Income Tax Slabs Pakistan 2025-26 for Salaried Persons – Complete FBR Guide
Income Tax Slabs Pakistan 2025-26 for Salaried Persons – Complete FBR Guide
If you are a salaried employee in Pakistan, understanding the income tax slabs for 2025-26 is one of the most important things you can do for your financial health. The Federal Board of Revenue (FBR), under the Finance Act 2025, has introduced notable changes to the salary tax rates — and the good news is that most salaried individuals, especially those in the low and middle-income brackets, are getting meaningful relief this year.
Whether you earn Rs. 50,000 or Rs. 500,000 per month, this complete guide will break down exactly how much income tax you owe, how to calculate it step by step, and how to legally reduce your tax liability. Let's get into it.
What Are Income Tax Slabs? (Simple Definition)
Income tax slabs are income brackets set by the government, each carrying a specific tax rate. Pakistan follows a progressive tax system, meaning the more you earn, the higher the rate applied — but only on the portion of income that falls within each bracket, not on your entire salary.
For salaried persons, the Federal Board of Revenue (FBR) defines a salaried individual as someone whose income from salary constitutes more than 75% of their total taxable income. This classification matters because salaried individuals enjoy lower, preferential tax rates compared to non-salaried or business income earners under the Income Tax Ordinance 2001.
FBR Income Tax Slabs 2025-26 for Salaried Person – Official Rates
The following salary tax slab rates are effective from July 1, 2025 to June 30, 2026, as notified under the Finance Act 2025-26:
Slab 1 — Annual Income: Up to Rs. 600,000 Tax Rate: 0% Tax Payable: Zero — Fully Exempt
Slab 2 — Annual Income: Rs. 600,001 to Rs. 1,200,000 Tax Rate: 1% Tax Payable: 1% of the amount exceeding Rs. 600,000
Slab 3 — Annual Income: Rs. 1,200,001 to Rs. 2,200,000 Fixed Tax: Rs. 6,000 Plus: 11% of the amount exceeding Rs. 1,200,000
Slab 4 — Annual Income: Rs. 2,200,001 to Rs. 3,200,000 Fixed Tax: Rs. 116,000 Plus: 23% of the amount exceeding Rs. 2,200,000
Slab 5 — Annual Income: Rs. 3,200,001 to Rs. 4,100,000 Fixed Tax: Rs. 346,000 Plus: 30% of the amount exceeding Rs. 3,200,000
Slab 6 — Annual Income: Above Rs. 4,100,000 Fixed Tax: Rs. 616,000 Plus: 35% of the amount exceeding Rs. 4,100,000
Important Note: A 9% surcharge applies on total income exceeding Rs. 10 million. Teachers and researchers at recognized educational institutions are entitled to a 25% reduction on their calculated tax liability.
How to Calculate Income Tax on Salary in Pakistan 2025 – Step by Step
Calculating your tax is simpler than it looks. The rate applies only on the portion of income that falls within a specific bracket — not on your full salary. Follow these steps:
Step 1 — Calculate your annual gross salary (include basic pay, all allowances, and bonuses)
Step 2 — Subtract allowable exemptions (Zakat, medical allowance, pension contributions, etc.)
Step 3 — Identify your net taxable income and find your applicable FBR slab
Step 4 — Apply the fixed tax plus the percentage on the excess amount above the slab threshold
Step 5 — Divide the annual tax by 12 to get your monthly withholding deduction
Real Salary Tax Calculation Examples – 2025-26
Here is what salaried individuals at different income levels will actually pay this year:
Monthly Salary: Rs. 50,000 | Annual Income: Rs. 600,000 Tax: Rs. 0 Monthly Deduction: Rs. 0 — Fully tax free
Monthly Salary: Rs. 100,000 | Annual Income: Rs. 1,200,000 Calculation: 1% × (1,200,000 − 600,000) = 1% × 600,000 Annual Tax: Rs. 6,000 Monthly Deduction: Rs. 500
Monthly Salary: Rs. 150,000 | Annual Income: Rs. 1,800,000 Calculation: Rs. 6,000 + 11% × (1,800,000 − 1,200,000) = Rs. 6,000 + Rs. 66,000 Annual Tax: Rs. 72,000 Monthly Deduction: Rs. 6,000
Monthly Salary: Rs. 200,000 | Annual Income: Rs. 2,400,000 Calculation: Rs. 116,000 + 23% × (2,400,000 − 2,200,000) = Rs. 116,000 + Rs. 46,000 Annual Tax: Rs. 162,000 Monthly Deduction: Rs. 13,500
Monthly Salary: Rs. 300,000 | Annual Income: Rs. 3,600,000 Calculation: Rs. 346,000 + 30% × (3,600,000 − 3,200,000) = Rs. 346,000 + Rs. 120,000 Annual Tax: Rs. 466,000 Monthly Deduction: Rs. 38,833
Monthly Salary: Rs. 500,000 | Annual Income: Rs. 6,000,000 Calculation: Rs. 616,000 + 35% × (6,000,000 − 4,100,000) = Rs. 616,000 + Rs. 665,000 Annual Tax: Rs. 1,281,000 Monthly Deduction: Rs. 106,750
Want to calculate your exact tax instantly? Use the free Pakistan Income Tax Calculator
Income Tax Slabs Comparison: 2024-25 vs 2025-26 Pakistan
One of the most searched questions right now is: what actually changed in the income tax slabs from 2024-25 to 2025-26? Here is a clear side-by-side breakdown:
Slab: Up to Rs. 600,000 Rate in 2024-25: 0% Rate in 2025-26: 0% Change: No change
Slab: Rs. 600,001 to Rs. 1,200,000 Rate in 2024-25: 2.5% Rate in 2025-26: 1% Change: Significant relief — rate dropped by more than half
Slab: Rs. 1,200,001 to Rs. 2,200,000 Rate in 2024-25: 15% plus Rs. 30,000 fixed tax Rate in 2025-26: 11% plus Rs. 6,000 fixed tax Change: Major relief — fixed tax reduced by Rs. 24,000, marginal rate down by 4%
Slab: Rs. 2,200,001 to Rs. 3,200,000 Rate in 2024-25: 25% plus Rs. 180,000 fixed tax Rate in 2025-26: 23% plus Rs. 116,000 fixed tax Change: Moderate relief
Slab: Rs. 3,200,001 to Rs. 4,100,000 Rate in 2024-25: 30% plus Rs. 430,000 fixed tax Rate in 2025-26: 30% plus Rs. 346,000 fixed tax Change: Marginal relief on fixed component
Slab: Above Rs. 4,100,000 Rate in 2024-25: 35% Rate in 2025-26: 35% Change: No change
The Finance Act 2025-26 delivered the most significant reduction in the second slab — dropping from 2.5% to just 1% — following strong advocacy for the salaried class by the government and recommendations from the National Assembly Standing Committee on Finance.
Who Qualifies as a Salaried Person Under FBR Pakistan?
According to the Income Tax Ordinance 2001, you are treated as a salaried individual if:
— Your income from salary exceeds 75% of your total taxable income
— You receive a regular payslip, pay cheque, or remuneration from an employer
— You are a government servant, public sector employee, private sector employee, or contractual employee on payroll
— You are a teacher or researcher at a recognized educational institution (and you also qualify for an additional 25% tax reduction on your liability)
If your income comes from a combination of salary and business activity, your dominant income source determines your tax category. For hybrid income situations, it is best to consult a certified tax advisor.
Deductions That Can Reduce Your Taxable Income in 2025
Many salaried individuals overpay their tax simply because they are unaware of the legal deductions and exemptions available under Pakistani tax law. Here is what FBR allows:
Allowances and Exemptions:
Medical Allowance — Exempt up to 10% of basic salary, provided it is not separately reimbursed by the employer
House Rent Allowance (HRA) — Exempt up to 45% of basic salary
Conveyance Allowance — Up to Rs. 50,000 per year is exempt
Leave Encashment — Exempt within certain prescribed limits
Deductible Payments:
Zakat — Compulsory Zakat deducted under the Zakat and Ushr Ordinance is fully deductible from your taxable salary income
Charitable Donations — Donations to FBR-approved charitable organizations are deductible, subject to specified limits
Pension Fund Contributions — Contributions to approved pension funds are eligible for tax credits
Life Insurance Premiums — Eligible for tax credits under Section 62 of the Income Tax Ordinance 2001
Teacher Special Rebate — A 25% reduction on the calculated tax liability for educators at recognized institutions
Subtracting these from your gross salary gives you your net taxable income, on which the FBR slab rates are then applied. Smart tax planning can save you thousands of rupees every single year.
For business owners, use the Pakistan Business Tax Calculator
For freelancers, use the Pakistan Freelance Tax Calculator
Filer vs Non-Filer: Why Filing Your Tax Return Matters
Registering on FBR's Active Taxpayer List (ATL) as a filer is one of the smartest financial decisions a salaried person in Pakistan can make. Filers enjoy significantly lower withholding tax rates across dozens of everyday transactions compared to non-filers.
Property Purchase Tax Filers: 3% Non-Filers: 4%
Bank Cash Withdrawal Above Rs. 50,000 Filers: 0.6% Non-Filers: 1.2%
Dividend Income Filers: 15% Non-Filers: 30%
Vehicle Registration Filers: Reduced rates Non-Filers: Higher rates
Prize Bond Winnings Filers: Lower withholding tax Non-Filers: Double withholding tax
Getting on the ATL is straightforward. File your annual income tax return on the FBR Iris portal before September 30, 2026, and you will automatically appear on the next ATL update. Make sure your National Tax Number (NTN) is registered first.
Withholding Tax on Salary – How Your Employer Deducts It
As a salaried employee, you do not have to manually pay income tax every month. Your employer calculates your estimated annual tax liability based on FBR's current salary tax slab rates, divides it equally across 12 months, and deducts it from your paycheck each month. This is called withholding tax on salary or tax deduction at source.
Under the Income Tax Ordinance 2001, your employer is legally required to:
— Deduct the applicable monthly tax from your salary before payment
— Deposit the withheld tax to FBR on a monthly basis
— Provide you with an annual tax deduction certificate (Form 16) at year end
— Submit a salary statement to FBR at the end of the tax year
Even if your employer is correctly withholding tax, you are still required to file your own annual income tax return. Filing allows you to claim refunds if excess tax was deducted, maintain your filer status, and stay compliant with FBR regulations.
Income Tax Slabs Apply Uniformly Across All of Pakistan
Whether you are a salaried professional in Karachi, Lahore, Islamabad, Rawalpindi, Peshawar, Quetta, Faisalabad, Multan, Sialkot, Gujranwala, or Hyderabad — the FBR income tax slabs 2025-26 are federal regulations and apply uniformly across all provinces and cities of Pakistan. There is no city-specific or province-specific variation in income tax rates for salaried individuals.
The only location-based tax variation you may notice is Provincial Professional Tax, which is collected separately by provincial revenue authorities and is generally a small amount deducted by your employer on your behalf.
How to File Income Tax Return Online in Pakistan – Salaried Person Guide
FBR's Iris online portal has made income tax return filing much easier and faster. Here is a simple step-by-step guide:
Step 1 — Visit iris.fbr.gov.pk, register, and obtain your National Tax Number (NTN)
Step 2 — Log in and go to Declaration, then select Income Tax Return
Step 3 — Select the relevant tax year: July 2025 to June 2026
Step 4 — Enter your gross salary as shown on your salary certificate or Form 16 from your employer
Step 5 — Enter all applicable exemptions and deductions such as Zakat, pension contributions, and medical allowance
Step 6 — The Iris system will automatically calculate your tax liability based on current FBR slab rates
Step 7 — Pay any remaining tax balance using a Computerized Payment Receipt (CPR)
Step 8 — Submit your return and download the official acknowledgment for your records
Last date to file your income tax return for the tax year 2025-26 is September 30, 2026. Filing after the deadline attracts penalties and late filing surcharges under FBR regulations.
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Frequently Asked Questions – Income Tax Slabs Pakistan 2025-26
Q1. What are the new income tax slabs for salaried persons in Pakistan 2025-26?
The FBR income tax slabs for salaried persons in 2025-26 are: 0% on annual income up to Rs. 600,000; 1% on Rs. 600,001 to Rs. 1,200,000; 11% plus Rs. 6,000 fixed on Rs. 1,200,001 to Rs. 2,200,000; 23% plus Rs. 116,000 fixed on Rs. 2,200,001 to Rs. 3,200,000; 30% plus Rs. 346,000 fixed on Rs. 3,200,001 to Rs. 4,100,000; and 35% plus Rs. 616,000 fixed on income above Rs. 4,100,000.
Q2. What is the tax-free salary limit in Pakistan 2025?
The tax-free income limit for salaried persons in Pakistan for 2025-26 is Rs. 600,000 per year, which equals Rs. 50,000 per month. Any annual income below this threshold is completely exempt from income tax.
Q3. How much tax do I pay on Rs. 100,000 monthly salary in Pakistan 2025?
On a monthly salary of Rs. 100,000, your annual income is Rs. 1,200,000. The total annual tax for 2025-26 is Rs. 6,000, which works out to just Rs. 500 per month. This is a major improvement over 2024-25, where the same salary attracted Rs. 15,000 annually — a saving of Rs. 9,000 per year.
Q4. What is the difference between a filer and non-filer in Pakistan?
A filer is a person registered on FBR's Active Taxpayer List (ATL) who files their annual income tax return. Filers benefit from significantly lower withholding tax rates on property transactions, vehicle registration, banking, dividends, and investments. Non-filers pay double or higher rates on most of these transactions. Filing your return is not just a legal obligation — it is a major financial advantage.
Q5. Is medical allowance taxable for salaried persons in Pakistan 2025?
No. Medical allowance up to 10% of your basic salary is exempt from income tax, provided it is not separately reimbursed by your employer. If your employer directly reimburses your medical expenses instead, the allowance itself may be treated as taxable.
Q6. Can I calculate my income tax online in Pakistan?
Yes. Use the free Pakistan Income Tax Calculator to instantly calculate your annual and monthly tax based on FBR's 2025-26 slab rates:
Q7. What is the highest income tax rate for salaried persons in Pakistan 2025?
The maximum income tax rate for salaried persons in Pakistan for 2025-26 is 35%, applicable on annual income above Rs. 4,100,000. An additional 9% surcharge is levied on total income exceeding Rs. 10 million.
Q8. Is Zakat deductible from income tax in Pakistan?
Yes. Compulsory Zakat deducted under the Zakat and Ushr Ordinance 1980 is fully deductible from your taxable salary income. This reduces your net taxable income before FBR slab rates are applied.
Q9. Are teachers exempt from income tax in Pakistan?
Teachers and researchers employed at recognized educational institutions in Pakistan are entitled to a 25% reduction on their calculated income tax liability. This is not a full exemption but it results in meaningful and significant annual savings for educators across the country.
Q10. What changed in income tax slabs from 2024-25 to 2025-26?
The Finance Act 2025-26 reduced tax rates across lower and middle income slabs. The most significant change was in the Rs. 600,001 to Rs. 1,200,000 bracket, where the rate dropped from 2.5% to 1%. In the Rs. 1,200,001 to Rs. 2,200,000 bracket, the fixed tax was cut from Rs. 30,000 to Rs. 6,000 and the marginal rate dropped from 15% to 11%. Higher income slabs remain largely unchanged.
Q11. How does progressive tax work in Pakistan?
Progressive tax means you pay a higher rate only on the portion of income that falls in a higher bracket — not on your entire salary. For example, if you earn Rs. 1,500,000 annually, you pay 0% on the first Rs. 600,000, 1% on the next Rs. 600,000, and 11% only on the remaining Rs. 300,000. Your full salary is never taxed at the highest applicable rate.
Q12. What is the surcharge on high income in Pakistan 2025?
A 9% surcharge is applied on the total income tax liability of individuals whose annual income exceeds Rs. 10 million. This surcharge is in addition to the standard slab-based tax and is calculated on the total tax payable, not on the income itself.
Conclusion – Know Your Tax, Plan Smart, File on Time
The income tax slabs for salaried persons in Pakistan 2025-26 represent a genuine step toward financial relief, particularly for low and middle-income earners. With rates dropping across key brackets and the progressive tax structure remaining in place, most salaried individuals will keep more money in their pockets this fiscal year than the last.
However, knowing the slabs is only half the picture. Claiming your legal deductions, maintaining your filer status on the FBR Active Taxpayer List, and filing your annual income tax return before the September 30, 2026 deadline are equally important steps. Tax compliance is not just about avoiding penalties — it unlocks financial benefits, builds personal credibility, and supports Pakistan's economic development.
If you want to go beyond calculating your own tax and build a genuine career in taxation and financial advisory, visit the Institute of Corporate and Taxation (ICT) and explore their professional certification programs
