fixed Tax | Tax Rate on Excess |
|---|---|---|
| Up to Rs. 600,000 | Rs. 0 | 0% |
| Rs. 600,001 – Rs. 1,200,000 | Rs. 0 | 5% of amount exceeding Rs. 600,000 |
| Rs. 1,200,001 – Rs. 2,200,000 | Rs. 30,000 | 15% of amount exceeding Rs. 1,200,000 |
| Rs. 2,200,001 – Rs. 3,200,000 | Rs. 180,000 | 25% of amount exceeding Rs. 2,200,000 |
| Rs. 3,200,001 – Rs. 4,100,000 | Rs. 430,000 | 30% of amount exceeding Rs. 3,200,000 |
| Above Rs. 4,100,000 | Rs. 700,000 | 35% of amount exceeding Rs. 4,100,000 |
High-Income Surcharges (Above Rs. 10 Million)
Under the Finance Act, high earners earning in excess of Rs. 10,000,000 annually are subject to a 10% super surcharge on their total calculated income tax liability.
This surcharge applies across both salaried executives and non-salaried business individuals.
Practical Salary Tax Calculation Examples
Here is how your take-home pay is affected across common salary benchmarks in Karachi, Lahore, and Islamabad:
| Monthly Gross Salary | Annual Gross | Monthly Income Tax | Monthly Net In-Hand |
|---|---|---|---|
| Rs. 100,000 | Rs. 1,200,000 | Rs. 2,500 | Rs. 97,500 |
| Rs. 150,000 | Rs. 1,800,000 | Rs. 10,000 | Rs. 140,000 |
| Rs. 250,000 | Rs. 3,000,000 | Rs. 31,667 | Rs. 218,333 |
| Rs. 400,000 | Rs. 4,800,000 | Rs. 78,750 | Rs. 321,250 |
| Rs. 600,000 | Rs. 7,200,000 | Rs. 148,750 | Rs. 451,250 |
Simplify Your Budgeting & Money Management
Take the stress out of your finances. Kepto automatically organizes your everyday spending, helps you budget easily, and shows where you can save more each month — 100% free with no bank passwords required.
Frequently Asked Questions
How is Medical Allowance treated for tax purposes in Pakistan?
Medical allowance provided by an employer is exempt from income tax up to 10% of basic salary, provided the employer does not provide free medical treatment/hospitalization coverage.
What is the employee EOBI contribution rate in 2026?
The employee EOBI contribution is 1% of the statutory minimum wage (Rs. 370/month in Federal/Punjab, and Rs. 320/month in Sindh), while employers contribute the remaining 5%.