If you earn a salary in Pakistan, the Finance Act 2026 changed the rules on what you owe — and the good news is that most salaried people pay a little less this year. The surcharge that used to sit on top of higher incomes has been abolished, and the tax-free threshold stays at Rs 600,000 per year (Rs 50,000 a month). Earn that or less, and you owe zero income tax.
This guide walks through every slab for 2026-27, shows you how to calculate your own tax with a worked example, and clears up the misunderstandings that trip people up every year.
The 2026-27 slabs for salaried individuals
Pakistan uses a progressive system: higher slices of your income are taxed at higher rates, but the lower slices always keep their lower rate. Here are the official annual slabs:
| Annual taxable income | Tax |
|---|---|
| Up to Rs 600,000 | 0% |
| Rs 600,001 – 1,200,000 | 1% of the amount above Rs 600,000 |
| Rs 1,200,001 – 2,200,000 | Rs 6,000 + 11% of the amount above Rs 1,200,000 |
| Rs 2,200,001 – 3,200,000 | Rs 116,000 + 20% of the amount above Rs 2,200,000 |
| Rs 3,200,001 – 4,100,000 | Rs 316,000 + 25% of the amount above Rs 3,200,000 |
| Rs 4,100,001 – 5,600,000 | Rs 541,000 + 29% of the amount above Rs 4,100,000 |
| Rs 5,600,001 – 7,000,000 | Rs 976,000 + 32% of the amount above Rs 5,600,000 |
| Above Rs 7,000,000 | Rs 1,424,000 + 35% of the amount above Rs 7,000,000 |
Worked example: Rs 150,000 monthly salary
Annual income is Rs 1,800,000, which falls in the Rs 1.2M–2.2M band. The math:
- Fixed amount for the band: Rs 6,000
- Plus 11% of (1,800,000 − 1,200,000) = 11% × 600,000 = Rs 66,000
- Total annual tax: Rs 72,000 — about Rs 6,000 per month
Notice the effective rate is only 4% of total income, even though the person sits in the "11% slab". This is the single most misunderstood point in Pakistani salary tax, and we will come back to it below.
Monthly tax quick reference
| Monthly salary | Approx. monthly tax |
|---|---|
| Rs 50,000 | Rs 0 |
| Rs 100,000 | Rs 500 |
| Rs 150,000 | Rs 6,000 |
| Rs 200,000 | Rs 15,167 |
| Rs 300,000 | Rs 41,333 |
| Rs 500,000 | Rs 103,417 |
These are estimates before any adjustments. For your exact figure, run the numbers through our free income tax calculator — it shows the full slab-by-slab breakup.
How your employer deducts it
Most salaried employees never file a separate payment: the employer divides your estimated annual tax into twelve equal parts and withholds it from each month's pay. This is an adjustable advance, not a final extra charge — when you file your return, the withheld amount counts toward what you owe.
Three mistakes that cost people money
1. Confusing marginal and effective rates. If you earn Rs 1.8M a year you are not "paying 11%" — only the slice above Rs 1.2M is taxed at 11%. Your effective rate is far lower.
2. Ignoring the filer advantage. Being on the Active Taxpayers List doesn't change these salary slabs, but it sharply reduces withholding on everything else — bank profits, property deals, vehicle purchases. Filing once pays for itself many times over.
3. Forgetting the abolished surcharge. Older articles still mention a surcharge on high incomes. For 2026-27 it is gone — do not add it to your math.
Bottom line
For 2026-27 the system is simpler and slightly lighter than before: Rs 600,000 tax-free, eight clean bands, no surcharge. Plug your salary into the income tax calculator to see your monthly deduction and take-home pay in seconds.