Salary Income Tax Calculator 2026-27

Pakistan taxes salary in slabs. Your taxable income for the year is your salary plus any bonus, less allowances that are exempt and less zakat you paid. The tax is a fixed amount for the slabs below yours plus a percentage of the part of your income that falls in your slab. Only the rupees inside a slab are taxed at that slab's rate, so moving into a higher slab never taxes the money you earned below it more heavily.

Monthly tax is the yearly figure divided by 12. Your employer deducts it from each salary under section 149 at your average rate for the year, then you file a return on the FBR's IRIS portal to reconcile it. Take-home pay is your salary less that tax. The calculator also reports your effective rate (tax as a share of income) and your marginal rate (the rate on your next rupee), which is the number that matters when you weigh a raise or a bonus.

A worked example

For a salary of Rs 200,000 a month (Rs 2,400,000 a year), the tax year 2027 slab starts at Rs 2,200,000 with Rs 116,000 fixed and a 20% rate. The yearly tax is Rs 116,000 + 20% of Rs 200,000 = Rs 156,000, or Rs 13,000 a month, leaving Rs 187,000. In tax year 2026 the same salary paid Rs 13,500 a month because that slab was taxed at 23%. A yearly bonus of Rs 400,000 on top would add Rs 80,000 of tax, a marginal rate of 20%.

The Finance Act 2026 lowered the rates above Rs 2,200,000 of taxable income and split the old top slab into three, so the highest earners benefit most. The first three slabs did not change. These are the slabs for salaried individuals, applied to taxable income for the year.

For comparison, the slabs for tax year 2026 (July 1, 2025 to June 30, 2026) were:

Tax year 2026 also carried a 9% surcharge on the tax of salaried people with taxable income above Rs 10,000,000. That surcharge is gone for salaried individuals from tax year 2027, which is why the saving at the top is large: at Rs 1,000,000 a month the yearly tax falls from Rs 3,685,290 to Rs 3,174,000.

This table is worked out by the same engine as the calculator above, for a salaried person with no bonus, no exempt allowance and no other income. "Saving" is how much less you pay each month under the Finance Act 2026 than you did in tax year 2026.

Two patterns stand out. Anyone earning up to Rs 50,000 a month pays nothing, and up to about Rs 183,000 a month the tax is identical in both years because the budget left the lower slabs alone. Above that, every slab got cheaper, and the monthly saving grows quickly. The Rs 1,000,000 row in tax year 2026 includes the surcharge.

• Medical allowance. Salary includes most allowances, bonuses and perquisites. A medical allowance is exempt up to 10% of your basic pay when your contract provides no free treatment or reimbursement (Second Schedule, Part I, clause (139)). On Rs 200,000 a month with a basic of Rs 133,000, that saves Rs 31,920 a year.
• Provident fund, employer share. Your employer's contribution to a recognised provident fund counts as salary only above 10% of your salary or Rs 150,000 a year, whichever is lower (Sixth Schedule, Part I, rule 3). Moving Rs 150,000 of a Rs 200,000 a month package into the fund saves Rs 30,000 a year, and the fund pays it to you when you leave.
• Zakat. Zakat paid under the Zakat and Ushr Ordinance is a deductible allowance, so it reduces taxable income rupee for rupee. Use the zakat calculator for the amount.
• Pension contributions. Money you put into a Voluntary Pension System account earns a tax credit worth your average tax rate times the contribution, up to 20% of taxable income. The VPS pension calculator shows the credit and what the account grows to.
• Donations. Gifts to approved recipients (government education boards, universities, hospitals, approved non-profits) earn a credit on the same average-rate basis, up to 30% of taxable income. Pay by crossed cheque or bank transfer and keep the receipt, because the employer needs documentary evidence to apply it in your monthly deduction.
• Home loan markup. Markup paid on a loan to build or buy your house (land up to 2,500 sq ft, or a flat up to 2,000 sq ft) earns a credit at your average rate, up to 30% of taxable income (section 63A). Rs 600,000 of markup on a Rs 200,000 a month salary saves Rs 39,000 a year. After a claim you cannot claim it for another house for 15 tax years.
• Children's school fees. If your taxable income is under Rs 1,500,000, 5% of the tuition fees you pay comes off it, up to Rs 60,000 per child and 25% of your income (section 60D). You claim it in your return, because the employer ignores it when deducting tax.

Some reliefs that are still widely repeated no longer apply: deduction for profit on a house loan (section 60C) (omitted by the Finance Act 2022; since the Finance Act 2025 the markup earns a credit under section 63A instead); credit for buying new shares or life insurance (section 62) (omitted by the Finance Act 2022); credit for health insurance premiums (section 62A) (omitted by the Finance Act 2022); 25% tax reduction for full-time teachers and researchers (ended after tax year 2025); tax reduction for senior citizens on salary (omitted by the Finance Act 2014; only pension income has an age relief). Gratuity, provident fund and pension payouts have their own rules; see the gratuity calculator and the provident fund calculator.

The salaried slabs are cheaper than the slabs for business people, but you only get them if salary is more than 75% of your taxable income. Take a salary of Rs 2,400,000 a year. You can earn up to Rs 799,999 of other income, such as rent or business profit, and stay on the salaried slabs: with Rs 799,999 of other income your tax on Rs 3,199,999 is Rs 316,000. At Rs 800,000, salary is exactly 75% and no longer enough, the non-salaried slabs apply to the whole Rs 3,200,000, and the tax jumps to Rs 650,000.

This cliff is built into the law, so it pays to check it before you take on side income. Add other income under More options and the calculator warns you when it applies. For landlords see the rental income tax calculator, and for business or freelance income the business income tax calculator.

Salaried individuals file electronically on the FBR's IRIS portal. The return for tax year 2027 is due on September 30 after the tax year ends, so by September 30, 2027, unless the FBR extends the date. Use your payslips or the employer's annual salary certificate for the tax deducted, add credits and other income, and pay any balance or claim a refund of excess deduction.

Filing every year keeps you on the Active Taxpayers List. Being off it doubles the withholding tax on many payments, including dividends (30% instead of 15% on most shares) and the profit you earn on bank deposits. If you invest on the PSX, see the capital gains tax calculator and the dividend tax calculator.