Modified Income Tax Slabs for Salaried Class (2025–26)
In the federal budget 2025–26, the Government of Pakistan has announced new income tax slabs for salaried persons, effective from July 1, 2025. These new tax rates have been introduced to boost national revenue while safeguarding low-income earners from further economic stress.
New Salary Tax Rates 2025–26:
| Yearly Salary Range (PKR) | Tax Paid | Tax Rate |
|---|---|---|
| Up to 600,000 | No Tax | 0% |
| 600,001 – 1,200,000 | 2.5% above 600,000 | 2.5% |
| 1,200,001 – 2,200,000 | 6,000 + 11% on amounts over 1,200,000 | 11% |
| 2,200,001 – 3,200,000 | 116,000 + 23% on amounts over 2,200,000 | 23% |
| 3,200,001 – 4,100,000 | 346,000 + 30% over 3,200,000 | 30% |
| Above 4,100,000 | 616,000 + 35% over 4,100,000 | 35% |
These brackets translate to people on a salary now being subjected to income-tier tax deductions, so the system is more progressive and equitable.
What Does the New Tax System Mean for You?
Knowing how these new rates affect your take-home pay is important.
Breakdown of Monthly Income Tax:
- Monthly Salary up to PKR 50,000 – Nothing at all
- PKR 50,000 – 100,000 – Very little tax
- Above PKR 200,000 – Greater tax than last year
Example Calculation:
If you are making PKR 200,000/month, then your annual salary is PKR 2.4 million. Under the new format, your annual tax would be around PKR 125,000.
This implies, after the new salary tax budget, your monthly tax deduction will be more than PKR 10,000, which is significant for budget planning.
Why the Salary Tax Budget Was Changed
The reasons for this revision, according to finance ministry officials, are:
- To make the tax system progressive by taxing more from higher-income earners
- To leave essential items (food, fuel, electricity) untouched by tax
- To improve tax compliance from the salaried class
- To raise revenue for development without constraining the poor
It’s a transition from indirect taxation (such as sales tax) to direct taxation, which is more equitable and economically sustainable.
When Will These Changes Take Effect?
The new tax slabs will come into effect from July 1, 2025, for the whole fiscal year 2025–26. All monthly salary earners in Pakistan will be taxed under these new slabs.
Public Reaction to the 2025–26 Salary Tax Budget
The public reaction is divided:
- Low-income earners are pleased with the zero-tax band
- Middle-income professionals consider the rise acceptable
- High-income earners are worried about steep deductions
Experts are of the opinion that such reforms can stabilize inflation, enhance revenue collection, and curb fiscal deficit if the same are carried out in a mannered fashion.
How to Use a Salary Tax Calculator in Pakistan
If you would like to know instantly how much tax you will pay, here’s what you should do:
Steps:
- Search for “salary tax calculator Pakistan 2025”
- Enter your monthly or annual salary
- Allow the tool to compute your annual income tax
- Budget your monthly budget accordingly
These calculators are periodically updated with budget changes and assist people in remaining financially organized.
Final Thoughts
The 2025–26 salary tax budget introduces significant alterations that may impact millions of professionals working in Pakistan. By raising the tax rate for higher-income groups, the government endeavors to attain a fairer taxation system without putting the poor in difficulties.
If not already done so, employ a salary tax calculator to realize your new obligations, and budget for the financially healthy year to come. Smart planning today will serve to save tomorrow.
