Tax guides
Pakistan income tax and salary rates, explained simply
Learn how Pakistan’s income-tax system works, how tax years and residency affect you, and how progressive salary rates are applied.
Key takeaways
Key takeaways
- A higher rate applies only to income inside that band, not to your whole salary.
- Pakistan’s usual tax year runs from 1 July to 30 June and is named for the year in which it ends.
- FBR groups taxable income under five heads when calculating income tax.
- You may still need to file even when tax was already deducted or no additional tax is payable.
How Pakistan’s tax system works
Federal and provincial authorities administer different taxes. The authority, payment type and governing law determine where a tax belongs.
Federal income tax — handled by FBR
FBR administers federal income tax for people and businesses. The main rules sit in the Income Tax Ordinance, 2001 and are amended through Finance Acts.
Provincial taxes — services, property and farming
Provincial authorities administer taxes under provincial law, including sales tax on services and certain taxes connected with property and agricultural income.
Tax deducted before you are paid
Employers, banks and some customers deduct tax from payments. Depending on the provision, this may be adjustable against your final bill or treated differently under the law.
The tax year and your tax residency
Tax Year 2027
Starts
1 July 2026
Ends
30 June 2027
The ordinary tax year is the 12 months ending 30 June. Because this period ends in 2027, the law and IRIS refer to it as Tax Year 2027.
Tax residence is a legal status, not citizenship. It depends on the applicable day-count and other conditions in the Income Tax Ordinance for that tax year.
Resident for tax purposes
- Pakistan may tax income earned inside and outside the country, subject to the applicable rules.
- A foreign-tax credit or tax treaty may reduce double taxation when its conditions are met.
Non-resident for tax purposes
- Pakistan generally taxes income that has a Pakistan source.
- A tax treaty may change the treatment when its eligibility conditions are met.
Tax-rate alerts
Filing season reminders
We’ll remind you before the return deadline and email you when this guide is reviewed for a new tax year.
The five heads of income FBR uses
- 1
Salary
Pay from employment, including taxable benefits and allowances.
- 2
Income from property
Rent and other income falling under the property-income rules.
Rental income calculator - 3
Income from business
Profit from a business, profession or qualifying freelance activity.
Business tax calculator - 4
Capital gains
Taxable gains from disposing of assets, with separate rules for different assets.
Capital gains calculator - 5
Income from other sources
Taxable income not falling within the other four heads, such as certain investment income.
Salary tax rates — 2026–27
| Yearly salary subject to tax | How tax is calculated |
|---|---|
| Up to Rs. 600,000 | No tax |
| Rs. 600,001 – Rs. 1,200,000 | 1% of the amount over Rs. 600,000 |
| Rs. 1,200,001 – Rs. 2,200,000 | Rs. 6,000, plus 11% of the amount over Rs. 1,200,000 |
| Rs. 2,200,001 – Rs. 3,200,000 | Rs. 116,000, plus 20% of the amount over Rs. 2,200,000 |
| Rs. 3,200,001 – Rs. 4,100,000 | Rs. 316,000, plus 25% of the amount over Rs. 3,200,000 |
| Rs. 4,100,001 – Rs. 5,600,000 | Rs. 541,000, plus 29.0% of the amount over Rs. 4,100,000 |
| Rs. 5,600,001 – Rs. 7,000,000 | Rs. 976,000, plus 32% of the amount over Rs. 5,600,000 |
| Above Rs. 7,000,000 | Rs. 1,424,000, plus 35% of the amount over Rs. 7,000,000 |
Rates are maintained from the Finance Act 2026 and the amended First Schedule. Confirm the applicable law before relying on an estimate.
Calculate your salary taxExample: yearly salary of PKR 2,400,000
- 1
Tax on salary up to PKR 2,200,000
PKR 116,000
- 2
Tax on the remaining PKR 200,000 at 20%
PKR 40,000
- 3
Estimated tax for the year
Rs. 156,000
Simple illustration before credits, deductions, withholding adjustments or other applicable charges.
Could you need to file a tax return?
Check section 114 and current FBR guidance if any of these circumstances apply:
- Your taxable income is above the applicable filing threshold.
- You earn through a business, professional work or freelancing.
- You own property, land or a vehicle covered by the filing rules.
- You receive foreign income or hold assets outside Pakistan.
- You want to claim a refund or meet the requirements for inclusion on the Active Taxpayers List.
Whether you must file depends on your income, assets and circumstances. Tax already deducted does not by itself remove a filing obligation.
Due dates and records to keep
Due date
FBR ordinarily lists 30 September for individuals and AOPs. Dates may be extended by notification, so confirm the deadline for the relevant tax year before filing.
Records
FBR guidance says people with taxable income should keep tax-return records for six years. Keep them longer while a related proceeding or appeal remains pending.
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