Annual salaried income tax for FY 2025-26, surcharge included.
Income tax due
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Effective rate
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Net after tax
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Worked example
Take a salaried person with PKR 3,000,000 of annual taxable income for FY 2025-26. The first 600,000 is
tax free. The next band, 600,001 to 1,200,000, is taxed at 1%, which is 6,000. The 1,200,001 to 2,200,000
band is taxed at 11%, which is 110,000. The remaining 800,000 sits in the 2,200,001 to 3,200,000 band at
23%, which is 184,000. Adding those three pieces gives 300,000 of income tax. Because the income is below
the 10,000,000 surcharge threshold, the 9% high-income surcharge is zero here. The effective rate is
300,000 divided by 3,000,000, which is 10.0%, and the net after tax is 2,700,000. Note that the surcharge
only bites above 10 million: a person on 12,000,000 would pay 9% on top of their slab tax, so this single
feature can add hundreds of thousands of rupees for top earners.
Band (PKR)
Rate
Tax
0 to 600,000
0%
Rs 0
600,001 to 1,200,000
1%
Rs 6,000
1,200,001 to 2,200,000
11%
Rs 110,000
2,200,001 to 3,000,000
23%
Rs 184,000
Total tax
10.0% eff.
Rs 300,000
How it is calculated
Salaried income tax in Pakistan is progressive and marginal, so each slice of income is taxed only at the
rate for its own band rather than one flat rate on the whole amount. The tool starts from your annual
taxable salary, exempts the first 600,000, then walks the FY 2025-26 bands of 1%, 11%, 23%, 30% and 35%,
taxing only the portion that falls inside each band. The cumulative figures you may have seen on a tax
card, such as 6,000 plus 11% on the next band, are just this same calculation expressed as running
totals. If taxable income exceeds 10,000,000, a 9% surcharge is applied to the income tax already
computed and added on top, which this calculator includes automatically. The effective rate is total tax
divided by income, and it is always lower than your top marginal band because the lower bands are taxed
more lightly.
Frequently asked questions
How is salaried income tax worked out in Pakistan for FY 2025-26?
The first 600,000 rupees of annual taxable income is tax free. Income above that is taxed in progressive slabs, starting at 1% on the 600,000 to 1,200,000 band. If your taxable income exceeds 10 million rupees, a 9% surcharge is added on top of the income tax payable. This calculator applies the slabs and the surcharge together.
What is the 9% surcharge and who pays it in Pakistan?
The high-income surcharge is an additional 9% levied on the income tax already computed for salaried individuals whose annual taxable income exceeds PKR 10,000,000. It is charged on the slab tax figure, not directly on income. For example, if your slab tax is PKR 2,000,000 and your income crosses the threshold, the surcharge adds PKR 180,000 on top, bringing total tax to PKR 2,180,000. This calculator applies the surcharge automatically when income exceeds the threshold.
What counts as taxable salary for income tax purposes in Pakistan?
Taxable salary includes basic pay, allowances, bonuses, and most other cash benefits from employment. Certain allowances are partially or fully exempt, such as medical allowances up to specified limits and conveyance allowances within limits set by the FBR. Employer contributions to an approved provident fund are generally not taxable when made, though withdrawals have their own treatment. The exact composition of your taxable salary depends on how your employer structures the package and what exemptions your contract qualifies for.
How does Pakistan salaried income tax compare with the business and AOP rate card?
The salaried card is more generous at lower income levels. Under the FY 2025-26 slabs, the 600,000 to 1,200,000 band attracts only 1% for salaried taxpayers, whereas the same band on the business and AOP card is taxed at a much higher rate. The qualification rule is that salary must exceed 75% of total taxable income for the salaried card to apply. Mixed earners with significant business income can find the business card raises their bill substantially compared to a purely salaried peer at the same total income.