Pakistan Tax Slabs 2025-26
Official FBR income tax rates for the fiscal year 2025-2026. Understand exactly which tax bracket you fall into and how much income tax you owe.
Written By: Haider Bosal
Reviewed By: Editorial Team
Last Updated: June 2026
✓ Updated for Finance Act 2026-2027
Quick Summary (TL;DR)
- Exemption Limit: Annual income up to Rs. 600,000 is 100% tax-free.
- Salaried vs Non-Salaried: Different rates apply. You are "salaried" if salary is >75% of your Taxable Income.
- Surcharge: A 10% surcharge applies if income exceeds Rs. 10 million.
To automatically apply these rules to your earnings, use our Income Tax Calculator or the Salary Tax Calculator.
Salaried Tax Slabs (2025-26)
Applies to individuals whose salary constitutes more than 75% of their total taxable income.
Salaried Individuals Tax Slabs (2025-26)
| Sr. No | Income Range (Yearly) | Fixed Tax | Rate on Exceeding Amount |
|---|---|---|---|
| 1 | Up to Rs 600,000 | Rs 0 | 0% |
| 2 | Rs 600,001 to Rs 1,200,000 | Rs 0 | 5.0% of amount exceeding Rs 600,000 |
| 3 | Rs 1,200,001 to Rs 2,200,000 | Rs 30,000 | 15.0% of amount exceeding Rs 1,200,000 |
| 4 | Rs 2,200,001 to Rs 3,200,000 | Rs 180,000 | 25.0% of amount exceeding Rs 2,200,000 |
| 5 | Rs 3,200,001 to Rs 4,100,000 | Rs 430,000 | 30.0% of amount exceeding Rs 3,200,000 |
| 6 | Exceeding Rs 4,100,000 | Rs 700,000 | 35.0% of amount exceeding Rs 4,100,000 |
Non-Salaried & Business Tax Slabs (2025-26)
Applies to freelancers, business owners, AOPs, and individuals whose salary is 75% or less of their total income.
Non-Salaried / Business Individuals Tax Slabs (2025-26)
| Sr. No | Income Range (Yearly) | Fixed Tax | Rate on Exceeding Amount |
|---|---|---|---|
| 1 | Up to Rs 600,000 | Rs 0 | 0% |
| 2 | Rs 600,001 to Rs 800,000 | Rs 0 | 15.0% of amount exceeding Rs 600,000 |
| 3 | Rs 800,001 to Rs 1,200,000 | Rs 30,000 | 20.0% of amount exceeding Rs 800,000 |
| 4 | Rs 1,200,001 to Rs 2,400,000 | Rs 110,000 | 30.0% of amount exceeding Rs 1,200,000 |
| 5 | Rs 2,400,001 to Rs 3,000,000 | Rs 470,000 | 40.0% of amount exceeding Rs 2,400,000 |
| 6 | Rs 3,000,001 to Rs 4,000,000 | Rs 710,000 | 45.0% of amount exceeding Rs 3,000,000 |
| 7 | Exceeding Rs 4,000,000 | Rs 1,160,000 | 50.0% of amount exceeding Rs 4,000,000 |
Common Mistakes When Reading Slabs
Applying Percentage to Total Income
The Mistake: Multiplying your total income by the tax bracket percentage.
The Reality: The percentage only applies to the amount exceeding the minimum threshold of that specific bracket, not the entire income.
Using the Wrong Table
The Mistake: Freelancers or business owners using the Salaried tax slabs.
The Reality: If your salary is not more than 75% of your income, you must use the Non-Salaried tables, which have higher rates.
Ignoring Filer Status
The Mistake: Assuming these rates apply fully if you are a non-filer.
The Reality: Non-filers face significantly higher withholding taxes on transactions, even if basic income tax rates are identical. Learn how to become a filer.
Frequently Asked Questions
What are the FBR tax slabs for 2025-26?
The FBR tax slabs for 2025-26 are progressive income tax brackets applied to salaried and non-salaried individuals, with a minimum exemption threshold of Rs. 600,000 annually.
What is considered a salaried person in Pakistan?
An individual is considered salaried if their salary income exceeds 75% of their total taxable income for the fiscal year.
How are income tax slabs calculated?
Your total income is matched against the defined brackets. You pay a fixed base tax amount for that bracket plus a specific percentage on any amount exceeding the minimum threshold.
How can I calculate my exact tax liability?
You can calculate your exact tax liability using our free Income Tax Calculator or Salary Tax Calculator.
Is there a difference in tax slabs for male and female taxpayers in Pakistan?
No, the FBR income tax slabs for the fiscal year 2025-26 are identical for male and female taxpayers.
What is the tax rate on pension income in Pakistan?
Generally, pension received by a citizen of Pakistan from former employment is exempt from tax, subject to certain conditions under the Income Tax Ordinance, 2001.
Are agricultural incomes taxable under FBR tax slabs?
No, agricultural income is exempt from federal income tax under the Income Tax Ordinance. However, it may be subject to provincial agricultural income tax depending on the province.
Does the surcharge of 10% apply to everyone?
No, a 10% surcharge on tax liability only applies to individuals (both salaried and non-salaried) whose taxable income exceeds Rs. 10 million (1 crore) in a tax year.
Can a salaried person claim deductions for rent or utility bills?
No, standard utility bills and home rent are not directly deductible from taxable salary income. However, certain deductions like profit on home loans (mortgages) or education fees may offer tax relief under specific conditions.
What happens if I don't file my income tax return?
If you do not file your income tax return, your name will not appear on the Active Taxpayers List (ATL). As a non-filer, you will face much higher withholding tax rates on bank transactions, property purchases, vehicle registration, and utility services, and may face penalties from the FBR. Learn how to become a filer.
How is the tax year defined in Pakistan?
The tax year in Pakistan starts on July 1st of one calendar year and ends on June 30th of the following calendar year. For example, Tax Year 2026 runs from July 1, 2025, to June 30, 2026.
How are bonuses and commissions taxed?
Bonuses, commissions, and other performance-based allowances received from an employer are considered part of your total taxable salary and are taxed according to the applicable salaried tax slabs.
What is the difference between tax credits and tax exemptions?
A tax exemption excludes certain income (like pension or agricultural income) from being taxed at all. A tax credit, on the other hand, reduces your actual calculated tax liability (e.g., credit for donations or investment in pension funds).
Are freelancers taxed as salaried or non-salaried individuals?
Freelancers are generally classified as non-salaried individuals or sole proprietors. Unless they receive 75% or more of their total income as a formal salary, they must use the Non-Salaried & Business tax slabs. You can refer to our Business Tax Guide for more information.
Calculate Your Tax Instantly
Skip the manual math. Use our updated 2025-26 calculators to find your exact tax liability in seconds.
How Pakistan Income Tax Slabs Work
Understanding how your income is taxed can sometimes feel overwhelming. However, Pakistan's tax system is designed to be fair and progressive. By breaking down your total annual earnings into distinct brackets or "slabs," the Federal Board of Revenue (FBR) ensures that tax rates are applied proportionally. Let's explore how this works in simple terms.
What is an Income Tax Slab?
An income tax slab is simply a range of income that is taxed at a specific rate. Instead of taxing everyone at the same flat rate, the FBR defines different income brackets. As your income increases, the rate of tax on the additional income also increases. If you want to estimate your tax, you can use our Income Tax Calculator to see which slabs apply to you.
Why a Slab System is Used
Pakistan uses a slab system to implement a fair tax collection mechanism. It ensures that individuals with higher earnings contribute a larger percentage of their income to the national treasury, while low-income earners are protected with low or zero tax rates. For instance, the first Rs. 600,000 of annual income is completely tax-free for everyone.
How Progressive Taxation Works
Progressive taxation is the principle behind the slab system. Under this model, the tax rate increases step-by-step as the taxpayer's income grows. It prevents a scenario where a sudden increase in salary leaves a worker with less take-home pay. Each portion of your income is only taxed at the rate of the slab it falls into.
The 'Higher Bracket' Misconception
A common mistake is thinking that moving into a higher tax slab means your entire salary will be taxed at that new, higher rate. This is not true. Only the amount of money that falls above the lower slab's threshold is taxed at the higher rate. Your previous earnings below the threshold are still taxed at their respective lower rates. Use our Salary Tax Calculator to visualize this breakdown.
Who Should Use These Tax Slabs?
These FBR income tax slabs apply to all individual taxpayers, sole proprietorships, and Association of Persons (AOPs) in Pakistan. Depending on the nature of your income, you must determine which category you belong to:
- Salaried Individuals: If you are formally employed and your salary constitutes more than 75% of your total taxable income, you must use the Salaried Tax Slabs.
- Non-Salaried & Business Individuals: If you are a freelancer, consultant, sole proprietor, or run a small business where your salary income is 75% or less of your total taxable income, you must use the Non-Salaried & Business Tax Slabs. See our Business Tax Guide for more details.
- Association of Persons (AOPs): Partnerships and joint ventures are also taxed under the Non-Salaried individual rates.
Why Income Tax Slabs Change Every Year
Every year, during the presentation of the federal budget, the Government of Pakistan and the FBR review and revise the income tax slabs. Here are the primary reasons why these changes occur:
Inflation Adjustments
As the cost of living increases, the government may adjust the exemption threshold (e.g., keeping it at Rs. 600,000) and slab boundaries to protect the purchasing power of citizens from "bracket creep."
FBR Revenue Targets
To meet national development expenses and debt obligations, the government may adjust the tax percentages or fixed tax amounts in higher brackets to increase tax collections from high-income groups.
Economic Policy Goals
Tax rates are modified to encourage certain economic behaviors, such as promoting documentation of the economy by widening the tax gap between active filers and non-filers. Learn how to become a filer to avoid high withholding penalties.
2025–26 Income Tax Slabs Explained
Salaried Tax Slabs Explained
Here is a detailed breakdown of the 6 tax slabs for salaried individuals whose salary income is more than 75% of their total income.
Rs. 0 to Rs. 600,000
Fixed Tax: Rs. 0
Any annual salary up to Rs. 600,000 is 100% tax-free. No tax is deducted.
Rs. 600,001 to Rs. 1,200,000
Fixed Tax: Rs. 0
You pay 5% tax only on the amount that exceeds Rs. 600,000.
Rs. 1,200,001 to Rs. 2,200,000
Fixed Tax: Rs. 30,000
You pay a flat Rs. 30,000 plus 15% on the amount exceeding Rs. 1,200,000.
Rs. 2,200,001 to Rs. 3,200,000
Fixed Tax: Rs. 180,000
You pay a flat Rs. 180,000 plus 25% on the amount exceeding Rs. 2,200,000.
Rs. 3,200,001 to Rs. 4,100,000
Fixed Tax: Rs. 430,000
You pay a flat Rs. 430,000 plus 30% on the amount exceeding Rs. 3,200,000.
Above Rs. 4,100,000
Fixed Tax: Rs. 700,000
You pay a flat Rs. 700,000 plus 35% on all income above Rs. 4.1 million.
Non-Salaried & Business Slabs Explained
Here is a detailed breakdown of the 7 tax slabs for freelancers, consultants, business owners, and partnerships (AOPs).
Rs. 0 to Rs. 600,000
Fixed Tax: Rs. 0
Any annual business income up to Rs. 600,000 is 100% tax-free. No tax is deducted.
Rs. 600,001 to Rs. 800,000
Fixed Tax: Rs. 0
You pay 15% tax only on the amount exceeding Rs. 600,000.
Rs. 800,001 to Rs. 1,200,000
Fixed Tax: Rs. 30,000
You pay a flat Rs. 30,000 plus 20% on the amount exceeding Rs. 800,000.
Rs. 1,200,001 to Rs. 2,400,000
Fixed Tax: Rs. 110,000
You pay a flat Rs. 110,000 plus 30% on the amount exceeding Rs. 1,200,000.
Rs. 2,400,001 to Rs. 3,000,000
Fixed Tax: Rs. 470,000
You pay a flat Rs. 470,000 plus 40% on the amount exceeding Rs. 2,400,000.
Rs. 3,000,001 to Rs. 4,000,000
Fixed Tax: Rs. 710,000
You pay a flat Rs. 710,000 plus 45% on the amount exceeding Rs. 3,000,000.
Above Rs. 4,000,000
Fixed Tax: Rs. 1,160,000
You pay a flat Rs. 1,160,000 plus 50% on all income exceeding Rs. 4,000,000.
Comparison Summary: Salaried vs Non-Salaried
The table below provides a direct comparison between Salaried and Non-Salaried tax brackets. Notice how non-salaried individuals generally face higher tax percentages and lower slab thresholds compared to salaried individuals.
| Annual Income Bracket (PKR) | Salaried Tax Formula (2025-26) | Non-Salaried & Business Formula (2025-26) |
|---|---|---|
| Up to 600,000 | 0% (Tax-Free) | 0% (Tax-Free) |
| 600,001 to 800,000 | 5% of amount > 600,000 | 15% of amount > 600,000 |
| 800,001 to 1,200,000 | 5% of amount > 600,000 | Rs. 30,000 + 20% of amount > 800,000 |
| 1,200,001 to 2,200,000 | Rs. 30,000 + 15% of amount > 1,200,000 | Rs. 110,000 + 30% of amount > 1,200,000 (up to 2,400,000) |
| 2,200,001 to 3,200,000 | Rs. 180,000 + 25% of amount > 2,200,000 | Rs. 110,000 + 30% of amount > 1,200,000 (up to 2.4M) Rs. 470,000 + 40% of amount > 2.4M (up to 3.0M) Rs. 710,000 + 45% of amount > 3.0M (above 3.0M) |
| 3,200,001 to 4,100,000 | Rs. 430,000 + 30% of amount > 3,200,000 | Rs. 710,000 + 45% of amount > 3,000,000 (up to 4.0M) Rs. 1,160,000 + 50% of amount > 4.0M (above 4.0M) |
| Above 4,100,000 | Rs. 700,000 + 35% of amount > 4,100,000 | Rs. 1,160,000 + 50% of amount > 4,000,000 |
Salary Examples
To show how the progressive tax system works in practice, here are five calculation examples for salaried individuals. Notice how the effective tax rate increases as the annual salary rises, ensuring high-income earners pay their fair share.
| Annual Salary (PKR) | Estimated Annual Tax | Monthly Tax | Effective Tax Rate |
|---|---|---|---|
| Rs. 600,000 | Rs. 0 | Rs. 0 | 0.00% |
| Rs. 900,000 | Rs. 15,000 | Rs. 1,250 | 1.67% |
| Rs. 1,200,000 | Rs. 30,000 | Rs. 2,500 | 2.50% |
| Rs. 2,000,000 | Rs. 150,000 | Rs. 12,500 | 7.50% |
| Rs. 3,000,000 | Rs. 380,000 | Rs. 31,667 | 12.67% |
Note: These calculations assume that the individual has no other source of taxable income and is considered a salaried person. For automatic calculation of other salary levels, use our Salary Tax Calculator.
Common Mistakes People Make
Calculating or declaring tax liability can lead to errors if you are not careful. Below are the most common pitfalls taxpayers face when navigating FBR tax slabs:
1. Using the Wrong Tax Year
Tax rates are updated annually by the FBR. A common mistake is using the previous year's slabs to calculate current tax liability, leading to underpayment or overpayment of taxes. Ensure you refer to the current Tax Year 2026 (2025-26) slabs.
2. Confusing Monthly and Annual Salary
All FBR official income tax slabs are calculated based on annual income. If you apply a monthly salary amount to the annual brackets, the calculation will be completely incorrect. Remember to multiply your monthly taxable pay by 12 before matching it with the tax slabs.
3. Ignoring Taxable Allowances
Many individuals assume only their basic salary is taxable. In reality, most allowances (like house rent allowance, utility allowance, and bonuses) are fully or partially taxable. Check our guide on Taxable Income to see what counts.
4. Using Outdated Tax Slabs
Many online blogs and older calculators host obsolete tables. Always use official resources or verify that your source states the slabs are for the fiscal year 2025-26 to stay compliant.
5. Not Deducting Exemptions
Failing to account for tax-exempt items like specific pensions, allowances for travel, or medical expenditures up to certain limits means you will end up paying more tax than legally required. Make sure you claim all legal exemptions.
Tips to Reduce Your Tax Legally
The FBR provides multiple legal avenues for individual taxpayers to reduce their tax liabilities. By understanding these opportunities, you can lower your effective tax rate while remaining fully compliant with the law.
1. Claim Tax Credits
Tax credits are deductions allowed against your final tax liability. In Pakistan, you can claim tax credits for investments in new shares, life insurance premiums, and health insurance premiums, subject to limitations set in the Income Tax Ordinance.
2. Invest in Approved Pension Funds
Contributions to a Voluntary Pension System (VPS) approved by the Securities and Exchange Commission of Pakistan (SECP) qualify for a tax credit. This is one of the most effective ways for salaried and self-employed individuals to secure their retirement while saving on tax.
3. Make Charitable Donations
Donations made to non-profit organizations, charities, and educational or healthcare institutions listed in the Second Schedule of the Income Tax Ordinance are eligible for tax credits. Keep the official receipt as proof of donation when filing.
4. Utilize Allowed Deductions
Certain payments can be deducted directly from your taxable income before applying the tax slabs. These include profit paid on a home loan (mortgages) for constructing or purchasing a house, and university tuition fees paid for your children (subject to limits based on taxable income).
5. Become an Active Tax Filer
The single most important step is filing your returns on time. While filing does not directly lower the basic tax slab rate on your salary, it drastically reduces withholding taxes on daily activities like banking, buying property, buying a car, and paying electricity bills. Read our guide on how to become a filer to get started.
Related Tax Resources
Explore our other free guides and calculators to manage your FBR taxes efficiently:
Income Tax Calculator
Calculate your overall income tax liability including business income, salary, and other sources.
Salary Tax Calculator
Quickly estimate your monthly and annual salary deductions and take-home pay under FBR rules.
Taxable Income Guide
Learn what allowances, perks, and benefits are exempt and which ones are taxable in Pakistan.
How to Become a Filer
A step-by-step guide to registering on the FBR IRIS portal and becoming an active taxpayer.
Business Tax Guide
A comprehensive guide for entrepreneurs, partnerships (AOPs), and companies filing taxes in Pakistan.