The Finance Act 2026 brought genuine relief for salaried Pakistanis — every slab, with worked examples.
The Finance Act 2026 brought genuine relief for salaried Pakistanis: lower marginal rates in four slabs and the abolition of the surcharge on salaried income. Here's every slab, with worked examples.
| Annual taxable income | Tax rate |
|---|---|
| Up to Rs 600,000 | 0% |
| Rs 600,001 – 1,200,000 | 1% of amount exceeding Rs 600,000 |
| Rs 1,200,001 – 2,200,000 | Rs 6,000 + 11% of amount exceeding Rs 1,200,000 |
| Rs 2,200,001 – 3,200,000 | Rs 116,000 + 20% of amount exceeding Rs 2,200,000 |
| Rs 3,200,001 – 4,100,000 | Rs 316,000 + 25% of amount exceeding Rs 3,200,000 |
| Rs 4,100,001 – 5,600,000 | Rs 541,000 + 29% of amount exceeding Rs 4,100,000 |
| Above Rs 5,600,000 | Rs 976,000 + 32% of amount exceeding Rs 5,600,000 |
Don't want to do the math? Here's the monthly deduction and effective rate at common salary levels, computed from the slabs above:
| Monthly salary | Annual tax | Monthly tax | Effective rate |
|---|---|---|---|
| Rs 100,000 | Rs 6,000 | Rs 500 | 0.5% |
| Rs 150,000 | Rs 72,000 | Rs 6,000 | 4.0% |
| Rs 200,000 | Rs 156,000 | Rs 13,000 | 6.5% |
| Rs 300,000 | Rs 416,000 | Rs 34,667 | 11.6% |
| Rs 500,000 | Rs 1,104,000 | Rs 92,000 | 18.4% |
| Rs 1,000,000 | Rs 3,024,000 | Rs 252,000 | 25.2% |
Your exact figure depends on allowances and deductions — run your own number through the salary tax calculator.
Rs 100,000/month (Rs 1.2M/year): Falls at the top of the second slab. Tax = 1% × (1,200,000 − 600,000) = Rs 6,000/year — just Rs 500/month. Effective rate: 0.5%.
Rs 200,000/month (Rs 2.4M/year): Fourth slab: Rs 116,000 + 20% × (2,400,000 − 2,200,000) = 116,000 + 40,000 = Rs 156,000/year (Rs 13,000/month). Take-home: Rs 187,000/month.
Rs 500,000/month (Rs 6M/year): Top slab: Rs 976,000 + 32% × (6,000,000 − 5,600,000) = 976,000 + 128,000 = Rs 1,104,000/year (Rs 92,000/month). Effective rate: 18.4%.
Crossing into a higher slab does not tax your whole salary at the higher rate — only the rupees above the threshold. A raise from Rs 3.1M to Rs 3.3M/year doesn't suddenly cost you 25% on everything; it costs 25% on just the Rs 100,000 above Rs 3.2M. Take-home pay always rises with gross pay.
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