Pakistan Income Tax Changes for FY 2025-26
The 2025-26 federal budget brings modest relief for salaried workers while keeping the zero-tax threshold unchanged.
Salary slabs (effective 1 July 2025)
| Annual taxable salary (PKR) | Tax rate | Quick deduction (PKR) |
|---|---|---|
| 0 - 600,000 | 0% | 0 |
| 600,001 - 1,200,000 | 1% of amount over 600,000 | 0 |
| 1,200,001 - 2,200,000 | 11% of amount over 1,200,000 + 6,000 | 6,000 |
| 2,200,001 - 3,200,000 | 23% of amount over 2,200,000 + 116,000 | 116,000 |
| 3,200,001 - 4,100,000 | 30% of amount over 3,200,000 + 346,000 | 346,000 |
| Above 4,100,000 | 35% of amount over 4,100,000 + 616,000 | 616,000 |
Key takeaways
- Rates in the 0.6 m to 3.2 m brackets drop between 2% and 4%.
- High-income surcharge reduced to 9% for salaries above 10 m.
- No change for incomes below 600,000, so low earners remain exempt.
Employers should update payroll tables before July, and individuals may need to adjust advance tax payments to stay in sync with the new structure.
Sources: FBR Salient Features, Federal Budget Speech 2025-26, PwC Tax Memo 2025.