Pakistan Income Tax Calculator 2025-26: FBR Slabs, Rates & Free Tool for Salaried and Business
As the fiscal year 2025-26 kicks off, Pakistan's taxpayers are navigating the latest updates from the Federal Board of Revenue (FBR). With relief measures in the recent budget targeting low- and middle-income earners, understanding your tax liability has never been more crucial—especially with filing deadlines looming. Whether you're a salaried professional crunching numbers for your paycheck or a business owner calculating profits, our free Pakistan Income Tax Calculator makes it simple.
In this guide, we'll break down the FBR income tax slabs for 2025-26, highlight key changes, and show you how to use our interactive tool for instant estimates. No more guesswork: input your income, select your category (salaried or business), and get a personalized breakdown—including deductions and surcharges. Let's dive in and ensure you're not overpaying.
Quick Tip: Over 20,000 monthly searches for "Pakistan salary tax calculator" prove you're not alone. Use our tool below to see your take-home pay in seconds.
Key FBR Changes for Tax Year 2025-26: Relief for the Masses
The Finance Act 2025 introduced progressive relief, particularly for salaried individuals earning up to PKR 3.2 million annually. Rates in lower slabs have been slashed (e.g., from 5% to 1% for the first bracket), aiming to ease the burden on everyday workers. For businesses and self-employed, while slabs remain steeper, enhanced deductions for digital payments and intangibles offer some breathing room.
- Tax-Free Threshold: Remains at PKR 600,000 for all individuals—no tax if your income is below this.
- Surcharge Update: 9% on income tax for salaried > PKR 10 million; 10% for non-salaried/business.
- New Disallowances: 10% of purchases from non-NTN holders and 50% of large cash sales (over PKR 200,000) without banking are now inadmissible expenses.
- Pension Shift: Pensions up to PKR 10 million are now 0% taxed, with a flat 5% for higher amounts (under age 70).
These tweaks make 2025-26 friendlier, but calculations vary by income type. Salaried folks (where salary >75% of total income) get preferential rates; business income follows a higher progressive scale.
FBR Income Tax Slabs 2025-26 for Salaried Individuals
If your primary income is from employment, use these slabs. They're designed for fairness, with lower rates in the initial brackets to support the working class.
| Annual Taxable Income (PKR) | Tax Rate | Tax Calculation | Cumulative Tax Example (PKR) |
|---|---|---|---|
| Up to 600,000 | 0% | Nil | 0 |
| 600,001 - 1,200,000 | 1% | 1% of amount exceeding 600,000 | 6,000 (at 1.2M) |
| 1,200,001 - 2,200,000 | 11% | 6,000 + 11% of amount exceeding 1,200,000 | 106,000 (at 2.2M) |
| 2,200,001 - 3,200,000 | 23% | 116,000 + 23% of amount exceeding 2,200,000 | 338,000 (at 3.2M) |
| 3,200,001 - 4,100,000 | 30% | 346,000 + 30% of amount exceeding 3,200,000 | 616,000 (at 4.1M) |
| Above 4,100,000 | 35% | 616,000 + 35% of amount exceeding 4,100,000 | Varies (e.g., 1,016,000 at 5M) |
Source: FBR Finance Act 2025 via PwC Tax Summaries. Add 9% surcharge if total income >10M.Example: Earning PKR 1,500,000 annually? Tax = 6,000 + 11% of (1.5M - 1.2M) = 6,000 + 33,000 = PKR 39,000. Take-home after tax: ~PKR 1,461,000.
Income Tax Slabs for Business & Self-Employed (Non-Salaried) 2025-26
For freelancers, shop owners, or AOPs (Associations of Persons), these slabs apply if salary isn't your main gig. Rates kick in higher to account for expense claims, but watch for minimum turnover tax (1% of turnover if lower than slab tax).
| Annual Taxable Income (PKR) | Tax Rate | Tax Calculation | Cumulative Tax Example (PKR) |
|---|---|---|---|
| Up to 600,000 | 0% | Nil | 0 |
| 600,001 - 1,200,000 | 15% | 15% of amount exceeding 600,000 | 90,000 (at 1.2M) |
| 1,200,001 - 2,400,000 | 20% | 90,000 + 20% of amount exceeding 1,200,000 | 210,000 (at 2.4M) |
| 2,400,001 - 3,000,000 | 25% | 330,000 + 25% of amount exceeding 2,400,000 | 480,000 (at 3M) |
| 3,000,001 - 4,000,000 | 30% | 480,000 + 30% of amount exceeding 3,000,000 | 780,000 (at 4M) |
| Above 4,000,000 | 35% | 900,000 + 35% of amount exceeding 4,000,000 | Varies (e.g., 1,200,000 at 5M) |
Source: FBR via PwC. 10% surcharge >10M; AOPs cap at 40% max for pros like lawyers.Example: Business profit of PKR 2,000,000? Tax = 90,000 + 20% of (2M - 1.2M) = 90,000 + 160,000 = PKR 250,000.
How to Use Our Free Income Tax Calculator 2025-26
Ready to crunch your numbers? Our tool at TaxWizard.pk is FBR-compliant and updated for 2025-26. Here's the step-by-step:
- Select Category: Choose "Salaried" or "Business/Self-Employed".
- Enter Income: Input gross annual income (pre-deductions).
- Add Deductions: Factor in exemptions like Zakat (2.5%), medical (up to PKR 25,000), education allowance (up to 20% of basic pay, max PKR 50,000), or business expenses (e.g., amortization over 15 years for intangibles).
- Review Breakdown: Get slab-wise tax, total liability, and net income. Export as PDF for your records.
- Check Surcharge: Auto-applies if >PKR 10M.
Pro Tip: For mixed income (salary + business), aggregate under the dominant category—consult FBR Iris for edge cases.
[Calculator Demo: Try PKR 1,200,000 salaried – Tax: PKR 6,000]
Top Deductions & Tax-Saving Tips for 2025-26
Maximize savings with these FBR-approved strategies:
- Salaried Perks: Claim full exemption on house rent allowance (up to 50% of basic pay), conveyance (PKR 50,000), and LPR (up to 1/3 of basic).
- Business Boosts: Deduct digital transaction costs fully; new 1% final tax on e-commerce sales (if registered).
- Invest Smart: Tax credit on house loans (up to PKR 2M principal) or shares (via voluntary pension funds).
- Avoid Pitfalls: File by September 30, 2026, to dodge 0.1% monthly penalties. Use banking for sales >PKR 200k to claim 100% expenses.
- For Freelancers: IT exports enjoy 0.25% withholding—register on PSEB for rebates.
Internal links: See our full guide
FAQs: Common Questions on Pakistan Tax 2025-26
Q: What's the tax on a PKR 800,000 salary? A: 1% of (800k - 600k) = PKR 2,000. Use our calculator for precision.
Q: How do business slabs differ from salaried? A: Steeper rates (15% starts at 600k vs. 1%), but more deduction flexibility.
Q: Is there super tax for individuals? A: Yes, reduced to 9%/10% surcharge >PKR 10M; higher for corps (up to 4% on massive incomes).
Q: When is the last date to file? A: September 30, 2026, for salaried; extensions possible via Iris.
Q: Can I carry forward losses? A: Business losses yes (up to 6 years), but not against property income anymore.
Ready to Calculate? Start Now & Stay Compliant
Don't let tax season sneak up—use our Pakistan Income Tax Calculator 2025-26 today. It's free, fast, and tailored for both salaried pros and business hustlers. Subscribe for monthly FBR updates, and follow us for more guides.
Disclaimer: This is for informational purposes; consult a tax advisor for personalized advice. Rates per Finance Act 2025.