Salaried tax for 1 July 2025 to 30 June 2026, on the Finance Act 2025 slabs — including the surcharge cliff at PKR 10,000,000.
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Pakistan taxes salaried income on six slabs, and salaried people get their own schedule — the rates below are lower than those charged to non-salaried individuals and associations of persons on the same income. The first PKR 600,000 is free of tax, and the top rate of 35% starts at PKR 4,100,000.
The slabs are not independent bands. Each row states a fixed amount that already contains the tax on everything below it, plus a marginal rate on the excess. Adding up bands separately double-counts, which is the most common error in a manual calculation.
The part that catches people is section 4AB. Once taxable income passes PKR 10,000,000, a 9% surcharge applies to the whole income tax bill — not to the excess. It is a cliff, not a taper, and crossing it by a single rupee costs PKR 241,290.
Tax year 2026 runs from 1 July 2025 to 30 June 2026, so it does not line up with the calendar year. A salary change in, say, March falls in the same tax year as the previous July.
| Taxable income | Rate | Notes |
|---|---|---|
| PKR 0 – PKR 600,000 | 0% | No tax |
| PKR 600,000 – PKR 1,200,000 | 0.01% | 1% of the excess |
| PKR 1,200,000 – PKR 2,200,000 | 0.11% | PKR 6,000 plus 11% of the excess |
| PKR 2,200,000 – PKR 3,200,000 | 0.23% | PKR 116,000 plus 23% of the excess |
| PKR 3,200,000 – PKR 4,100,000 | 0.3% | PKR 346,000 plus 30% of the excess |
| PKR 4,100,000 and above | 0.35% | PKR 616,000 plus 35% of the excess |
Each row includes the tax on all income below it. The rate shown applies only to the amount above that row’s threshold.
There are six. Only the row containing your income matters — you do not work through the ones below it, because their tax is already inside the fixed amount your row states.
On PKR 2,400,000 the governing row starts at PKR 2,200,000 with a fixed PKR 116,000 and a 23% rate. The tax is PKR 116,000 + 23% × PKR 200,000.00 = PKR 162,000.00. Every row is continuous with the one below it: at PKR 3,200,000 the fourth row produces exactly PKR 346,000, which is the fifth row's fixed amount.
If taxable income exceeds PKR 10,000,000, add 9% of the income tax you just calculated. Note what it is charged on: the tax, not the income, and the whole of it rather than the part above the threshold.
Pakistan gives salaried filers no standard deduction — the PKR 600,000 exemption is simply the first slab taxed at 0%. Zakat paid under the Zakat and Ushr Ordinance and certain other allowances reduce taxable income before the slabs apply, which can matter a great deal if they carry you back under the surcharge threshold.
Monthly figures are the annual amount divided by twelve.
| Component | Annual | Monthly |
|---|---|---|
| Annual salary | PKR 200,000.00 | PKR 2,400,000.00 |
| Tax on the first PKR 2,200,000 | (PKR 9,666.67) | (PKR 116,000.00) |
| 23% on the PKR 200,000.00 above it | (PKR 3,833.33) | (PKR 46,000.00) |
| Total income tax | PKR 13,500.00 | PKR 162,000.00 |
| Take-home pay | PKR 186,500.00 | PKR 2,238,000.00 |
On PKR 2,400,000 a year, income tax takes PKR 162,000.00, leaving PKR 2,238,000.00 — about PKR 186,500.00 a month. The effective rate is 6.75% even though the marginal rate is 23%, because the slabs below are taxed at lower rates or not at all.
One rupee of extra income, and what it costs.
| Component | Taxable income | Total tax |
|---|---|---|
| PKR 10,000,000 | PKR 2,681,000.00 | |
| PKR 10,000,000 + PKR 1 | PKR 2,922,290.38 | |
| Cost of that one rupee | PKR 241,290.38 | |
Earning one rupee more than PKR 10,000,000 in taxable income increases the tax bill by PKR 241,290.38, because the 9% surcharge lands on the entire income tax rather than on the excess. Anyone close to the threshold is worse off just above it than just below — the income has to rise by roughly PKR 700,000 before they are back where they started.
Deductible allowances such as zakat reduce taxable income, and can bring someone back under the threshold.
1 July 2025
Rates on taxable income up to PKR 3,200,000 were reduced to give relief to lower and middle earners, and the surcharge for salaried individuals came down from 10% to 9%. The 10% rate still applies to non-salaried individuals and associations of persons.
PKR 162,000.00, leaving PKR 2,238,000.00 — around PKR 186,500.00 a month. That income falls in the row starting at PKR 2,200,000, so the tax is a fixed PKR 116,000 plus 23% of the PKR 200,000.00 above it.
No, and doing so is the most common mistake. Each row states a fixed amount that already includes all the tax on income below its threshold. You find the one row your income falls in and apply that fixed amount plus its rate on the excess. Working through the bands and summing them counts the lower income twice.
Section 4AB charges it once taxable income exceeds PKR 10,000,000. It is 9% of your income tax, not of your income, and it applies to the whole tax bill rather than only to the part above the threshold. That makes it a cliff: at exactly PKR 10,000,000 the tax is PKR 2,681,000.00, and one rupee later it is PKR 2,922,290.38.
Yes. Salaried individuals have their own slab table and a lower surcharge — 9% against 10% for non-salaried individuals and associations of persons. To use the salaried table, salary generally has to be the dominant part of your income.
No. The PKR 600,000 exemption is not a deduction — it is simply the first slab, taxed at 0%. What does reduce taxable income is deductible allowances, principally zakat paid under the Zakat and Ushr Ordinance, along with certain approved contributions. Those come off before the slabs are applied.
From 1 July 2025 to 30 June 2026 for tax year 2026. It is a July-to-June year, not a calendar year, so a raise in January and a raise in the preceding September fall in the same tax year.
No. It applies the salaried schedule. Business income, income from property and capital gains are taxed under different rules, and an individual whose income is mostly non-salaried uses a separate, higher slab table.
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