Refund due or balance payable for the year.
Refund due
—
Actual liability
—
Tax withheld
—
Why salaried people in Pakistan so often overpay
Most salaried employees never sit down and reconcile their tax. Your employer deducts withholding tax every month under the salary withholding rules, banks shave off advance tax on profit, the telco takes its cut on your mobile bill, and your car token quietly carries an advance income tax line. By the end of the year a lot of that money is sitting against your name with the FBR, and a good slice of it may be more than you actually owed. The only way to get it back is to file a return, declare every rupee of tax already collected, and let the system net it against your real liability. This tool does that netting for you so you know, before you open Iris, whether you are walking towards a refund or a bill.
The structure is simple and stable, even though the slab figures shift each June. Your annual taxable income lands in a set of progressive bands. The first PKR 600,000 is taxed at zero. Each rupee above that is taxed at the rate of the band it falls into, rising as income climbs. Add up the tax across the bands and you have your real liability. Subtract everything already withheld during the year, and the sign of the answer tells you the rest. A positive number is a refund you can claim. A negative number is a balance you still owe.
A salaried earner on PKR 3 million who had PKR 400,000 deducted
Picture someone whose employer over-deducted through the year, perhaps because a bonus was taxed at a high projected rate that the full year never justified. They enter PKR 3,000,000 of taxable income and PKR 400,000 of tax withheld. Using the salaried slab rates this calculator applies for FY 2025-26, the real liability builds up band by band as shown below. Treat the slab figures as the ones the tool models, not as certified law, and confirm the current numbers with the FBR, since the Finance Act resets them annually.
| Income band (PKR) | Rate this tool applies | Tax on the band (PKR) |
|---|
The liability of PKR 300,000 is an effective rate of exactly 10 percent on PKR 3 million, even though the top rupee was taxed at the 23 percent marginal rate the tool applies. Against PKR 400,000 withheld, the result is a refund of PKR 100,000, which the tool shows as Rs 100,000. The chart below puts the two amounts side by side so the gap you can reclaim is obvious at a glance.
The live chart in the calculator above compares tax withheld against the actual liability for any income you enter.
What this estimate leaves out
The number is only as honest as the income figure you feed it. The calculator works on taxable income, not gross salary, so deduct any allowable adjustments before you type. It also treats your liability as pure salaried slab tax. If a chunk of your income is rental, dividend, or profit on debt, those carry their own rates and final-tax treatment, and lumping them in here will skew the result. A practical tip: pull your withholding figures straight from the FBR tax deduction certificate your employer issues and the deduction lines on your bank and telecom statements, rather than guessing, because that is exactly the evidence the return wants.
Filing is what unlocks the money
One common mistake is assuming a refund lands automatically. It does not. You have to file the return, the refund has to be assessed, and only then can you apply for the actual payout. The other trap is the filer versus non-filer divide. Non-filers face higher withholding rates across the board, so a non-filer who never files is both overpaying and unable to reclaim a rupee of it. Filing is what turns money already collected from you into money you can get back, which is reason enough to be on the active taxpayer list even in a year you owe nothing.
How long does an income tax refund take in Pakistan?
There is no fixed turnaround. Once your return is filed and the refund is determined, you raise a refund application in Iris, and the FBR processes it after verification. Smaller, well-documented salaried refunds tend to clear faster than large or mixed-income claims. Keep your deduction certificates handy, since missing evidence is the usual reason a refund stalls.
Can I carry a refund forward instead of claiming cash?
Yes. Many filers choose to adjust an excess against the next year's liability rather than wait for a cash payout, which can be the smoother option if you expect to owe tax again soon. The choice is yours at filing time. This calculator simply shows the size of the excess; how you use it is a separate decision you make in your return.
Does a year-end bonus change my refund position?
It can, and often in your favour. Employers sometimes withhold on a bonus as though it repeats every month, projecting a higher annual income than you actually earn. When the year closes at a lower real figure, the over-deduction surfaces as a refund. Enter your true full-year taxable income here to see the corrected picture.