FBR salary tax slabs 2026-27: what changed and your new take-home
What happened
The Finance Act 2026 revised the salary tax slabs for Tax Year 2026-27, effective 1 July 2026, and abolished the 9% surcharge that previously applied to high-income salaried filers. The old single 35% band starting at PKR 4.1 million was split into three steps — 29%, 32% and 35% — so the top rate now begins only above PKR 7 million. The tax-free threshold stays at PKR 600,000/year (PKR 50,000/month).
Why it matters
The revised middle and upper-middle slabs mean lower monthly withholding for a large band of salaried professionals. If you sit in the PKR 2.2m-5.6m annual range, your take-home changed the day the new slabs took effect.
Who is affected
- Salaried employees earning above PKR 600,000/year
- Mid-career professionals in the PKR 2.2m-5.6m band, who saw the largest cuts
- High earners previously paying the abolished surcharge
| PKR 2.2m-3.2m slab | 23% | 20% | |
| PKR 3.2m-4.1m slab | 30% | 25% | |
| PKR 4.1m-5.6m slab | 35% | 29% | |
| Top 35% rate starts at | PKR 4.1m | PKR 7.0m | |
| Surcharge (salaried) | 9% | Abolished |
Lower slabs lift monthly take-home for the middle band
Illustrative only — your exact figure depends on allowances and tax credits
| Item | Before | After |
|---|---|---|
| Tax-free threshold | PKR 600,000/yr | PKR 600,000/yr |
| PKR 3.2m-4.1m marginal rate | 30% | 25%▼ −5 pts |
| High-income surcharge (salaried) | 9% | 0% |
Illustrative estimate based on Finance Act 2026 slabs. Not tax advice — confirm with a tax professional for your situation.
The full FBR salaried slab table for 2026-27
Pakistan's salary tax is progressive: each band only taxes the portion of income that falls inside it, so crossing into a higher slab never reduces your take-home. Find your annual taxable income in the first column, then apply the formula in the third.
Salaried Tax Slabs (FY 2026-27)
Annual taxable income · effective 1 July 2026
| Annual taxable income | Rate | Tax payable |
|---|---|---|
| Up to PKR 600,000 | 0% | 0% (tax free) |
| PKR 600,001 – 1,200,000 | 1% | 1% of the amount exceeding PKR 600,000 |
| PKR 1,200,001 – 2,200,000 | 11% | PKR 6,000 + 11% of the amount exceeding PKR 1,200,000 |
| PKR 2,200,001 – 3,200,000 | 20% | PKR 116,000 + 20% of the amount exceeding PKR 2,200,000 |
| PKR 3,200,001 – 4,100,000 | 25% | PKR 316,000 + 25% of the amount exceeding PKR 3,200,000 |
| PKR 4,100,001 – 5,600,000 | 29% | PKR 541,000 + 29% of the amount exceeding PKR 4,100,000 |
| PKR 5,600,001 – 7,000,000 | 32% | PKR 976,000 + 32% of the amount exceeding PKR 5,600,000 |
| Above PKR 7,000,000 | 35% | PKR 1,424,000 + 35% of the amount exceeding PKR 7,000,000 |
Surcharge: The 9% surcharge under s.4AB has been abolished for salaried individuals. It still applies to non-salaried (business income) filers.
Applies to salaried individuals only (salary above 75% of total taxable income). Freelancers and business income are taxed under a separate schedule.
Source: Federal Board of Revenue (FBR) — Finance Act 2026 · Effective 1 July 2026 · Last verified 28 July 2026
Pakistan salary and freelancer tax slabs verified against the Finance Bill 2026 presented June 12, 2026.
Last verified: 26 July 2026 · About our data
Frequently asked questions
What are the income tax slabs in Pakistan for 2026-27?
For Tax Year 2026-27: up to PKR 600,000 = 0%; 600,001-1,200,000 = 1%; 1,200,001-2,200,000 = 11%; 2,200,001-3,200,000 = 20%; 3,200,001-4,100,000 = 25%; 4,100,001-5,600,000 = 29%; 5,600,001-7,000,000 = 32%; above 7,000,000 = 35%. Source: Finance Act 2026 (FBR), effective 1 July 2026.
What changed in Budget 2026-27 for salary tax?
Rates were cut and the top band was split: 2.2m-3.2m from 23% to 20%; 3.2m-4.1m from 30% to 25%; and the old flat 35% above 4.1m became 29% (4.1m-5.6m), 32% (5.6m-7.0m) and 35% (above 7.0m). The 9% surcharge was abolished for salaried filers — it still applies to non-salaried filers.
What is the tax-free salary threshold for 2026-27?
PKR 600,000 per year (PKR 50,000 per month). Salaried individuals at or below this pay no income tax.
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