Key takeaways
- Multiply monthly taxable salary by 12, find the slab, add its fixed amount to the rate on the excess, then divide by 12.
- Rs 125,000 a month pays Rs 3,250 a month in FY 2026-27, and Rs 250,000 a month pays Rs 23,000.
- Tax on income up to Rs 2,200,000 a year is unchanged; the 23% and 30% bands were cut to 20% and 25%.
- A bonus is added to annual salary and taxed at the slab it reaches, so the deduction is higher in that month.
Salary tax in Pakistan is worked out on your yearly taxable salary, then spread over 12 months. For FY 2026-27, you take your monthly taxable salary, multiply by 12, find the slab that annual figure falls in, add the slab's fixed amount to its rate on the part above the slab's start, and divide by 12. The rest of this guide walks through each step with two salaries, Rs 125,000 and Rs 250,000 a month, and shows who gained from this year's changes.
If you only want the answer for your salary, the salary tax calculator for Pakistan does all five steps at once. For a ready table of take-home pay from Rs 50,000 to Rs 500,000 a month, see our FY 2026-27 take-home guide.
Step 1: Start from taxable salary, not gross
The slabs apply to taxable salary. Most of a payslip counts: basic salary, house rent and utility allowances, overtime, bonuses, commissions and most perquisites. The common exclusion is medical: reimbursed medical bills are exempt, and where the employer has no reimbursement facility, a medical allowance of up to 10% of basic salary is exempt. Subtract any exempt amounts from your monthly gross before going further. Our guide to gross vs taxable salary explains each line of a payslip.
Step 2: Turn it into an annual figure
Multiply the monthly taxable salary by 12. The slabs are annual, so a monthly figure on its own tells you nothing about the rate.
- Rs 125,000 a month is Rs 1,500,000 a year.
- Rs 250,000 a month is Rs 3,000,000 a year.
Step 3: Find your slab
These are the FY 2026-27 salaried slabs (tax year 2027, from 1 July 2026 to 30 June 2027):
| Annual taxable salary | Tax |
|---|---|
| Up to Rs 600,000 | 0 |
| Rs 600,001 to 1,200,000 | 1% of the amount over Rs 600,000 |
| Rs 1,200,001 to 2,200,000 | Rs 6,000 + 11% of the amount over Rs 1,200,000 |
| Rs 2,200,001 to 3,200,000 | Rs 116,000 + 20% of the amount over Rs 2,200,000 |
| Rs 3,200,001 to 4,100,000 | Rs 316,000 + 25% of the amount over Rs 3,200,000 |
| Rs 4,100,001 to 5,600,000 | Rs 541,000 + 29% of the amount over Rs 4,100,000 |
| Rs 5,600,001 to 7,000,000 | Rs 976,000 + 32% of the amount over Rs 5,600,000 |
| Above Rs 7,000,000 | Rs 1,424,000 + 35% of the amount over Rs 7,000,000 |
Rs 1,500,000 falls in the 11% slab. Rs 3,000,000 falls in the 20% slab.
Step 4: Fixed amount plus the rate on the excess
The fixed amount is the tax already due on everything below your slab. You add the slab rate on only the part above the slab's starting point.
Rs 125,000 a month (Rs 1,500,000 a year)
- Amount over Rs 1,200,000: Rs 300,000
- 11% of Rs 300,000: Rs 33,000
- Plus the fixed Rs 6,000: Rs 39,000 a year
Rs 250,000 a month (Rs 3,000,000 a year)
- Amount over Rs 2,200,000: Rs 800,000
- 20% of Rs 800,000: Rs 160,000
- Plus the fixed Rs 116,000: Rs 276,000 a year
Step 5: Divide by 12
- Rs 39,000 ÷ 12 = Rs 3,250 a month, leaving Rs 121,750 take-home. That is 2.6% of the salary.
- Rs 276,000 ÷ 12 = Rs 23,000 a month, leaving Rs 227,000 take-home. That is 9.2% of the salary.
The effective rate is much lower than the slab rate because the first Rs 600,000 is tax-free and the next slices are taxed at 1% and 11%. Being "in the 20% slab" means only the rupees above Rs 2,200,000 pay 20%.
Who gained from the FY 2026-27 changes
Two slabs were cut this year: the Rs 2.2 million to 3.2 million band went from 23% to 20%, and the Rs 3.2 million to 4.1 million band from 30% to 25%. The 9% surcharge on salaried income above Rs 10 million was also removed, and the top 35% rate now starts above Rs 7 million.
Everything up to Rs 2,200,000 a year (about Rs 183,333 a month) is taxed exactly as before. The relief starts above that:
| Monthly salary | Monthly tax FY 2025-26 | Monthly tax FY 2026-27 | Saving per month |
|---|---|---|---|
| Rs 125,000 | Rs 3,250 | Rs 3,250 | Rs 0 |
| Rs 250,000 | Rs 25,000 | Rs 23,000 | Rs 2,000 |
| Rs 400,000 | Rs 71,750 | Rs 62,000 | Rs 9,750 |
The calculator can show either year side by side, so you can check your own saving.
Bonuses and mid-year raises
A bonus is part of salary, so it is added to the annual total and taxed at the slab it lands in. Take the Rs 250,000 salary with a Rs 250,000 bonus: annual salary becomes Rs 3,250,000. Tax is Rs 316,000 plus 25% of the Rs 50,000 above Rs 3,200,000, which is Rs 328,500. That is Rs 52,500 more than without the bonus, about 21% of it, because the bonus first fills the rest of the 20% slab and then spills into the 25% one.
Employers deduct tax from salary under section 149 of the Income Tax Ordinance, 2001, based on their estimate of your salary for the year. When pay changes during the year, they usually re-estimate and adjust the remaining months, which is why the deduction can jump after a raise or a bonus month. Your annual return is where the year is settled.
A quick check against your payslip
- Take one month's taxable salary from the payslip.
- Multiply by 12 and work out the yearly tax with the steps above, or enter it in the calculator.
- Divide by 12 and compare with the income tax line.
If the payslip figure is higher, the usual reasons are an exempt allowance that was not excluded, a bonus or arrears paid that month, or a correction for earlier months. Ask payroll how they estimated your annual salary. These figures are for FY 2026-27 salaried income only and are a guide, not tax advice; check your own case with your employer or a tax adviser before you file.
Frequently asked questions
Take your monthly taxable salary, multiply it by 12, and find the FY 2026-27 slab that annual figure falls in. Add the slab's fixed amount to the slab rate applied to the part above the slab's start, then divide by 12 for the monthly deduction. Exempt items such as an eligible medical allowance are removed first.
Rs 3,250 a month in FY 2026-27. The annual salary of Rs 1,500,000 is in the 11% slab: Rs 6,000 fixed plus 11% of the Rs 300,000 above Rs 1,200,000, which is Rs 39,000 a year. That leaves Rs 121,750 a month take-home, the same as last year.
Rs 23,000 a month in FY 2026-27. The annual salary of Rs 3,000,000 is in the 20% slab: Rs 116,000 fixed plus 20% of the Rs 800,000 above Rs 2,200,000, which is Rs 276,000 a year. Under last year's 23% band the same salary paid Rs 25,000 a month.
Only people with taxable salary above Rs 2,200,000 a year, about Rs 183,333 a month. The 2.2 million to 3.2 million band fell from 23% to 20%, the 3.2 million to 4.1 million band from 30% to 25%, the 35% rate now starts above Rs 7 million, and the 9% surcharge above Rs 10 million was removed.
A bonus is part of salary, so it is added to your annual salary and taxed at the slab the new total reaches. On a Rs 250,000 monthly salary, a Rs 250,000 bonus raises annual tax from Rs 276,000 to Rs 328,500, an extra Rs 52,500, because part of the bonus falls into the 25% slab.