Pakistan Salary Tax Calculator (2025–26): A Complete, Friendly Guide

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Why a Pakistan Salary Tax Calculator Matters in 2025–26

If you earn a salary in Pakistan, your payslip changed again on 1 July 2025 (Tax Year 2026). The Finance Act, 2025, revised salaried tax slabs, slightly easing rates for lower and middle-income earners and trimming the surcharge for higher incomes. These tweaks affect how much tax is withheld each month by your employer under Section 149, and ultimately your take-home pay. A reliable Pakistan Salary Tax Calculator helps you:

• See your net salary (after income tax, Social Security/Medicare equivalents don’t apply here—just income tax and surcharges).
• Understand which slab you fall into and why.
• Plan contributions (e.g., voluntary pension, zakat, approved donations) that may reduce taxable income.
• Avoid surprises at year-end and keep evidence aligned for FBR.

Latest context: For Tax Year 2026 (FY 2025–26), salaried slabs are 0%, 1%, 11%, 23%, 30%, and 35% with thresholds at PKR 600k, 1.2m, 2.2m, 3.2m, and 4.1m, and a 9% surcharge on the calculated tax if your taxable income exceeds PKR 10 million. These are summarized by ICMA Pakistan and professional advisories after the Finance Act 2025. (ICMA International, KPMG Assets, Mercans Global Payroll & PEO, Federal Board of Revenue)

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How to Use the Pakistan Salary Tax Calculator (Step-by-Step)

1. Select Tax Year: Choose 2025–26 (Tax Year 2026) to reflect current slabs.
2. Enter Annual Gross Salary: Use your annual figure (monthly × 12). If your employer quotes cost-to-company, include only taxable salary components.
3. Adjust Taxable Income:
   • Subtract exempt portions (if any) per law (e.g., approved zakat as a deduction, certain donations eligible under relevant clauses, etc.).
   • If you receive pension from a former employer, note that separate reduced rates/thresholds may apply (see “Laws & Rates” below).
4. Click “Calculate”: The tool computes tax per slab + surcharge (if applicable) and shows annual and monthly withholding.
5. Review Results:
   • Total Income Tax (annual & monthly).
   • Effective Tax Rate (tax ÷ gross salary).
   • Take-Home Pay (gross – tax).
6. Explore What-Ifs: Change salary, add/remove deductions, and see how your net payslip changes before discussing with HR.
7. Save/Share (Optional): Export results as a PDF or copy the summary to send to your accountant/HR.

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How the Calculator Works (2025–26 Rules & Rates)

Current Salaried Slabs (Tax Year 2026)

For salaried persons (Section 12 income, withholding under Section 149), the annual taxable income is taxed at these progressive slabs:

1. Up to PKR 600,000: 0%
2. 600,001 – 1,200,000: 1% of the amount exceeding 600,000
3. 1,200,001 – 2,200,000: PKR 6,000 + 11% of the amount exceeding 1,200,000
4. 2,200,001 – 3,200,000: PKR 116,000 + 23% of the amount exceeding 2,200,000
5. 3,200,001 – 4,100,000: PKR 346,000 + 30% of the amount exceeding 3,200,000
6. Above 4,100,000: PKR 616,000 + 35% of the amount exceeding 4,100,000

These slab values for Tax Year 2026 are widely referenced by professional bodies and tax firms following the Finance Act 2025. (ICMA International)

Surcharge for High Incomes

If your taxable income exceeds PKR 10,000,000, a 9% surcharge applies to your calculated tax (reduced from 10% in the previous year). The calculator automatically adds this where applicable. (Mercans Global Payroll & PEO, KPMG Assets)

Withholding at Source (Payroll)

Employers must withhold tax monthly based on your projected annual taxable salary and deposit it with the FBR under Section 149. This is why your calculator gives both annual and monthly numbers—to align with payroll deductions. (See FBR circular index for current year guidance.) (Federal Board of Revenue)

Pension and Specific Relief Pointers

• Pension from a former employer: Finance Act 2025 introduced specific favorable treatment/thresholds for pension income in Tax Year 2026 (e.g., separate treatment up to certain limits, then 5% beyond). If you receive such income, use the calculator’s pension toggle or consult notes to apply the correct rule. (ICMA International)
• Donations/Zakat: Approved donations and zakat follow the Income Tax Ordinance, 2001 rules and Schedules; your taxable income may be reduced if conditions are met. (Consult your advisor for documentation requirements.)

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Real-Life Examples (Worked)

Note: Illustrations assume no deductions other than standard slab mechanics; your own situation may differ (e.g., donations, tax credits, pension).

Example 1 — Mid-Career Professional

Annual gross salary: PKR 1,800,000

• Falls in the 1,200,001–2,200,000 slab.
• Tax = 6,000 + 11% × (1,800,000 – 1,200,000)
• Tax = 6,000 + 0.11 × 600,000 = 6,000 + 66,000 = PKR 72,000
• Monthly withholding ≈ 6,000
• Effective tax rate ≈ 4.0%
• Estimated take-home (annual) ≈ 1,728,000; monthly ≈ 144,000

Example 2 — Upper-Middle Income

Annual gross salary: PKR 3,500,000

• Falls in the 3,200,001–4,100,000 slab.
• Tax = 346,000 + 30% × (3,500,000 – 3,200,000)
• Tax = 346,000 + 0.30 × 300,000 = 346,000 + 90,000 = PKR 436,000
• Monthly withholding ≈ 36,333
• Effective tax rate ≈ 12.46%
• Estimated take-home (annual) ≈ 3,064,000; monthly ≈ 255,333

Example 3 — Higher Income with Surcharge

Annual gross salary (taxable): PKR 12,000,000

• Falls in the Above 4,100,000 slab.
• Base Tax = 616,000 + 35% × (12,000,000 – 4,100,000)
• Excess = 7,900,000; 35% × 7,900,000 = 2,765,000
• Base Tax = 616,000 + 2,765,000 = 3,381,000
• Surcharge (9%) = 304,290
• Total Tax = 3,381,000 + 304,290 = PKR 3,685,290
• Monthly withholding ≈ 307,108
• Effective tax rate ≈ 30.71%
• Estimated take-home (annual) ≈ 8,314,710; monthly ≈ 692,893
  (Surcharge mechanics per Finance Act 2025 guidance.) (Mercans Global Payroll & PEO)

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Benefits of Using a Pakistan Salary Tax Calculator

• Clarity in Seconds: No manual tables; instant slab mapping and surcharge logic.
• Accurate Monthly Payroll View: Aligns with Section 149 withholding norms. (Federal Board of Revenue)
• Scenario Planning: Test increments, bonuses, or job offers and compare take-home.
• Evidence for HR/Advisors: Export or share calculations for payroll reconciliation.
• Compliance Confidence: Built on current-year rates (2025–26) and updated surcharge rules. (ICMA International, Mercans Global Payroll & PEO)
• Financial Wellness: See your effective tax rate and plan charitable giving or pension contributions within the legal framework.

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Pakistan Salary Tax Laws & Rates (Latest Year) – Quick Reference

• Tax Year: 2026 (Financial Year 1 July 2025 – 30 June 2026).
• Salaried Slabs: 0% (≤600k), 1% (600k–1.2m), 11% (1.2m–2.2m), 23% (2.2m–3.2m), 30% (3.2m–4.1m), 35% (>4.1m). (ICMA International)
• Surcharge: 9% of calculated tax for taxable income > PKR 10m. (Mercans Global Payroll & PEO)
• Administrative Notes: Employers withhold monthly; current circulars and rate explanations are posted by the FBR. (Federal Board of Revenue)
• Pension-Specific Relief: Finance Act 2025 introduced a distinct treatment/thresholds for pension from former employer; check your calculator’s pension settings or professional guidance. (ICMA International, KPMG Assets)

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How to Calculate Salary Tax in Pakistan (Manually)

1. Start with taxable annual salary (gross salary minus allowed deductions/exemptions).
2. Find your slab in the 2025–26 table.
3. Apply the formula for that slab (base amount + percentage on the excess over the lower bound).
4. If taxable income > PKR 10m, add 9% surcharge to the tax computed in step 3. (Mercans Global Payroll & PEO)
5. Divide by 12 for a monthly estimate.
6. Compare with payroll and keep proofs for reconciliation at year-end.

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Pro Tips for Pakistani Salary Earners

• Forecast before negotiating: Enter the target salary to see the post-tax impact.
• Time your bonuses: Large year-end bonuses can tip you into surcharge territory. Model them first.
• Track changes: If your salary changes midyear, re-run the calculator so HR can smooth withholding for the remaining months.
• Keep receipts: Deductions are your friend, but only with evidence.

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Conclusion: Check Your 2025–26 Take-Home in Seconds

The Pakistan Salary Tax Calculator for 2025–26 reflects the latest slabs and surcharge so you can plan confidently, avoid payroll surprises, and understand your effective tax rate. Whether you’re evaluating a job offer or planning a bonus, run the numbers now and share the results with HR or your advisor.

Stay compliant, stay informed, and take control of your payslip this year.

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Sources & Further Reading

1. ICMA Pakistan — Tax Rate Card (Tax Year 2025–26): salaried slabs and reference thresholds. (ICMA International)
2. KPMG Pakistan (Finance Act 2025 insights): salaried relief and surcharge update. (KPMG Assets)
3. Mercans Statutory Alert (Jul 2, 2025): 9% surcharge for salaried income over PKR 10m. (Mercans Global Payroll & PEO)
4. FBR Circulars Index: annual explanations and payroll withholding pointers for employers. (Federal Board of Revenue)

Frequently Asked Questions (FAQ)

1) What tax year should I select for the current period?

Choose 2025–26 (Tax Year 2026) for salaries earned from 1 July 2025 to 30 June 2026.

2) Are the salaried slabs different from last year?

Yes. The Finance Act 2025 reduced certain salaried slab rates (especially up to PKR 3.2 million) and cut the surcharge for very high incomes from 10% to 9% of the tax payable. (Federal Board of Revenue, Mercans Global Payroll & PEO)

3) When does the 9% surcharge apply?

If your taxable income exceeds PKR 10,000,000 in the tax year, a 9% surcharge is added on the tax amount. The calculator automatically adds this when your income exceeds the threshold. (Mercans Global Payroll & PEO)

4) Does the calculator consider donations or zakat?

Yes—if you enter eligible deductions, the calculator reduces your taxable income accordingly. Keep documentary evidence to claim them at assessment time.

5) I receive pension from a former employer. Are my taxes the same?

Pension income may have specific treatment/thresholds introduced in Finance Act 2025. Use the pension option in the calculator or consult your advisor to apply the correct rule for Tax Year 2026. (ICMA International)

6) Why is my monthly payroll tax slightly different from the calculator?

Employers estimate your full-year taxable salary and spread the tax across 12 months. Changes during the year (bonus, increment, unpaid leave) can shift monthly withholding. The annual total should reconcile unless income components changed.

7) Does the calculator include Social Security or provincial levies?

Pakistan’s salaried income tax is federal via the FBR; the calculator focuses on income tax and applicable surcharge. Certain employer-administered benefits or contributions are outside the scope unless they affect taxable income.

8) What documents should I save for tax season?

Keep your salary slips, withholding statements, donation receipts, zakat proofs, and any pension or allowance paperwork. They support your annual return and any refunds/adjustments.

9) Will capital gains or bank withdrawals change my salaried tax?

Capital gains and certain other incomes may have special rates and separate treatments. Your salary tax is computed using slabs, but other income types can add to your overall tax liability. For example, separate rates or withholding may apply; check FBR guidance and your broker/bank statements. (For general rate references see FBR and professional advisories.) Federal Board of Revenuepwc.com.pk

10) Can I use this calculator for non-salaried income?

Non-salaried/AOP income uses different slab structures (higher rates at certain bands). Use a non-salaried calculator or consult the ICMA tax card for the 2025–26 non-salaried schedule. ICMA International