How Salary Tax Works in Pakistan

If you're a salaried employee, your employer is legally required under Section 149 to deduct income tax from your monthly salary based on your estimated annual income, and deposit it to FBR. This is withholding tax — but it does not replace your obligation to file your own annual return.

2025–26 Salary Tax Slabs

Annual Taxable IncomeTax Rate
Up to Rs. 600,0000%
Rs. 600,001 – 1,200,0002.5% of amount exceeding Rs. 600,000
Rs. 1,200,001 – 2,200,000Rs. 15,000 + 12.5% of amount exceeding Rs. 1,200,000
Rs. 2,200,001 – 3,200,000Rs. 140,000 + 22.5% of amount exceeding Rs. 2,200,000
Rs. 3,200,001 – 4,100,000Rs. 365,000 + 27.5% of amount exceeding Rs. 3,200,000
Rs. 4,100,001 – 6,000,000Rs. 612,500 + 32.5% of amount exceeding Rs. 4,100,000
Above Rs. 6,000,000Rs. 1,230,000 + 35% of amount exceeding Rs. 6,000,000

Monthly Salary to Tax Estimate

Monthly Gross SalaryApprox. Annual TaxApprox. Monthly Deduction
Rs. 50,000Rs. 0Rs. 0
Rs. 100,000Rs. 18,000Rs. 1,500
Rs. 150,000Rs. 78,000Rs. 6,500
Rs. 200,000Rs. 168,000Rs. 14,000
Rs. 300,000Rs. 425,000Rs. 35,417
Rs. 500,000Rs. 1,015,000Rs. 84,583

Note: These figures assume basic salary with no other deductible allowances. Actual tax may vary based on house rent allowance, medical allowance treatment, and provident fund structuring within your salary package.

Deductions & Tax Credits for Salaried Persons

  • Zakat — fully deductible from taxable income if paid under the Zakat & Ushr Ordinance
  • Approved pension fund — contributions to a voluntary pension scheme qualify for tax credit
  • House loan profit — profit paid on a loan for construction/purchase of a self-occupied house
  • Charitable donations — donations to FBR-approved institutions qualify for tax credit (capped at 30% of taxable income)
  • Tuition fee credit — for individuals with taxable income below a certain threshold, in limited cases

Why You Still Need to File Even If Tax is Deducted

Filing your own return matters because: (1) it puts you on the Active Taxpayer List for lower WHT rates on other transactions, (2) it lets you claim a refund if your employer over-deducted tax, (3) it lets you declare other income sources (rent, freelance, capital gains) that your employer doesn't know about, and (4) it's a legal requirement for anyone above the taxable threshold — non-filing can result in penalties.

Frequently Asked Questions

Does my employer file my tax return for me?
No. Your employer only deducts tax from your salary and deposits it to FBR (Section 149 withholding). You are still legally required to file your own annual income tax return on IRIS by September 30, declaring your total income and claiming credit for tax already deducted.
Is bonus taxed differently from regular salary?
Bonus is added to your annual taxable salary and taxed at your applicable slab rate — there is no separate flat rate for bonus in Pakistan. However, employers sometimes use an averaging method across the year for withholding purposes, which is reconciled when you file your return.
What deductions can a salaried person claim?
Common deductible items include Zakat paid, approved pension fund contributions, profit on a house loan for self-occupied property, and donations to approved charitable institutions. These reduce your taxable income or qualify for direct tax credits depending on the category.

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