Super Tax (Section 4C) Changes in Budget 2026-27
Budget 2026-27 super tax under Section 4C - thresholds, progressive 1-10% rates, who pays, how it stacks on corporate tax for banking and high earners.
Worked example: Rs 150,000,000 per month
Annual income Rs 1,800,000,000 - here's how it would be taxed both ways under Finance Act 2025.
| Taxable income band | Rate | Income in band | Tax in band |
|---|---|---|---|
| Up to Rs 600,000 | 0% | Rs 600,000 | Rs 0 |
| Rs 600,001 - Rs 1,200,000 | 15% | Rs 600,000 | Rs 90,000 |
| Rs 1,200,001 - Rs 1,600,000 | 20% | Rs 400,000 | Rs 80,000 |
| Rs 1,600,001 - Rs 3,200,000 | 30% | Rs 1,600,000 | Rs 480,000 |
| Rs 3,200,001 - Rs 5,600,000 | 40% | Rs 2,400,000 | Rs 960,000 |
| Above Rs 5,600,000 | 45% | Rs 1,794,400,000 | Rs 807,480,000 |
| Total slab tax | Rs 809,090,000 | ||
What Section 4C super tax is
Section 4C - the super tax on high-earning persons - is a separate charge that sits on top of the regular slab or corporate tax. It was introduced in FA 2022 and has been carried forward, expanded, and rate-adjusted in every budget since. The slabs are: 1% on income PKR 150M to 200M, 2% on 200M to 250M, 3% on 250M to 300M, 4% on 300M to 350M, 6% on 350M to 400M, 8% on 400M to 500M, and 10% on income above PKR 500M. Banking-sector companies historically face the 10% top rate at lower thresholds. For most filers super tax never applies; for high-earning individuals, AOPs, and especially banking companies it is material.
How Budget 2026-27 treats super tax
Budget 2026-27 carried Section 4C forward without dramatic headline changes - the IMF position has been to retain and tighten the high-earner surcharge, and the speech did not announce a rollback. Whether the rate slabs or the threshold are adjusted is worth confirming against the Finance Bill 2026 PDF, but the general direction is continuity. For corporates above PKR 150M and HNW individuals at the same threshold, super tax remains an additional cost layer on top of the standard 29% corporate or slab-based personal rate.
How it stacks with other taxes
Super tax computes on the same taxable income that drives your base income tax. A general company with PKR 250M taxable income pays 29% corporate tax (PKR 72.5M) plus 2% super tax (PKR 5M) = PKR 77.5M total. A salaried individual with PKR 160M would compute slab tax on the new 8-band TY 2026-27 structure plus 1% super tax on the same PKR 160M. There is no double-deduction relief - super tax sits atop the regular tax. Use our Business Tax Calculator with the super-tax toggle enabled to model your scenario.
Who actually pays in practice
Super tax is paid almost entirely by listed companies, banking sector entities, and HNW individuals. The PKR 150M threshold puts it well above ordinary salaried filers, freelancers, SMEs, and retail businesses. For salaried filers earning under PKR 100M annually, Section 4C does not apply. The biggest impact in real terms falls on banks (where Section 4C stacks on a 39% corporate rate to produce a marginal rate near 49%), oil exploration and production majors, and large telcos.
Frequently asked questions
Did super tax (Section 4C) change in Budget 2026-27?
No major headline changes - the structure carries forward from FA 2025. Confirm exact rates and thresholds against the Finance Bill 2026 PDF before filing.
Who has to pay super tax in Pakistan?
Individuals, AOPs, and companies with taxable income above PKR 150 million. Banking companies face the top 10% rate sooner due to sector-specific thresholds.
Does super tax apply to salaried individuals?
Only if salaried income exceeds PKR 150 million annually - rare. For ordinary salaried filers Section 4C is not in play.
How is super tax calculated?
Progressive slabs from 1% (PKR 150-200M) to 10% (above PKR 500M), applied on top of the regular income or corporate tax on the same taxable income.
Where can I model my super tax liability?
Use our Business Tax Calculator and enable the Section 4C super tax toggle. Pick Tax Year 2026-27 for the current-year computation.