Income Tax in Pakistan: Salaried Slabs & Worked Example
Salaried tax is slab-wise, not one flat rate on your whole salary. This guide shows the formula, the slabs the calculator uses, and a worked example at Rs 300,000 per month.
Try it yourself: Income Tax Calculator — enter your monthly salary for your own annual tax, monthly tax and take-home pay.
The formula
Annual income is taxed slab by slab, exactly like electricity slabs: only the income inside each slab pays that slab's rate. The calculator works from your annual income (monthly salary × 12), finds the matching slab, and applies its fixed amount plus the marginal rate on the excess:
Annual tax = slab fixed amount + (annual income − slab floor) × slab rate.
Slabs used by the calculator (Finance Act 2025, Tax Year 2025-26):
| Annual income | Tax |
|---|---|
| Up to Rs 600,000 | Rs 0 |
| Rs 600,001 – 1,200,000 | 1% of income above Rs 600,000 |
| Rs 1,200,001 – 2,200,000 | Rs 6,000 + 11% of income above Rs 1,200,000 |
| Rs 2,200,001 – 3,200,000 | Rs 116,000 + 23% of income above Rs 2,200,000 |
| Rs 3,200,001 – 4,100,000 | Rs 346,000 + 30% of income above Rs 3,200,000 |
| Above Rs 4,100,000 | Rs 616,000 + 35% of income above Rs 4,100,000 |
Worked example: Rs 300,000 per month
Annual income = Rs 300,000 × 12 = Rs 3,600,000. That falls in the Rs 3,200,001 – 4,100,000 slab, so:
- Fixed amount: Rs 346,000.
- Excess over the slab floor: Rs 3,600,000 − Rs 3,200,000 = Rs 400,000.
- 30% of the excess: Rs 400,000 × 30% = Rs 120,000.
- Annual tax = Rs 346,000 + Rs 120,000 = Rs 466,000.
- Monthly tax = Rs 466,000 ÷ 12 = about Rs 38,833.
- Take-home pay = Rs 300,000 − Rs 38,833 = about Rs 261,167 per month.
- Effective rate = Rs 466,000 ÷ Rs 3,600,000 = about 12.94% — not 30%, because only the last Rs 400,000 was taxed at 30%.
Assumptions behind these figures
- Salaried individual, Finance Act 2025 slabs (Tax Year 2025-26) as used by the calculator in October 2026.
- Monthly salary × 12 is treated as the full annual taxable income; allowances, deductions and exemptions are not modelled.
- Surcharge on very high incomes is not included in the calculator's estimate.
- Business and other income sources are not covered — this is a salaried guide.
Common mistakes
- Applying the top rate to your whole salary. At Rs 300,000/month the marginal rate is 30%, but the effective rate is only about 12.94% — slabs below are taxed at lower rates or not at all.
- Taxing monthly salary as if it were annual. The slabs are annual; always multiply by 12 first.
- Using last year's slabs. Slabs change every budget. Verify the current tax year's slabs with FBR before filing.
- Assuming the calculator is a filing. It is an estimate for planning; your employer's withholding and your FBR return are what count.
Source and date note
The figures in this guide follow the Income Tax Calculator's slabs (Finance Act 2025, Tax Year 2025-26) as of October 2026. Slabs change every budget, so verify the current year's slabs with FBR. This guide is general information only, not tax advice.
Related calculators
- Income Tax Calculator — your own annual tax, monthly tax and take-home pay.
- Salary Slip Generator — a printable monthly pay slip.
- Filer vs Non-Filer Guide — why filer status changes the tax on transactions.