Income Tax Calculator
Pakistan income tax for salaried and business individuals — FBR Tax Year 2026-27
Frequently Asked Questions
Income tax in Pakistan is charged on a progressive slab basis under the Income Tax Ordinance, 2001 — the more you earn above the annual threshold, the higher the rate on each additional rupee, not on your whole income at once. This is the single most-searched tax calculation in the country, and for good reason: it determines both your monthly take-home pay if you're salaried and your annual liability if you run a business.
How income tax is actually calculated
FBR applies two separate slab tables depending on how you earn: a salaried table (used when more than 75% of your taxable income comes from salary) and a business/AOP table for everyone else — sole proprietors, partners in an Association of Persons, and freelancers who don't qualify for the reduced IT-export rate. The business table's rates rise faster at lower income levels, on the theory that a salaried employee already has tax withheld at source with no ability to under-report, while a business owner self-assesses.
Both tables are marginal, not flat: if a slab says "20% on income above Rs 2,200,000," that 20% applies only to the portion above that line, not to your entire income. This calculator applies both current-year (2026-27) and prior-year (2025-26) slabs side by side, since Finance Act changes each June can shift the brackets.
A worked example
A salaried employee earning Rs 150,000/month (Rs 1,800,000/year) falls above the Rs 600,000 no-tax threshold but within a lower-middle slab — their FBR liability lands in the tens of thousands annually, not hundreds of thousands, because only the income above each bracket boundary is taxed at that bracket's rate. Run your own exact figure through the calculator above rather than estimating by hand — slab boundaries shift often enough that a rough mental calculation is usually wrong by a meaningful margin.
How this connects to your other tax obligations
Income tax rarely stands alone. If you're salaried, your employer already withholds an estimate of it every month — reconcile that against the Salary Calculator to see your real take-home pay after EOBI and provident fund too. Freelancers and IT exporters should check the Freelancer Tax Calculator first, since IT export income taxed under SRO 586's 0.25% final-tax regime is not run through these slabs at all. And whichever category you fall in, staying on FBR's Active Taxpayers List by filing on time — rather than becoming a non-filer — cuts the withholding tax rate on your bank transactions, property purchases, and vehicle registration roughly in half; see the Filer vs Non-Filer Calculator for exactly how much that's worth to you.
Common mistakes
The most common error isn't a wrong rate — it's applying the business slab to salary income (or vice versa) because someone assumed "self-employed" and "business individual" mean the same thing to FBR, when the actual test is where more than 75% of your income comes from. The second most common: forgetting that the slab that applied when you started a job in July may not be the slab in force by the time you file the return the following September, if a mid-year Finance Act amendment changed it — always confirm which tax year's rates you're actually filing under.