Salaried Individual Tax Slabs 2026-27
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 | 20% of excess over Rs 2,200,000 | Rs 316,000 |
| Rs 3,200,001 – Rs 4,100,000 | Rs 316,000 | 25% of excess over Rs 3,200,000 | Rs 541,000 |
| Rs 4,100,001 – Rs 5,600,000 | Rs 541,000 | 29% of excess over Rs 4,100,000 | Rs 976,000 |
| Rs 5,600,001 – Rs 7,000,000 | Rs 976,000 | 32% of excess over Rs 5,600,000 | Rs 1,424,000 |
| Above Rs 7,000,000 | Rs 1,424,000 | 35% of excess over Rs 7,000,000 | — |
💡 Key change from 2025-26: Two new brackets were inserted above the old top rate — 29% on Rs 4.1M–5.6M and 32% on Rs 5.6M–7M. The Rs 2.2M–3.2M bracket drops from 23% to 20%, and the Rs 3.2M–4.1M bracket drops from 30% to 25%. The 35% top rate now only kicks in above Rs 7 million, up from Rs 4.1 million — middle-to-high earners see the biggest relief.
Business / Non-Salaried Individual Slabs 2026-27
FBR has not yet published the official business / non-salaried income tax slabs for 2026-27. We will update this section as soon as the Finance Act 2026 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 2026-27 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 × 20% = Rs 200,000
- Remaining Rs 400,000 × 25% = Rs 100,000
- Total annual tax: Rs 416,000 (Rs 34,667/month)
- Effective tax rate: 11.6%
Example 4: Rs 500,000/month salary (Rs 6,000,000/year)
- Tax on first Rs 5,600,000 (slabs 1–6): Rs 976,000
- Remaining Rs 400,000 × 32% = Rs 128,000
- Total annual tax: Rs 1,104,000 (Rs 92,000/month)
- Effective tax rate: 18.4%
📊 Tip: Use our Income Tax Calculator to get your exact number in seconds — it handles all the bracket arithmetic automatically and lets you compare 2026-27 against 2025-26 and earlier years.
How Much Will You Save vs 2025-26?
For salaries under roughly Rs 2.2 million/year, nothing changes — the first three brackets are identical. The relief shows up once you cross into the higher brackets:
| Monthly Salary | Tax 2025-26 (annual) | Tax 2026-27 (annual) | Saving |
|---|---|---|---|
| Rs 80,000 | Rs 3,600 | Rs 3,600 | Rs 0 |
| Rs 150,000 | Rs 72,000 | Rs 72,000 | Rs 0 |
| Rs 300,000 | Rs 466,000 | Rs 416,000 | Rs 50,000 |
| Rs 500,000 | Rs 1,281,000 | Rs 1,104,000 | Rs 177,000 |
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 a different slab schedule.
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 Still 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) | 20% | 40% |
| Cash withdrawal (above Rs 50,000/day) | 0% | 0.6% |
| Property purchase | 1.25% | 10.5% |
| Vehicle registration (1000cc–1800cc) | Rs 25,000 | Rs 50,000 |
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 2027 for the 2026-27 tax year (the tax year ending 30 June 2027).
⚠️ Note: Tax year in Pakistan runs from 1 July to 30 June. The "2026-27" slabs apply to income earned between 1 July 2026 and 30 June 2027, with the return due by 30 September 2027.
Frequently Asked Questions
Is income up to Rs 600,000 completely tax-free in 2026-27?
Yes — income up to Rs 600,000 per year (Rs 50,000/month) carries a 0% rate, unchanged from 2025-26. No tax is payable.
What changed from 2025-26 to 2026-27?
The slab count grew from 6 to 8. Two new brackets were added —29% on Rs 4.1M–5.6M and 32% on Rs 5.6M–7M — and the Rs 2.2M–3.2M and Rs 3.2M–4.1M brackets were cut from 23%/30% to 20%/25%. The top rate stays at 35% but now only applies above Rs 7 million.
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 business / non-salaried slabs available for 2026-27 yet?
Not yet. FBR has not published business/non-salaried individual tax slabs for 2026-27 at the time of writing. This article and HisaabKaro's calculator will be updated as soon as the Finance Act 2026 notifications are gazetted.