The tax free salary limit in Pakistan for 2026-27 is Rs 600,000 per year, which is Rs 50,000 per month. If your annual taxable salary stays at or below that figure, you pay zero income tax. The limit was kept unchanged by the Finance Act 2026 and applies from July 1, 2026 to June 30, 2027.
Earn more and only the portion above Rs 600,000 gets taxed, starting at a token 1%. You can check your exact figure in about ten seconds with the free salary tax calculator for Pakistan 2026-27, or follow the worked examples below and do the math by hand.
This year’s slabs are friendlier than last year’s. Rates in the middle bands dropped, and the 9% surcharge on high salaries is gone. The 35% top band now starts at Rs 7,000,000 instead of Rs 4,100,000.
How much salary is tax free in Pakistan?
Rs 600,000 a year. That is the whole answer.
People asking how much salary is tax free in Pakistan usually want the monthly figure, so here it is: Rs 50,000 per month. This is also the minimum taxable salary in Pakistan, meaning income tax only kicks in once your annual taxable salary crosses Rs 600,000.
Crossing the line barely hurts, though. The band from Rs 600,001 to Rs 1,200,000 is taxed at 1% of the amount above Rs 600,000. Someone on Rs 100,000 a month owes Rs 6,000 for the entire year, which is Rs 500 a month (closer to a rounding error than a tax, honestly).
One caveat. The limit applies to taxable salary, not always your gross package. A medical allowance of up to 10% of basic pay, for instance, is exempt when your employer provides no free medical care.
Income tax slabs for salaried persons in 2026-27
The slabs below come from the Finance Act 2026 and cover Tax Year 2027. They apply when salary makes up more than 75% of your taxable income. The system is progressive, so each rate touches only the income inside its own band. Taxation in Pakistan has run on this slab model for decades; only the numbers move each June.
| Annual taxable salary | Tax for 2026-27 |
|---|---|
| Up to Rs 600,000 | 0% |
| Rs 600,001 to Rs 1,200,000 | 1% of the amount over Rs 600,000 |
| Rs 1,200,001 to Rs 2,200,000 | Rs 6,000 + 11% of the amount over Rs 1,200,000 |
| Rs 2,200,001 to Rs 3,200,000 | Rs 116,000 + 20% of the amount over Rs 2,200,000 |
| Rs 3,200,001 to Rs 4,100,000 | Rs 316,000 + 25% of the amount over Rs 3,200,000 |
| Rs 4,100,001 to Rs 5,600,000 | Rs 541,000 + 29% of the amount over Rs 4,100,000 |
| Rs 5,600,001 to Rs 7,000,000 | Rs 976,000 + 32% of the amount over Rs 5,600,000 |
| Above Rs 7,000,000 | Rs 1,424,000 + 35% of the amount over Rs 7,000,000 |
Two changes matter most this year. The 23% and 30% rates fell to 20% and 25%. The old 35% band above Rs 4,100,000 was split into gentler steps, so the top rate now begins at Rs 7,000,000. The 9% surcharge above Rs 10 million was abolished as well, which quietly saves high earners a serious amount.
Worked example: tax on Rs 150,000 per month
Say you earn a taxable Rs 150,000 a month and want to check what your employer should deduct. Five steps.
Step 1. Annualize it: 150,000 x 12 = Rs 1,800,000.
Step 2. Find the slab. Rs 1,800,000 sits in the Rs 1,200,001 to Rs 2,200,000 band.
Step 3. Take the fixed amount for that slab: Rs 6,000.
Step 4. Tax the excess. Rs 1,800,000 minus Rs 1,200,000 is Rs 600,000, and 11% of Rs 600,000 is Rs 66,000.
Step 5. Add the two: Rs 6,000 + Rs 66,000 = Rs 72,000 a year, or Rs 6,000 a month.
This is how FBR tax on salary gets collected. Your employer runs the same estimate under Section 149 of the Income Tax Ordinance and withholds the tax from each payslip, so most salaried people never pay FBR directly. Got a raise in January? The estimate is redone for the months left, which is why deductions sometimes jump mid-year. Our guide to payslip deductions covers the other lines on that slip, because income tax is rarely the only one.
Filer vs non-filer: what actually changes
Here is the part people get wrong in filer vs non-filer salary tax discussions. The slabs above are identical for both. Your employer deducts the same amount either way.
The difference hits everywhere else. Non-filers pay sharply higher withholding on property deals and vehicle registration, sometimes at several times the filer rate. Banks withhold more from their deposit profit too. The Federal Board of Revenue maintains an Active Taxpayer List, and appearing on it is what makes you a filer in practice.
So filing pays for itself even on a modest salary. The return is a short exercise on FBR’s IRIS portal, and every big transaction afterward costs you less.
Monthly tax at common salary levels
Here is the 2026-27 deduction at salary levels people negotiate around, assuming the full amount is taxable salary.
| Monthly salary | Annual tax | Monthly deduction | Effective rate |
|---|---|---|---|
| Rs 50,000 | Rs 0 | Rs 0 | 0% |
| Rs 75,000 | Rs 3,000 | Rs 250 | 0.3% |
| Rs 100,000 | Rs 6,000 | Rs 500 | 0.5% |
| Rs 150,000 | Rs 72,000 | Rs 6,000 | 4% |
| 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% |
Notice the gap between the slab rate and the real burden. On Rs 150,000 a month your top slab is 11%, yet your effective rate is 4%, because the first Rs 1,200,000 is barely taxed at all. If that distinction feels fuzzy, our explainer on marginal vs effective tax rates walks through it with more examples.
This matters at negotiation time. A raise that pushes you into a new slab never leaves you with less take-home pay. Only the rupees inside the new band get charged the higher rate, so take the raise.
Frequently asked questions
How much salary is tax free in Pakistan in 2026-27?
Salary up to Rs 600,000 per year, or Rs 50,000 per month, is completely tax free in Pakistan for 2026-27. Above that, only the portion over Rs 600,000 is taxed, starting at 1%. Annual pay of Rs 1,200,000 owes at most Rs 6,000 for the whole year.
Is a Rs 50,000 monthly salary taxable in Pakistan?
No, a Rs 50,000 monthly salary is not taxable in Pakistan for 2026-27. It adds up to Rs 600,000 a year, which sits exactly at the exemption threshold, so income tax due is zero. Other payslip deductions, like provident fund or EOBI, can still reduce your take-home pay.
What are the income tax slabs for salaried persons in 2026-27?
There are eight slabs for salaried persons in 2026-27, running from 0% to 35%. Income up to Rs 600,000 is exempt, the next Rs 600,000 is taxed at 1%, and later bands pay 11%, 20%, 25%, 29% and 32% before the top 35% rate applies above Rs 7,000,000.
Do filers and non-filers pay different tax on salary?
No, salary tax slabs are identical for filers and non-filers, so the monthly deduction from your payslip is the same. Non-filers instead face much higher withholding on property deals, vehicle registration, bank profit and large cash withdrawals. Filing keeps you on the Active Taxpayer List and avoids those extra costs.
How is monthly tax deducted from my salary calculated?
Your employer estimates your full-year taxable salary and works out the annual tax from the FBR slabs. That amount is then divided across the remaining pay periods under Section 149 of the Income Tax Ordinance. If your pay changes mid-year, the estimate is redone and later deductions are adjusted up or down.
Do I need to file a tax return if my salary is below Rs 600,000?
Usually not, because salaried persons must file only once taxable income reaches Rs 600,000 a year. Filing can still be required if you own a car above 1000cc or sizeable urban property. Voluntary filing also puts you on the Active Taxpayer List, which lowers withholding on big transactions.
Slab math is easy to fumble at 11 pm before a salary negotiation. Put your numbers into the free income tax calculator for 2026-27 and you get your monthly deduction and take-home figure in seconds. No signup, no cost.