Breakdown
How it works
Salaried individuals are taxed on annual income with a fixed amount plus a marginal rate per slab: Rs 600,000 exempt; 1% to 1.2m; Rs 6,000 + 11% to 2.2m; Rs 116,000 + 20% to 3.2m; Rs 316,000 + 25% to 4.1m; Rs 541,000 + 29% to 5.6m; Rs 976,000 + 32% to 7m; Rs 1,424,000 + 35% above. The 9% high-income surcharge was removed.
Formula
Worked example
Rs 250,000 a month = Rs 3m a year: 116,000 + (3,000,000 − 2,200,000) × 20% = Rs 276,000 a year, Rs 23,000 a month (9.2% effective).
Frequently asked questions
Is salary income taxed differently from business income?
Yes — salaried rates apply when salary is more than 75% of total income; business/non-salaried individuals face a different, steeper schedule.
Do overseas Pakistanis pay tax on Gulf salary?
No — non-residents (fewer than 183 days in Pakistan) are taxed only on Pakistan-source income. Remittances through banking channels are exempt and need no explanation up to Rs 5m a year.
Can I reduce the tax?
Tax credits for approved pension funds (VPS, up to 20% of income), charitable donations and Shariah-compliant investments; filer status also avoids the higher non-filer withholding rates on bank and property transactions.