Pakistan Income Tax Calculator 2026
FBR Latest Tax Slabs for Salary, Freelancers & Business
Tax Calculation Result
FBR Income Tax Slabs 2025-26 for Salaried Persons
As per Finance Act 2025, these are the latest income tax rates for salary individuals in Pakistan. Tax year 2026 means income from 1 July 2025 to 30 June 2026.
| Annual Taxable Income | Tax Rate |
|---|---|
| Up to 600,000 | 0% |
| 600,001 to 1,200,000 | 5% of amount exceeding 600,000 |
| 1,200,001 to 2,400,000 | 30,000 + 15% of excess |
| 2,400,001 to 3,600,000 | 210,000 + 25% of excess |
| 3,600,001 to 6,000,000 | 510,000 + 30% of excess |
| Above 6,000,000 | 1,230,000 + 35% of excess |
How to Calculate Salary Tax – Example
If your monthly salary is 150,000 PKR, then annual income = 1,800,000 PKR. This falls in the 3rd slab. Tax = 30,000 + 15% of (1,800,000 – 1,200,000) = 30,000 + 90,000 = 120,000 PKR per year. Monthly deduction = 10,000 PKR.
Freelancer Tax in Pakistan 2026
As per FBR, income from IT services exported outside Pakistan is taxed under Final Tax Regime. Rate is 1% of gross receipts. If you are registered with PSEB, the rate is reduced to 0.25%. This is full and final tax.
5 Legal Ways to Save Tax in Pakistan
- Invest in Mutual Funds: Tax credit up to 20% of taxable income under section 62.
- Life Insurance: Tax credit on premium paid up to 1.5 million.
- Donations: Donate to FBR approved charities for 100% tax credit.
- Pension Fund: Invest in VPS for tax credit up to 20% income.
- PSEB for Freelancers: Register with PSEB to reduce tax from 1% to 0.25%.
Frequently Asked Questions
1. Is tax deducted on 50,000 salary?
No. Annual income up to 600,000 PKR is tax-free. Monthly 50,000 = 600,000 annually. So zero tax.
2. How much tax on 1 lakh salary?
1 Lakh monthly = 12 Lakh annually. Tax = 5% of (12L – 6L) = 30,000 per year. Monthly deduction = 2,500 PKR.
3. Do I need to pay tax on Upwork income?
Yes. If money comes from outside Pakistan, FBR charges 1% final tax. Example: $1000 = $10 tax = 2,800 PKR. With PSEB only $2.5 tax.