Pakistan Income Tax and Salary Rates, Explained Simply
Learn how income tax works in Pakistan for 2026–27: how salary tax is calculated, who may need to file a return, what tax residency means and which records to keep.
Key takeaways
- Higher tax rates apply as income moves into higher bands, but only the income inside each band is charged at that rate.
- Pakistan’s tax year usually runs from 1 July to 30 June.
- FBR groups income into five main types when working out tax.
- You may need to file a return even if your employer already deducted tax or you have no extra tax to pay.
How Pakistan’s tax system works
The Federal Board of Revenue (FBR) collects income tax across Pakistan. Provincial authorities collect some other taxes, including taxes on services and property. In many cases, tax is taken out before you receive a payment.
Federal income tax — handled by FBR
FBR collects income tax from people and businesses across Pakistan.
The main rules are in the Income Tax Ordinance 2001 and are updated through Finance Acts.
Provincial taxes — services, property and farming
Each province has its own revenue authority for taxes under provincial rules.
Examples include sales tax on services, some taxes linked to property, and income from farming — which is left out of federal tax and charged by the province instead.
Tax deducted before you are paid
Employers, banks and some customers may take tax out of a payment and send it to FBR.
This deduction may reduce the tax you owe later or, for some payments, count as the full tax due.
The tax year and your tax residency
Tax year
Pakistan’s usual tax year runs from:
FBR and the tax law call this period Tax Year 2027 because it ends in 2027. You will also see this name in IRIS, FBR’s online tax portal.
Who counts as a resident for tax?
Tax residency is a legal status and is not the same as citizenship. It usually depends on how many days you spend in Pakistan, along with other conditions in the tax law.
Resident for tax purposes
- Pakistan may tax income you earn both inside and outside the country.
- If you paid tax in another country, the rules may let you subtract some or all of it from your Pakistan tax bill.
Non-resident for tax purposes
- You usually pay Pakistan income tax only on income that comes from Pakistan.
- A tax agreement between Pakistan and another country may lower the amount you have to pay.
The five types of income FBR uses
- 1
Salary
Pay from a job, including bonuses, benefits and allowances.
- 2
- 3
Business income
Profit from a business, professional work or freelancing.
- 4
Profit from selling assets
Taxable profit from selling certain assets. Shares and mutual funds are taxed on their own at a fixed rate; property has its own separate calculator.
Capital gains calculator - 5
Other income
Income that does not fit the first four types, such as some investment income.
Salary tax rates — 2026–27
| Yearly salary subject to tax | How tax is calculated |
|---|---|
| Up to PKR 600,000 | No tax |
| PKR 600,001–1,200,000 | 1% of the amount over PKR 600,000 |
| PKR 1,200,001–2,200,000 | PKR 6,000, plus 11% of the amount over PKR 1,200,000 |
| PKR 2,200,001–3,200,000 | PKR 116,000, plus 20% of the amount over PKR 2,200,000 |
| PKR 3,200,001–4,100,000 | PKR 316,000, plus 25% of the amount over PKR 3,200,000 |
| PKR 4,100,001–5,600,000 | PKR 541,000, plus 29% of the amount over PKR 4,100,000 |
| PKR 5,600,001–7,000,000 | PKR 976,000, plus 32% of the amount over PKR 5,600,000 |
| Above PKR 7,000,000 | PKR 1,424,000, plus 35% of the amount over PKR 7,000,000 |
Pakistan uses income bands. If your salary moves into a higher band, the higher rate applies only to the part above that band’s starting point—not to your whole salary.
Calculate your salary taxExample: yearly salary of PKR 2,400,000
A simple calculation before any tax reductions or extra tax charges:
- 1
Tax on salary up to PKR 2,200,000
PKR 116,000
- 2
Tax on the remaining PKR 200,000 at 20%
PKR 40,000
- 3
Total tax for the year
PKR 156,000
Could you need to file a tax return?
Check the current FBR rules if any of these apply to you:
- Your income after allowed deductions is above the filing limit.
- You earn money through a business, professional work or freelancing.
- You own property, land or a vehicle covered by FBR’s filing rules.
- You receive income from abroad or own assets outside Pakistan.
- You want a tax refund or your name on the Active Taxpayers List (ATL).
The full list of filing rules is in section 114 of the Income Tax Ordinance. The answer depends on your income, assets and other details—even if you have no extra tax to pay.
Due dates and records to keep
FBR normally sets 30 September as the return deadline for individuals and Associations of Persons (AOPs), such as many partnerships. FBR can extend this date, so check its latest notice. If you earn income that can be taxed, FBR says to keep your tax-return records for six years.
What to read next
Use these practical guides for the next steps.