Income Tax Slabs Rates For Year 2025–26 in Pakistan – for Salaried and Business Individuals
Accurate calculation of income tax as per rules is very important for every individual have income from any source Salary, Business, Property (Rent), Capital Gain, Foreign or Agriculture or any other source in Pakistan. To adjust the tax policies and and increase the revenue government every year changes slabs of income for the tax while maintain the relief to lower-income groups.
In this guide, we will explain the updated income tax rates apply to both salaried and business individuals / association of persons (AOP), provide a clear overview of salary and business tax slab 2025-26. This article will also help you understand the easy way to calculate the tax, to estimate your annual income tax.
Accurate calculation of income tax as per rules is very important for every individual have income from any source Salary, Business, Property (Rent), Capital Gain, Foreign or Agriculture or any other source in Pakistan. To adjust the tax policies and and increase the revenue government every year changes slabs of income for the tax while maintain the relief to lower-income groups.
In this guide, we will explain the updated income tax rates apply to both salaried and business individuals / association of persons (AOP), provide a clear overview of salary and business tax slab 2025-26. This article will also help you understand the easy way to calculate the tax, to estimate your annual income tax.
Concept of Income Tax in Pakistan
Before we discuss the income tax slabs, it is most important to know about the income tax concept.
Income tax is a direct tax imposed by the tax authority of Pakistan called Federal Board of Revenue (FBR) on income through different sources Salary, Business, Property, Capital Gain, Foreign or agriculture income or any from other source. Depending on the annual taxable income, you will calculate the amount of tax you pay and the income tax slab rates defined by the FBR Pakistan.
In Pakistan, progressive tax system is followed, meaning:
- Higher tax rates for the higher income
- Lower for the Lower income group.
- There will be gradual increase in tax rates as income increase.
Income tax slabs are divided into some income brackets, To implement progressive tax system,
Before we discuss the income tax slabs, it is most important to know about the income tax concept.
Income tax is a direct tax imposed by the tax authority of Pakistan called Federal Board of Revenue (FBR) on income through different sources Salary, Business, Property, Capital Gain, Foreign or agriculture income or any from other source. Depending on the annual taxable income, you will calculate the amount of tax you pay and the income tax slab rates defined by the FBR Pakistan.
In Pakistan, progressive tax system is followed, meaning:
- Higher tax rates for the higher income
- Lower for the Lower income group.
- There will be gradual increase in tax rates as income increase.
Income tax slabs are divided into some income brackets, To implement progressive tax system,
Salary income tax slabs 2025–26
The salary income tax slab 2025-26 determines the amount of tax a salaried employees must pay according to their annual income.
Below are the official income tax slab rates for salaried persons published by FBR in Income Tax Ordinance 2001 amended up-to 25th July 2025.
These income tax slab rates explain the amount deducted from salary of an employee every month.
Typically, Employers calculate the amount using a tax slab rates, deduct this tax as withholding tax u/s 149 of the income tax ordinance 2001, and pay the deducted tax to the FBR against the CNIC of the employee. This is the responsibility of every employer paying the salary above Rs. 50,000/- Monthly every month. After Payment computerized payment receipt will be generated by FBR as proof of the successful payment.
As the tax has been deducted from the salary of employee and submitted by the employer to the FBR, Employee doesn’t have to pay any tax while filing his income tax return. He will claim the deducted tax in adjustable taxes and writ off his tax liability.
The salary income tax slab 2025-26 determines the amount of tax a salaried employees must pay according to their annual income.
Below are the official income tax slab rates for salaried persons published by FBR in Income Tax Ordinance 2001 amended up-to 25th July 2025.
These income tax slab rates explain the amount deducted from salary of an employee every month.
Typically, Employers calculate the amount using a tax slab rates, deduct this tax as withholding tax u/s 149 of the income tax ordinance 2001, and pay the deducted tax to the FBR against the CNIC of the employee. This is the responsibility of every employer paying the salary above Rs. 50,000/- Monthly every month. After Payment computerized payment receipt will be generated by FBR as proof of the successful payment.
As the tax has been deducted from the salary of employee and submitted by the employer to the FBR, Employee doesn’t have to pay any tax while filing his income tax return. He will claim the deducted tax in adjustable taxes and writ off his tax liability.
Examples of calculation of tax Using a slabs for Salary Income
First understand procedure to calculate the tax on income from salary using tax slab rates in recent income tax ordinance published by FBR with a simple example.
As Per The First slab, there is no income tax on the salary below amount Rs 600,000/- (also called minimum threshold)
Example 1: If a person earns: Monthly Rs 100,000/- From Salary.
His Annual Salary will be = (Rs. 100,000/- x 12 month in year ) = Rs. 1,200,000/- (considered as taxable income)
This Taxable income Falls in 2nd Slab (Mentioned above) and will be calculated as;
- First Rs. 600,000 → 0% tax
- Amount above Rs. 600,000 → ( 1,200,000 – 600,000) = 600,000/- → 1% tax
Annual tax = Rs. 6,000/-
Monthly deduction from salary = Rs. 500/-
Example 2: If a person earns: Monthly Rs 300,000/- From Salary.
His Annual Salary will be = (Rs. 300,000/- x 12 month in year ) = Rs. 3,600,000/- (considered as taxable income)
This Taxable income Falls in 5th Slab (Mentioned above) and will be calculated as;
- Fixed tax on the amount 3,200,000/-→ Rs 346,000/- tax
- Amount above Rs. 3,200,000 → ( 3,600,000 – 3,200,000) = 400,000/- → 30% tax = Rs 90,000/- tax
Total annual tax = 346,000 + 90,000 = Rs 436,000/-
Monthly deduction from salary = Rs. 36,333.33/-
First understand procedure to calculate the tax on income from salary using tax slab rates in recent income tax ordinance published by FBR with a simple example.
As Per The First slab, there is no income tax on the salary below amount Rs 600,000/- (also called minimum threshold)
Example 1: If a person earns: Monthly Rs 100,000/- From Salary.
His Annual Salary will be = (Rs. 100,000/- x 12 month in year ) = Rs. 1,200,000/- (considered as taxable income)
This Taxable income Falls in 2nd Slab (Mentioned above) and will be calculated as;
- First Rs. 600,000 → 0% tax
- Amount above Rs. 600,000 → ( 1,200,000 – 600,000) = 600,000/- → 1% tax
Annual tax = Rs. 6,000/-
Monthly deduction from salary = Rs. 500/-
Example 2: If a person earns: Monthly Rs 300,000/- From Salary.
His Annual Salary will be = (Rs. 300,000/- x 12 month in year ) = Rs. 3,600,000/- (considered as taxable income)
This Taxable income Falls in 5th Slab (Mentioned above) and will be calculated as;
- Fixed tax on the amount 3,200,000/-→ Rs 346,000/- tax
- Amount above Rs. 3,200,000 → ( 3,600,000 – 3,200,000) = 400,000/- → 30% tax = Rs 90,000/- tax
Total annual tax = 346,000 + 90,000 = Rs 436,000/-
Monthly deduction from salary = Rs. 36,333.33/-
Business Income Tax Slabs 2025–26
Income Tax slab rates for business income are different from the salary but concept of calculation is same.
Below are the income tax slab rates for business income published by FBR in the recent amended income tax ordinance 2001.
Income Tax slab rates for business income are different from the salary but concept of calculation is same.
Below are the income tax slab rates for business income published by FBR in the recent amended income tax ordinance 2001.
Why it matters to Understanding Income Tax Slabs
Knowing the accurate income tax is important for some reasons:
- To estimate the close to the accurate tax deduction from monthly salary.
- It Allows businesses to take financial decision and plan finances properly
- Prevents errors and ensure accuracy during tax return filing
Understanding the income tax concept and effective income tax slab rates ensures that individuals remain updated with changes in the tax law.
Knowing the accurate income tax is important for some reasons:
- To estimate the close to the accurate tax deduction from monthly salary.
- It Allows businesses to take financial decision and plan finances properly
- Prevents errors and ensure accuracy during tax return filing
Understanding the income tax concept and effective income tax slab rates ensures that individuals remain updated with changes in the tax law.
Use of Online Tax Calculators;
Every taxpayer want to know the tax on his income, But Because of lack of knowledge he struggle to calculate the tax. So that, www.qtax.online has developed the online tax calculator for the taxpayers, Accounting and finance Professionals, Lawyers who have daily use it. Using this calculator they can easily calculate the tax and save their time for the important tasks. Use of calculator is very easy, just put your monthly income in the calculator and it will give you monthly and annual resulted income and tax for the relevant year you selected.
Every taxpayer want to know the tax on his income, But Because of lack of knowledge he struggle to calculate the tax. So that, www.qtax.online has developed the online tax calculator for the taxpayers, Accounting and finance Professionals, Lawyers who have daily use it. Using this calculator they can easily calculate the tax and save their time for the important tasks. Use of calculator is very easy, just put your monthly income in the calculator and it will give you monthly and annual resulted income and tax for the relevant year you selected.
