Tax Slab Breakdown
| Annual Income Range | Tax Rate | Fixed Tax | On Excess Above |
|---|
FAQ
📖 How to Use
- Select your income type (salaried or business).
- Enter your annual or monthly income in PKR.
- Add any applicable deductions (provident fund, Zakat, etc.).
- Click Calculate Tax — see annual tax, monthly deduction, and effective rate.
Pakistan Income Tax Calculator — FBR Tax Slabs for Salaried and Business Income
Pakistan's income tax system operates on a progressive slab structure under the Income Tax Ordinance 2001, administered by the Federal Board of Revenue (FBR). Under progressive taxation, higher income earners pay a higher percentage of their income in tax — but only on the portion of income that falls within each slab, not on their entire income. This distinction is widely misunderstood and causes many Pakistanis to overestimate their tax liability when they receive a raise or bonus.
Pakistan's tax year runs from 1 July to 30 June. Tax slabs are revised annually through the Finance Act passed with each Federal Budget. This calculator uses the current applicable slab rates and clearly shows how your income is divided across slabs and what percentage of your total income goes to tax (effective tax rate).
FY 2024–25 Tax Slabs: Salaried Individuals
| Annual Income (PKR) | Tax Rate | Fixed Tax + Rate on Excess |
|---|---|---|
| Up to 600,000 | 0% | Nil |
| 600,001 – 1,200,000 | 5% | 0 + 5% of amount over 600,000 |
| 1,200,001 – 2,200,000 | 15% | 30,000 + 15% of amount over 1,200,000 |
| 2,200,001 – 3,200,000 | 25% | 180,000 + 25% of amount over 2,200,000 |
| 3,200,001 – 4,100,000 | 30% | 430,000 + 30% of amount over 3,200,000 |
| Above 4,100,000 | 35% | 700,000 + 35% of amount over 4,100,000 |
Note: Slabs are reviewed annually. Always check the latest Finance Act or FBR website (fbr.gov.pk) for the most current rates before filing.
Worked Example: Rs 2,500,000 Annual Salary
- First Rs 600,000 → 0% = Rs 0
- Next Rs 600,000 (up to 1.2M) → 5% = Rs 30,000
- Next Rs 1,000,000 (up to 2.2M) → 15% = Rs 150,000
- Remaining Rs 300,000 (up to 2.5M) → 25% = Rs 75,000
- Total Tax: Rs 255,000
- Effective tax rate: 255,000 ÷ 2,500,000 = 10.2% (not 25%)
Tax Filing Obligations in Pakistan
- Filer vs. Non-Filer — filing a tax return makes you a "Filer" in FBR's Active Taxpayer List (ATL). Non-filers pay higher withholding tax rates on many transactions (bank profits, property transactions, vehicle purchases). Becoming a Filer is free and takes 20 minutes on FBR's Iris portal
- Filing deadline — September 30 for salaried individuals; October 31 for businesses (subject to extension announcements)
- Super Tax — additional super tax at rates of 1–10% applies to certain high-income entities and individuals above specific thresholds, as introduced in recent Finance Acts
Frequently Asked Questions
What is the difference between salaried and business income tax slabs?
Salaried individuals have their own tax slabs (as shown above) with more generous lower-bracket rates to reflect that their income has no deductible expenses. Business income (sole proprietors, AOPs) uses different slabs and allows deduction of business expenses before calculating taxable income. The calculator handles both categories.
My employer deducts tax from my salary — do I still need to file?
Yes — even if your employer withholds tax at source (Section 149), filing an annual return is required if your annual income exceeds the taxable threshold. Filing reconciles your withheld tax against actual liability and, if overpaid, generates a refund. More importantly, it adds you to FBR's Active Taxpayer List, entitling you to lower withholding tax rates on dozens of transactions.
Are freelance income and overseas remittances taxable in Pakistan?
Freelance income earned in foreign currency and remitted through banking channels is currently taxed at a reduced rate (1% as of recent Finance Acts, with potential full exemption under certain conditions for IT services exporters). Overseas remittances themselves (money sent home by Pakistanis abroad) are not taxable as income for the recipient. Consult a tax practitioner for the current rules as these have been subject to frequent changes.
How do I become an FBR Active Taxpayer (Filer)?
Register on FBR's Iris portal (iris.fbr.gov.pk) using your CNIC. File your income tax return for the latest tax year. Your name will appear on the Active Taxpayer List (updated weekly) within a few days. You'll receive reduced withholding tax rates on bank profit, property transactions, imports, dividends, and many other transactions — often saving more than your actual tax liability.
Does the calculator account for tax credits and deductions?
The calculator computes tax on gross income without deductions. Common allowable deductions/credits include: Zakat paid through scheduled banks (deductible), pension contributions, mortgage profit paid (for self-occupied property up to limits), and education expenses. For precise tax liability after all applicable deductions, consult a registered income tax practitioner or use FBR's Iris portal.