Finance Act 2026 · Tax Year 2027

Income Tax Slabs 2026-27 for Salaried and Business Individuals

The FBR tax slabs that apply to income earned from 1 July 2026 to 30 June 2027, what changed from last year, and how much tax common salaries pay.

By the PK Tax Calc team · Updated · Tax Year 2027 (1 July 2026 – 30 June 2027)

Short answer: for 2026-27, salaried income up to Rs 600,000 a year is tax-free. Above that the rates are 1%, 11%, 20%, 25%, 29%, 32% and 35%. The 35% rate now starts above Rs 7 million (it started at Rs 4.1 million last year), and the surcharge on income above Rs 10 million has been abolished.

Salaried individuals: tax slabs 2026-27

These rates apply if salary is more than 75% of your taxable income. Your employer uses them to work out the tax deducted from your pay each month.

Taxable income per year (Rs)Income tax
Up to 600,0000%
600,001 – 1,200,0001% of amount above Rs 600,000
1,200,001 – 2,200,000Rs 6,000 + 11% of amount above Rs 1,200,000
2,200,001 – 3,200,000Rs 116,000 + 20% of amount above Rs 2,200,000
3,200,001 – 4,100,000Rs 316,000 + 25% of amount above Rs 3,200,000
4,100,001 – 5,600,000Rs 541,000 + 29% of amount above Rs 4,100,000
5,600,001 – 7,000,000Rs 976,000 + 32% of amount above Rs 5,600,000
Above 7,000,000Rs 1,424,000 + 35% of amount above Rs 7,000,000

Business and other non-salaried individuals

If you are self-employed, run a business, earn mainly from rent or professional fees, or your salary is 75% or less of your taxable income, these rates apply. They are unchanged from 2025-26.

Taxable income per year (Rs)Income tax
Up to 600,0000%
600,001 – 1,200,00015% of amount above Rs 600,000
1,200,001 – 1,600,000Rs 90,000 + 20% of amount above Rs 1,200,000
1,600,001 – 3,200,000Rs 170,000 + 30% of amount above Rs 1,600,000
3,200,001 – 5,600,000Rs 650,000 + 40% of amount above Rs 3,200,000
Above 5,600,000Rs 1,610,000 + 45% of amount above Rs 5,600,000

Freelancers exporting IT services through banking channels are usually taxed separately at 0.25% or 1% of receipts — see the freelancer tax calculator.

Tax on common salaries in 2026-27

Monthly tax for the full salary treated as taxable, compared with the 2025-26 slabs. For your own figure, including EOBI and provident fund, use the salary calculator.

Monthly salaryTax per month 2026-27Tax per month 2025-26Monthly saving
Rs 50,000Rs 0Rs 0—
Rs 75,000Rs 250Rs 250—
Rs 100,000Rs 500Rs 500—
Rs 150,000Rs 6,000Rs 6,000—
Rs 200,000Rs 13,000Rs 13,500Rs 500
Rs 300,000Rs 34,667Rs 38,833Rs 4,167
Rs 400,000Rs 62,000Rs 71,750Rs 9,750
Rs 500,000Rs 92,000Rs 106,750Rs 14,750
Rs 750,000Rs 177,000Rs 194,250Rs 17,250
Rs 1,000,000Rs 264,500Rs 307,108Rs 42,608

What changed from 2025-26

The first three salaried bands are unchanged. The relief is for income above Rs 2.2 million a year (about Rs 183,000 a month):

Annual income band2025-26 rate2026-27 rate
Rs 2.2m – 3.2m23%20%
Rs 3.2m – 4.1m30%25%
Rs 4.1m – 5.6m35%29%
Rs 5.6m – 7m35%32% (new band)
Above Rs 7m35%35%
Surcharge above Rs 10m9% of tax (salaried)Abolished

For reference, the full 2025-26 salaried table was:

Taxable income per year (Rs)Income tax
Up to 600,0000%
600,001 – 1,200,0001% of amount above Rs 600,000
1,200,001 – 2,200,000Rs 6,000 + 11% of amount above Rs 1,200,000
2,200,001 – 3,200,000Rs 116,000 + 23% of amount above Rs 2,200,000
3,200,001 – 4,100,000Rs 346,000 + 30% of amount above Rs 3,200,000
Above 4,100,000Rs 616,000 + 35% of amount above Rs 4,100,000

How to read a slab

Each slab has a fixed amount — the tax on all income below that slab — plus a percentage of the income above the slab's starting point. You never pay the top rate on your whole income.

Tax = fixed amount + rate × (annual income − slab starting point)

Example: a yearly salary of Rs 3,000,000 falls in the Rs 2,200,001–3,200,000 slab. Tax = Rs 116,000 + 20% × (3,000,000 − 2,200,000) = Rs 276,000 a year, or Rs 23,000 a month. The step-by-step method, with more examples, is in our salary tax guide.

Tax year vs financial year

FBR names each tax year after the year it ends in. Income earned from 1 July 2026 to 30 June 2027 is Tax Year 2027; the return for it is due by 30 September 2027. The return you may be filing now is for Tax Year 2026 (July 2025 – June 2026), which uses the 2025-26 slabs above. Its deadline has been extended to 15 October 2026.

What the slabs don't cover

  • Bank profit, dividends and prize bond winnings, which are taxed at source at fixed rates (see withholding tax rates).
  • Capital gains on property and securities, which have their own rates.
  • Tax credits (for example for approved donations or pension fund contributions) that reduce the tax you finally owe.
FAQ

Tax slab questions

What are the income tax slabs for 2026-27 in Pakistan?
For salaried individuals in Tax Year 2027: 0% up to Rs 600,000; 1% from Rs 600,001 to 1.2m; 11% to 2.2m; 20% to 3.2m; 25% to 4.1m; 29% to 5.6m; 32% to 7m; and 35% above Rs 7 million — each rate applying only to income inside that band.
Which tax year is 2026-27?
Pakistan's tax year is named after the year in which it ends. The financial year 1 July 2026 to 30 June 2027 is Tax Year 2027, and the return for it is due by 30 September 2027.
Did the business (non-salaried) slabs change in 2026-27?
No. The non-salaried slabs for individuals and AOPs are the same as 2025-26: 0% up to Rs 600,000, then 15%, 20%, 30%, 40% and 45% above Rs 5.6 million.
Is there still a surcharge on high incomes?
Finance Act 2026 abolished the surcharge on individuals with taxable income above Rs 10 million. In 2025-26 salaried individuals paid a 9% surcharge (10% for others) on their tax at that level.
Is a salary of Rs 50,000 a month taxable?
No. Rs 50,000 a month is Rs 600,000 a year, which is exactly the tax-free limit. Tax starts on income above that — Rs 60,000 a month pays Rs 100 a month.

Keep reading

Last reviewed: 3 October 2026

Sources

Estimates for planning only — not tax or religious advice. See our disclaimer, and tell us if you spot an error.