Income Tax Brackets for Salaried Individuals - FY 2025-26

In Pakistan, income tax for salaried individuals is calculated based on their annual earnings, after applicable deductions and exemptions. The tax system is progressive — as income increases, the applicable tax rate also rises.

The federal budget for 2025-26 introduced updated tax brackets, effective from July 1, 2025. Under the new policy, individuals with yearly income above Rs. 600,000 will fall under taxable brackets, each with a corresponding rate and threshold.

• Income up to Rs. 600,000 per year remains exempt from tax.
• Income between Rs. 600,001 and Rs. 1,200,000 is taxed at 2.5% on the amount exceeding Rs. 600,000.
• For income from Rs. 1,200,001 to Rs. 2,200,000, the tax is Rs. 6,000 plus 11% on the amount above Rs. 1,200,000.
• For income between Rs. 2,200,001 and Rs. 3,200,000, tax equals Rs. 116,000 plus 23% on the surplus over Rs. 2,200,000.
• Income from Rs. 3,200,001 to Rs. 4,100,000 is taxed at Rs. 346,000 plus 30% on the amount beyond Rs. 3,200,000.
• Any income above Rs. 4,100,000 is charged Rs. 616,000 plus 35% on the portion exceeding Rs. 4,100,000.

Use calculator to determine your estimated tax liability and your monthly take-home salary under the FY 2025-26 tax structure.