The 2025-26 federal budget rewired Pakistan's salary tax slabs. Here is exactly what changed, and what it means for your monthly take-home pay.
Every summer, the Finance Bill quietly rewrites the numbers that decide how much of your salary you actually get to keep. The 2025-26 budget was no exception — the government revised the salaried income tax slabs, tweaked the surcharge on high earners, and left millions of employees trying to figure out whether their July payslip will be lighter or heavier than June's. This guide breaks the changes down in plain English, compares them side by side with the 2024-25 rates, and walks through take-home pay at every salary band so you can see the impact for yourself.
In short: if you earn between Rs 600,000 and Rs 3.2 million a year, you will pay less tax this year than you did last year. Above that, your bill barely moves.
| Annual Taxable Income (PKR) | Tax Rate | |---|---| | Up to 600,000 | 0% | | 600,001 – 1,200,000 | 5% of amount above 600,000 | | 1,200,001 – 2,200,000 | Rs 30,000 + 15% of amount above 1,200,000 | | 2,200,001 – 3,200,000 | Rs 180,000 + 25% of amount above 2,200,000 | | 3,200,001 – 4,100,000 | Rs 430,000 + 30% of amount above 3,200,000 | | Above 4,100,000 | Rs 700,000 + 35% of amount above 4,100,000 |
A 10% surcharge applied on tax liability where taxable income exceeded Rs 10 million.
| Annual Taxable Income (PKR) | Tax Rate | |---|---| | Up to 600,000 | 0% | | 600,001 – 1,200,000 | 1% of amount above 600,000 | | 1,200,001 – 2,200,000 | Rs 6,000 + 11% of amount above 1,200,000 | | 2,200,001 – 3,200,000 | Rs 116,000 + 23% of amount above 2,200,000 | | 3,200,001 – 4,100,000 | Rs 346,000 + 30% of amount above 3,200,000 | | Above 4,100,000 | Rs 616,000 + 35% of amount above 4,100,000 |
The 10% surcharge on income above Rs 10 million continues.
Numbers below assume the entire income is taxable salary and ignore Zakat, EOBI and provident-fund deductions. Monthly take-home = (annual salary − annual tax) ÷ 12.
| Monthly Salary | Annual Salary | Tax 2024-25 | Tax 2025-26 | Monthly Saving | |---|---|---|---|---| | Rs 60,000 | 720,000 | 6,000 | 1,200 | +Rs 400 | | Rs 80,000 | 960,000 | 18,000 | 3,600 | +Rs 1,200 | | Rs 100,000 | 1,200,000 | 30,000 | 6,000 | +Rs 2,000 | | Rs 150,000 | 1,800,000 | 120,000 | 72,000 | +Rs 4,000 | | Rs 200,000 | 2,400,000 | 230,000 | 162,000 | +Rs 5,667 | | Rs 275,000 | 3,300,000 | 455,000 | 369,000 | +Rs 7,167 | | Rs 400,000 | 4,800,000 | 945,000 | 861,000 | +Rs 7,000 |
The pattern is clear: the biggest percentage saving is at the bottom of the salaried spectrum, exactly where the government has been under the most political pressure. High earners see the same rupee saving they picked up in the middle slabs — the top-slab rates were left alone.
Annual salary = Rs 1,800,000.
Old (2024-25): Rs 30,000 + 15% × (1,800,000 − 1,200,000) = Rs 30,000 + Rs 90,000 = Rs 120,000/year (Rs 10,000/month tax).
New (2025-26): Rs 6,000 + 11% × (1,800,000 − 1,200,000) = Rs 6,000 + Rs 66,000 = Rs 72,000/year (Rs 6,000/month tax).
Monthly take-home change: +Rs 4,000. Over a year, that is Rs 48,000 — roughly one additional monthly salary before tax at this bracket.
Annual salary = Rs 4,800,000.
Old: Rs 700,000 + 35% × (4,800,000 − 4,100,000) = 700,000 + 245,000 = Rs 945,000/year.
New: Rs 616,000 + 35% × (4,800,000 − 4,100,000) = 616,000 + 245,000 = Rs 861,000/year.
Monthly take-home change: +Rs 7,000. Same 35% top-slab rate, but the fixed step-up amount is smaller because the lower slabs are cheaper to cross.
If your taxable income exceeds Rs 10 million in a tax year, a 10% surcharge is added on top of your calculated income tax. On Rs 12 million of taxable salary, the base tax works out to roughly Rs 3.38M, and the surcharge adds another Rs 338k. The surcharge was introduced in the 2024-25 budget and has been retained through 2025-26.
Does the Rs 600,000 exemption apply to everyone? Yes, for salaried individuals. Non-salaried and AOP slabs are different and were also revised.
Is the 1% slab a permanent change? It is set by the Finance Act 2025 for tax year 2025-26. Future budgets can change it again.
When does the new rate apply? For salary income earned from 1 July 2025 onwards (tax year 2026 in FBR terminology).
Does the surcharge apply to gross or taxable income? Taxable income after allowable deductions — not gross salary.
What if I switched jobs mid-year? Your combined annual income determines the slab; ask your new employer to consider your previous employer's tax certificate.
Every payslip is different — bonuses, allowances, provident-fund contributions and medical stipends all shift the taxable base. Rather than working the tables by hand, plug your figures into our free Income Tax Calculator and see your exact monthly tax, take-home and effective rate under both years side-by-side.