Salary tax is calculated on your annual taxable income using the slab rates in Division I, Part I of the First Schedule to the Income Tax Ordinance 2001. Your employer withholds it monthly under section 149 and deposits it against your CNIC.

The method is: annualise your gross salary, subtract exempt income and deductible allowances to reach taxable income, find the slab that income falls into, then apply that slab’s fixed amount plus its marginal rate on the excess over the slab’s lower bound. Dividing the annual figure by twelve gives the deduction you should see on your payslip.

Annual taxable income up to Rs. 600,000 — Rs. 50,000 a month — is taxed at zero per cent. This threshold has held steady across all five tax years from 2022-23 to 2026-27.

Earning above it does not make your whole salary taxable. Only the amount above Rs. 600,000 enters the first taxable slab, which is why someone on Rs. 55,000 a month pays only a token amount of tax.

Rs. 200,000 a month is Rs. 2,400,000 a year. Under the Finance Act 2026 slabs for TY 2026-27 that falls in the Rs. 2.2M–Rs. 3.2M band, so the tax is Rs. 116,000 plus 20% of the Rs. 200,000 above Rs. 2.2 million — Rs. 156,000 a year, or Rs. 13,000 a month.

The same salary would have cost Rs. 162,000 under TY 2025-26 and Rs. 230,000 under TY 2024-25. Enter your own figure in the calculator above and switch to comparison mode to see your salary across any of the years from 2014-15.

Section 149 obliges every employer to deduct income tax from salary at source and pay it to the Federal Board of Revenue. It is a withholding mechanism, not a separate tax: the amount withheld is credited against your final liability for the year.

The section also lets your employer take account of other tax credits and adjustable taxes you certify to them, which is why declaring a Voluntary Pension Scheme contribution or Zakat deduction to your payroll team reduces the tax withheld each month rather than only at filing.

You are taxed as a salaried individual when salary makes up more than 75% of your taxable income. Below that threshold you fall under the non-salaried rates, which apply to business income, freelancers, consultants and associations of persons.

The non-salaried curve is far steeper. It starts at 15% on income just above Rs. 600,000 where the salaried rate is 1%, and tops out at 45% against 35% for salaried taxpayers. On a Rs. 3,000,000 income the difference is roughly Rs. 590,000 versus Rs. 276,000.

Not for salary any more. The Finance Act 2026 abolished the section 4AB surcharge on income under the head "salary" with effect from tax year 2026-27, so a salaried taxpayer now faces a flat 35% top marginal rate rather than the 38.15% that the surcharge produced.

It applied for two years before that: the Finance Act 2024 introduced it at 10% for TY 2024-25, and the Finance Act 2025 reduced it to 9% for TY 2025-26, charged on the tax itself where taxable income exceeded Rs. 10,000,000. Select either of those years in the calculator and it is applied automatically. The surcharge does still apply at 10% to non-salaried and business income.

No. The slab rates under section 149 are the same whether or not you appear on the Active Taxpayers List, and your employer withholds the same amount either way.

Filing status changes the withholding tax you pay elsewhere — on property transfers, vehicle registration, banking transactions and dividends, where non-filer rates are substantially higher. Since your salary tax is already deducted, filing a return is how you get on the ATL and avoid those higher rates.

Use tax year 2026-27 if today falls between 1 July 2026 and 30 June 2027 — that is the year currently in force and what your employer should be withholding against under section 149. It is the default year this calculator opens to.

Tax year 2025-26 (1 July 2025 to 30 June 2026) is the year immediately before it. You would look it up when filing a return for that already-closed period, checking whether last year’s withholding matched the correct slabs, or comparing the two years directly. Both are covered in full here, including their own dedicated slab-rate pages.