Payslip · Tax Year 2027

Salary Deductions in Pakistan 2026-27: Tax, EOBI and Provident Fund

What comes off a Pakistani payslip, why, and how much — with full worked examples at three salary levels.

By the PK Tax Calc team · Updated · Salaries paid from July 2026 to June 2027

In short: a typical Pakistani payslip has three deductions — income tax (by far the largest above Rs 150,000 a month), a flat EOBI contribution of Rs 400 and, if your employer runs one, provident fund of around 8.33% of basic salary.

Worked examples

Assumptions: basic salary is two-thirds of gross (a common split), medical allowance is 10% of basic and fully tax-free, provident fund is 8.33% of basic, and EOBI applies.

ComponentRs 100,000 / monthRs 200,000 / monthRs 400,000 / month
Gross salaryRs 100,000Rs 200,000Rs 400,000
of which basicRs 66,667Rs 133,333Rs 266,667
Income tax- Rs 433- Rs 10,333- Rs 54,267
EOBI (employee)- Rs 400- Rs 400- Rs 400
Provident fund (8.33% of basic)- Rs 5,553- Rs 11,107- Rs 22,213
Take-homeRs 93,613Rs 178,160Rs 323,120
Deductions as % of gross6.4%10.9%19.2%

Your own split of basic and allowances will differ — enter your payslip figures in the salary calculator for an exact result.

What each deduction is

Income tax

Your employer works out your yearly tax from the 2026-27 salaried slabs and deducts one-twelfth each month (Section 149). It is the only deduction that grows quickly with salary. Medical allowance up to 10% of basic is tax-free, which is why the split between basic and allowances matters.

EOBI

The Employees' Old-Age Benefits Institution runs a pension scheme for private-sector workers. Contributions are worked out on the minimum wage, not your actual pay: 1% from you (Rs 400 a month on a Rs 40,000 minimum wage) and 5% from your employer (Rs 2,000). The amount changes when the minimum wage is revised.

Provident fund

Provident fund isn't required by law for most private employers. Where it exists, the fund rules set the contribution — commonly 8.33% or 10% of basic salary from you, matched by the employer. It is your savings, paid out with profit when you leave or retire.

Provincial social security

PESSI (Punjab), SESSI (Sindh) and similar provincial schemes provide medical and injury benefits to covered workers. Contributions are paid by the employer and are not normally deducted from your salary.

FAQ

Payslip questions

Why is my take-home pay lower than the salary in my offer letter?
Offer letters usually quote gross salary. Income tax, your EOBI share and your provident fund contribution come out before pay reaches your account. At Rs 100,000 a month total deductions are small (around 6–7% with provident fund); at Rs 400,000 a month income tax alone takes around 14% of gross.
Which deductions apply to every salaried employee?
Income tax applies once your taxable salary is above Rs 50,000 a month. EOBI applies to most employees of registered private-sector establishments. Provident fund depends on your employer's fund rules. Provincial social security (PESSI, SESSI) is paid by the employer and isn't normally deducted from your pay.
Does provident fund reduce my income tax?
No. Your own provident fund contribution is paid out of taxable salary. The employer's contribution to a recognised fund is generally exempt up to a limit, and the fund is paid back to you with profit when you leave or retire.

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.