Finance Act 2024 vs 2025 — Pakistan Tax Changes Compared
Finance Act 2024 vs 2025 Pakistan tax changes — salaried entry rate cut from 5% to 1%, new 10% surcharge above PKR 10M, PSEB regime, and slab table comparison TY 2024-25 vs 2025-26.
| Dimension | Finance Act 2024 (TY 2024-25) | Finance Act 2025 (TY 2025-26) |
|---|---|---|
| Salaried entry rate (600k–1.2M) | 5% | 1% |
| Salaried slab 2 (1.2M–2.2M) | 15% + 30,000 | 11% + 6,000 |
| Salaried slab 3 (2.2M–3.2M) | 25% + 180,000 | 23% + 116,000 |
| Salaried slab 4 (3.2M–4.1M) | 30% + 430,000 | 30% + 346,000 |
| Salaried top rate (>4.1M) | 35% + 700,000 | 35% + 616,000 |
| Non-salaried slabs | 0–45% | 0–45% (unchanged) |
| Individual surcharge | None | 10% above PKR 10M taxable income |
| Tax on PKR 1.2M salaried | PKR 30,000 | PKR 6,000 |
| Tax on PKR 3M salaried | PKR 380,000 | PKR 300,000 |
| Tax on PKR 12M salaried | PKR 3.46M | PKR 3.38M + PKR 338k surcharge |
Finance Act 2025 made the most significant change to Pakistan's salaried slab structure since the 2019 reform. The entry rate dropped from 5% to 1% for income between PKR 600,000 and 1.2 million, and the cumulative fixed amounts at higher slabs fell correspondingly. The intent was modest relief for low-to-middle-income salaried filers — a salaried employee earning PKR 100,000/month saves PKR 24,000 per year compared to the FA 2024 regime.
Higher up the slab table, Finance Act 2025 introduced a 10% surcharge on individual and AOP filers whose taxable income exceeds PKR 10 million. The surcharge is on base tax, not income — so a filer with PKR 15M of taxable income pays roughly PKR 4.2M in regular slab tax plus PKR 420k of surcharge. Companies are exempt from the individual surcharge but face Section 4C super tax separately above PKR 150M.
Non-salaried slabs (used by freelancers, sole proprietors, AOPs) were left structurally unchanged from FA 2024 — same 15%-45% progression, same band thresholds. PSEB Section 154A 0.25% final tax remained intact, and the broader withholding tax framework (Section 153 services, Section 150 dividends, Section 151 profit on debt) was preserved with minor rate tweaks at the margins.
Finance Act 2025 delivers modest relief to lower-middle-income salaried filers via the 5% → 1% entry-rate cut, partially offset by a new 10% surcharge on incomes above PKR 10M. Non-salaried and PSEB-registered freelancers see no structural change. Net effect: most salaried filers below PKR 4M save a few thousand to a few tens of thousands of rupees; high earners above PKR 10M see the surcharge eat much of the slab-rate cut.
Frequently asked questions
How much do salaried Pakistanis save under Finance Act 2025?
An employee earning PKR 1.2M annually saves PKR 24,000/year (5% → 1% entry rate). At PKR 3M annual the saving is PKR 80,000. The relief shrinks at higher incomes where the surcharge cancels much of it.
Does the 10% surcharge apply to companies?
No — the 10% individual surcharge under Finance Act 2025 exempts companies. Companies face Section 4C super tax separately, which kicks in above PKR 150M taxable income.
Did non-salaried slabs change in 2025?
No — non-salaried slab rates and band thresholds were left structurally unchanged from Finance Act 2024. PSEB Section 154A 0.25% final tax also unchanged.
When does Finance Act 2025 take effect?
Tax Year 2025-26 (1 July 2025 to 30 June 2026). Individual returns for this year are due by 30 September 2026 on IRIS.