Salaried Income Tax Slabs for Tax Year 2027
These are the slabs that apply to salary income earned between 1 July 2026 and 30 June 2027, which is tax year 2027.
The slabs
| Annual taxable salary | Tax |
|---|---|
| Up to Rs 600,000 | Nil |
| Rs 600,001 to Rs 1,200,000 | 1% of the amount above Rs 600,000 |
| Rs 1,200,001 to Rs 2,200,000 | Rs 6,000 plus 11% of the amount above Rs 1,200,000 |
| Rs 2,200,001 to Rs 3,200,000 | Rs 116,000 plus 20% of the amount above Rs 2,200,000 |
| Rs 3,200,001 to Rs 4,100,000 | Rs 316,000 plus 25% of the amount above Rs 3,200,000 |
| Rs 4,100,001 to Rs 5,600,000 | Rs 541,000 plus 29% of the amount above Rs 4,100,000 |
| Rs 5,600,001 to Rs 7,000,000 | Rs 976,000 plus 32% of the amount above Rs 5,600,000 |
| Above Rs 7,000,000 | Rs 1,424,000 plus 35% of the amount above Rs 7,000,000 |
How to read a slab
The rate in your slab applies only to the part of your income inside that slab, not to all of it. This is the single most common misunderstanding about income tax in Pakistan. Moving into a higher slab does not re-tax the money below it.
A worked example
Take a salary of Rs 3,000,000 a year. That falls in the fourth slab, so the tax is Rs 116,000 plus 20% of the amount above Rs 2,200,000.
20% of Rs 800,000 is Rs 160,000. Add the fixed Rs 116,000 and the tax for the year is Rs 276,000, which is Rs 23,000 a month. That is an effective rate of 9.2% on the whole salary, even though the top slab you touched was 20%.
You can check any figure with our income tax calculator, which covers every tax year from 2019 to 2027 and shows the slab by slab working.
The surcharge on high salaries
For tax years 2025 and 2026 there was an extra surcharge under section 4AB on individuals whose taxable income passed Rs 10 million, charged on the tax rather than on the income. That surcharge was withdrawn with effect from 1 July 2026, so it does not apply to tax year 2027.
If you are filing for an earlier year, it may still apply to you. We cover how it worked, and the odd effect it had just above the threshold, in a separate article.
What you actually pay, across the range
Slab tables are hard to read as a person rather than as a rule. This is the same schedule expressed as what it costs at a series of salaries, next to what the same salary would have cost under the tax year 2026 rates.
| Annual salary | TY2027 tax | Effective rate | TY2026 tax | You save |
|---|---|---|---|---|
| Rs 600,000 | Nil | 0% | Nil | — |
| Rs 1,200,000 | Rs 6,000 | 0.5% | Rs 6,000 | — |
| Rs 1,800,000 | Rs 72,000 | 4.0% | Rs 72,000 | — |
| Rs 2,400,000 | Rs 156,000 | 6.5% | Rs 162,000 | Rs 6,000 |
| Rs 3,000,000 | Rs 276,000 | 9.2% | Rs 300,000 | Rs 24,000 |
| Rs 4,000,000 | Rs 516,000 | 12.9% | Rs 586,000 | Rs 70,000 |
| Rs 5,000,000 | Rs 802,000 | 16.0% | Rs 931,000 | Rs 129,000 |
| Rs 6,000,000 | Rs 1,104,000 | 18.4% | Rs 1,281,000 | Rs 177,000 |
| Rs 8,000,000 | Rs 1,774,000 | 22.2% | Rs 1,981,000 | Rs 207,000 |
Two things stand out. The effective rate is always well below the slab rate — someone on Rs 4,000,000 sits in a 25% band and pays 12.9% of their salary. And nothing changed below Rs 2.2 million: the first three slabs were left alone, so if you earn under that figure this Finance Act did not alter your income tax at all.
Above that the saving grows faster than the rate cuts suggest, because the bands are marginal and someone on a higher salary benefits from every reduction below them, not only the one covering their top rupee.
Taxable salary is not the same as gross salary
The slabs apply to taxable salary, and the figure on your offer letter is not automatically that number. Allowances, benefits and any exempt components are treated under their own rules, and deductions and credits you are entitled to come off before the slabs are applied.
For most salaried people the gap is small and the gross figure is a reasonable proxy. It stops being a reasonable proxy once a meaningful part of your package is something other than cash salary. If yours is, the number to put into a calculator is the taxable figure from your salary certificate, not the headline one.
Common questions
Do these rates apply to the return I am filing now?
Probably not. Tax year 2027 covers income earned from 1 July 2026 to 30 June 2027. The return due on 30 September 2026 is for tax year 2026 and uses the older schedule. Switch years in the calculator to see the one you need.
If I get a raise into the next slab, could I take home less?
Not from the slabs. They are marginal, so only the money above the line is taxed at the higher rate. The one place Pakistani income tax did produce that result was the section 4AB surcharge, which is covered separately — and it no longer applies to salaried income.
My employer is still deducting the old amount. What do I do?
Raise it with payroll. Rate changes take effect on 1 July but payroll tables are updated by people. Over-deduction is credited against your liability when you file and refunded if it exceeds what you owe, so it is recoverable — but only by filing a return.
Are these the rates for business income too?
No. This is the salaried individual schedule. Non-salaried individuals and associations of persons are taxed on a different rate schedule.
Last updated: 5 September 2026 · Tax year: TY2027 (FY 2026-27)
Sources
- Finance Act 2026, salaried individual rate schedule effective 1 July 2026
- FBR, income tax basics and rate information, Federal Board of Revenue (fbr.gov.pk)
- PwC Tax Summaries, Pakistan individual taxes on personal income
- Professional firm commentary on the Finance Act 2026 rate schedule, accessed 28 July 2026
This article gives general information about tax in Pakistan. It is not advice on your own situation. Rules and rates change, sometimes in the middle of a year. Before you act on anything here, check the current position with the FBR or a registered tax practitioner.
