Salaried Individual Tax Slabs 2025-26
These slabs apply to salaried employees whose income from salary is more than 75% of their total income. The schedule is progressive — you only pay the higher rate on the portion of income that falls within that bracket, not on your entire salary.
| Annual Income | Fixed Tax | Rate on Excess | Max Tax in Bracket |
|---|---|---|---|
| Up to Rs 600,000 | Rs 0 | 0% | Rs 0 |
| Rs 600,001 – Rs 1,200,000 | Rs 0 | 1% of excess over Rs 600,000 | Rs 6,000 |
| Rs 1,200,001 – Rs 2,200,000 | Rs 6,000 | 11% of excess over Rs 1,200,000 | Rs 116,000 |
| Rs 2,200,001 – Rs 3,200,000 | Rs 116,000 | 23% of excess over Rs 2,200,000 | Rs 346,000 |
| Rs 3,200,001 – Rs 4,100,000 | Rs 346,000 | 30% of excess over Rs 3,200,000 | Rs 616,000 |
| Above Rs 4,100,000 | Rs 616,000 | 35% of excess over Rs 4,100,000 | — |
💡 Key change from 2024-25: The second bracket dropped from 5% to 1%, the third from 15% to 11%, and the fourth from 25% to 23%. Middle-income salaried workers see the biggest savings.
Business / Non-Salaried Individual Slabs 2025-26
FBR has not yet published the official business / non-salaried income tax slabs for 2025-26. We will update this section as soon as the Finance Act notifications are gazetted. In the meantime, check FBR's official portal for the latest figures or consult a tax advisor.
⚠️ Coming soon: Business / non-salaried slabs for 2025-26 will be added here once officially confirmed by FBR.
Worked Examples — Salaried
Example 1: Rs 80,000/month salary (Rs 960,000/year)
- First Rs 600,000: Rs 0 tax
- Remaining Rs 360,000 × 1% = Rs 3,600
- Total annual tax: Rs 3,600 (Rs 300/month)
- Effective tax rate: 0.38%
Example 2: Rs 150,000/month salary (Rs 1,800,000/year)
- First Rs 600,000: Rs 0 tax
- Next Rs 600,000 × 1% = Rs 6,000
- Remaining Rs 600,000 × 11% = Rs 66,000
- Total annual tax: Rs 72,000 (Rs 6,000/month)
- Effective tax rate: 4%
Example 3: Rs 300,000/month salary (Rs 3,600,000/year)
- First Rs 600,000: Rs 0 tax
- Next Rs 600,000 × 1% = Rs 6,000
- Next Rs 1,000,000 × 11% = Rs 110,000
- Next Rs 1,000,000 × 23% = Rs 230,000
- Remaining Rs 400,000 × 30% = Rs 120,000
- Total annual tax: Rs 466,000 (Rs 38,833/month)
- Effective tax rate: 12.9%
📊 Tip: Use our Income Tax Calculator to get your exact number in seconds — it handles all the bracket arithmetic automatically.
How Much Tax Did You Save vs 2024-25?
The 2025-26 reforms gave significant relief to salaried employees. Here's a quick comparison at common salary levels:
| Monthly Salary | Tax 2024-25 (annual) | Tax 2025-26 (annual) | Saving |
|---|---|---|---|
| Rs 80,000 | Rs 18,000 | Rs 3,600 | Rs 14,400 |
| Rs 150,000 | Rs 120,000 | Rs 72,000 | Rs 48,000 |
| Rs 200,000 | Rs 210,000 | Rs 127,000 | Rs 83,000 |
| Rs 300,000 | Rs 580,000 | Rs 466,000 | Rs 114,000 |
Key Definitions
Who is a "Salaried Individual"?
FBR defines a salaried individual as someone whose salary income exceeds 75% of their total taxable income. If you have significant side income (freelancing, rental, business), you may be reclassified as a business individual and face higher rates.
What Counts as Salary?
Salary includes basic pay, allowances (house rent, medical, conveyance), bonuses, gratuity, and any benefit provided by the employer. Most allowances up to prescribed limits are included in taxable salary.
What Deductions Can Reduce Your Tax?
- Zakat paid: Deducted from taxable income if paid to approved institutions.
- Pension contributions: Contributions to an approved pension fund are deductible up to 20% of your income (or Rs 5 million, whichever is lower).
- Education expense relief: For tuition fees at accredited institutions — up to Rs 60,000 per child, max 3 children.
- Donations: Donations to approved NPOs may be fully or partially deductible.
Filer vs Non-Filer: Why Filing Matters
Being an active tax filer (on FBR's Active Taxpayers List) reduces withholding tax on dozens of transactions — bank profits, property transfers, vehicle purchases, and more. Non-filers pay double or more on these transactions. Filing your return even if you owe no tax is almost always worth it.
| Transaction | Filer Rate | Non-Filer Rate |
|---|---|---|
| Bank profit (profit on debt) | 15% | 30% |
| Cash withdrawal (above Rs 50,000/day) | 0% | 0.6% |
| Property purchase | 3% | 6% |
| Vehicle registration (1000cc–1800cc) | Rs 10,000 | Rs 30,000 |
How to File Your Return (Quick Steps)
- Register on Iris (iris.fbr.gov.pk) using your CNIC.
- Collect your annual salary certificate from your employer (Form 12C).
- Log in to Iris, select Declaration → 114(I) — Return of Income.
- Enter income, deductions, and tax already deducted by employer.
- Submit by 30 September 2025 for the 2024-25 tax year (the tax year ending 30 June 2025).
⚠️ Note: Tax year in Pakistan runs from 1 July to 30 June. The "2025-26" slabs apply to income earned between 1 July 2025 and 30 June 2026, with the return due by 30 September 2026.
Frequently Asked Questions
Is income up to Rs 600,000 completely tax-free in 2025-26?
Yes — for both salaried and business individuals, income up to Rs 600,000 per year (Rs 50,000/month) carries a 0% rate. No tax is payable.
My employer deducts tax every month. Do I still need to file?
Yes. Even if your employer deducts the correct amount, you must file an annual return to remain on the Active Taxpayers List and claim any over-deduction refund.
What if I have both a salary and freelance income?
You need to declare both. If your freelance income pushes your non-salary portion above 25% of total income, you may be classified as a business individual — which has a separate slab schedule. Consult a tax advisor if this applies to you.
Are there surcharges on high earners?
The Finance Act 2025 does not include a separate super-tax for individuals (super-tax applies to companies above certain profit thresholds). However, the 35% top rate kicks in above Rs 4.1 million annual salary for salaried individuals.