Pakistan Income Tax Calculator 2025-26 (FBR Slabs)

Pakistan uses a progressive slab system under the First Schedule of the Income Tax Ordinance 2001. The tax due on your income depends on three things: (1) which slab table applies to you - salaried or non-salaried, (2) your taxable income for the year, and (3) whether you owe the 10% surcharge on top of the slab tax. For tax year 2025-26 (income earned 1 July 2025 to 30 June 2026), Finance Act 2025 cut the salaried entry rate from 5% to 1% on the first band above PKR 600,000 - a meaningful saving for filers earning between PKR 600k and PKR 1.2M.

Taxable income is not the same as gross income. You start with everything you received during the year, then subtract exempt allowances (medical allowance up to 10% of basic salary, gratuity within statutory limits, and a handful of others). What's left is taxed at the slab rates. Tax credits under Sections 61 (charitable donations to approved institutions), 62 (life insurance premium / Voluntary Pension Scheme), and 63 (pension fund contributions) reduce the final tax bill, not the taxable base.

The two slab tables diverge sharply above PKR 1.2 million. Salaried slabs were designed to be milder in the middle bands because salary tax is collected monthly through your employer; non-salaried slabs (business income, freelance receipts not under PSEB, AOP share) push higher rates earlier. The engine picks the salaried table when filerType === "salaried" or when your taxable salary exceeds your business income. If your earnings are mixed, run the calculator both ways - the spread tells you which classification is worth defending in your return.

Finance Act 2025 introduced a 10% surcharge on the base slab tax for individuals and AOPs whose taxable income exceeds PKR 10 million. The surcharge is not a new slab - it sits on top of whatever slab tax you already owe. Companies are exempt. The calculator applies it automatically when the threshold is crossed and the filer is not a company.

A common mistake: people apply the surcharge to gross income rather than the computed tax. The correct formula is surcharge = slabTax × 0.10, only when taxableIncome > 10,000,000 and filerType !== "company".

If you're registered with the Pakistan Software Export Board (PSEB) and your foreign-source platform earnings arrive through a Pakistan-based bank, those receipts are taxed at a flat 0.25% as final tax (Section 154A). They are excluded from your slab base entirely - you don't pay slab tax on them again. Without PSEB registration, the same earnings fall into business income and hit the non-salaried slabs, which can be dramatically more expensive once you're past PKR 2.2M.

For most active freelancers earning above PKR 1.5M from foreign clients, PSEB registration pays for itself in the first quarter. Set the "PSEB-registered IT export receipts" field on this calculator to see the spread between the two regimes.