Two slab tables matter to you right now, and they are not the same table. The one that governs the return you have to file by 30 September 2026 is the table for tax year 2026. The one that governs the tax your employer is deducting from your pay this month is the table for tax year 2027. Almost every argument we have with clients in September starts with someone reading the wrong one.
This page puts both side by side, explains how a slab actually works, and sets out what changed between the two years. Everything here is referred back to the Income Tax Ordinance 2001 and the First Schedule to it rather than to a tax card, because tax cards are summaries and summaries go stale. If you would rather hand the whole thing to somebody else, that is our income tax filing service.
What a tax slab actually is
A slab is a band of income with its own rate. The single most expensive misunderstanding in Pakistani personal tax is the belief that crossing into a higher slab applies the higher rate to all of your income. It does not, and the structure of the tables makes that obvious once you know how to read them.
Every row after the first in Division I of Part I of the First Schedule is written the same way: a fixed rupee amount, plus a percentage of the amount by which your taxable income exceeds the floor of that band. The fixed amount is simply the total tax already accumulated across all the bands below. The percentage applies only to the slice of income sitting inside the band you have reached.
The practical consequence is worth stating plainly, because people turn down raises over this. Moving into a higher band raises the tax on the rupees inside that band only. It does not retroactively reprice the rupees below it. A pay rise that pushes you across a slab boundary still leaves you with more money after tax than you had before.
Where the rates actually come from
Income tax is charged by section 4 of the Income Tax Ordinance 2001, and section 4 does not itself contain any numbers. It imposes tax on taxable income at the rates specified in Division I of Part I of the First Schedule. That Division is the only authoritative source for a slab figure. Everything else, including the tax cards published by accountancy firms every July and including this page, is a restatement.
Division I contains two separate tables, and knowing which one applies to you is the first decision you make:
- Clause (1) sets the rates for every individual and association of persons except a salaried individual. This is the table for business income, freelance income, rental income and professional practice.
- Clause (2) sets the rates for a salaried individual, which the Division defines as a person whose income chargeable under the head "salary" exceeds seventy five per cent of taxable income.
The salaried table has historically been the gentler of the two at most income levels, which is why the seventy five per cent test is worth doing properly rather than assuming.
Which of the two tables applies to you
Work out your taxable income across all heads, then ask what share of it is salary under section 12. If salary is more than three quarters of the total, you use the salaried table. If it is three quarters or less, you use the other one.
This catches more people than you would expect. A salaried manager with a rented out flat, a salaried engineer doing weekend consultancy, a doctor on a hospital payroll who also runs an evening clinic: in each case the non salary income can be large enough to push them out of the salaried table entirely, and onto rates that were not what their payroll department assumed. If your side income is growing, run the test every year rather than once.
Two related guides go deeper on either side of that line. For the salary side, including how your employer is supposed to compute the deduction and what to do when it is wrong, see how salary is taxed in Pakistan. For the business and freelance side, see tax for freelancers in Pakistan.
Income tax slabs for tax year 2027
Tax year 2027 runs from 1 July 2026 to 30 June 2027. Under section 74(1) of the Ordinance the normal tax year is the twelve month period ending on 30 June, and it takes its name from the calendar year in which that date falls. So the year that began this July is tax year 2027, and its rates were set by the Finance Act 2026.
This is the table your employer is applying to your payslip today, and the one to use if you are budgeting, negotiating a salary, or working out what a bonus will actually be worth to you. It is not the table for the return you are filing this September.
| Taxable income, PKR | Tax payable |
|---|---|
| Up to 600,000 | 0 |
| 600,001 to 1,200,000 | 1 percent of the amount above 600,000 |
| 1,200,001 to 2,200,000 | 6,000 plus 11 percent of the amount above 1,200,000 |
| 2,200,001 to 3,200,000 | 116,000 plus 20 percent of the amount above 2,200,000 |
| 3,200,001 to 4,100,000 | 316,000 plus 25 percent of the amount above 3,200,000 |
| 4,100,001 to 5,600,000 | 541,000 plus 29 percent of the amount above 4,100,000 |
| 5,600,001 to 7,000,000 | 976,000 plus 32 percent of the amount above 5,600,000 |
| Above 7,000,000 | 1,424,000 plus 35 percent of the amount above 7,000,000 |
Division I of Part I of the First Schedule to the Income Tax Ordinance 2001, clause (2), as substituted by the Finance Act 2026. In force from 1 July 2026.
| Taxable income, PKR | Tax payable |
|---|---|
| Up to 600,000 | 0 |
| 600,001 to 1,200,000 | 15 percent of the amount above 600,000 |
| 1,200,001 to 1,600,000 | 90,000 plus 20 percent of the amount above 1,200,000 |
| 1,600,001 to 3,200,000 | 170,000 plus 30 percent of the amount above 1,600,000 |
| 3,200,001 to 5,600,000 | 650,000 plus 40 percent of the amount above 3,200,000 |
| Above 5,600,000 | 1,610,000 plus 45 percent of the amount above 5,600,000 |
Division I of Part I of the First Schedule, clause (1). This table traces to the Finance Act 2024 and was not amended by either the Finance Act 2025 or the Finance Act 2026, so it is the same for both years.
Income tax slabs for tax year 2026
Tax year 2026 ran from 1 July 2025 to 30 June 2026 and closed two months ago. Its rates were set by the Finance Act 2025.
This is the table that matters for compliance right now. The return due on 30 September 2026 is the return for tax year 2026, and it must be computed on tax year 2026 rates. Every year we see returns prepared on the new rates because somebody searched for "income tax slabs" in August and landed on a page about the year that had just started. If the figure you are using came from a budget summary published in June 2026, it is almost certainly the tax year 2027 figure, and it is the wrong one for your return.
| Taxable income, PKR | Tax payable |
|---|---|
| Up to 600,000 | 0 |
| 600,001 to 1,200,000 | 1 percent of the amount above 600,000 |
| 1,200,001 to 2,200,000 | 6,000 plus 11 percent of the amount above 1,200,000 |
| 2,200,001 to 3,200,000 | 116,000 plus 23 percent of the amount above 2,200,000 |
| 3,200,001 to 4,100,000 | 346,000 plus 30 percent of the amount above 3,200,000 |
| Above 4,100,000 | 616,000 plus 35 percent of the amount above 4,100,000 |
Division I of Part I of the First Schedule, clause (2), as it stood under the Finance Act 2025. Applies to the year ended 30 June 2026.
| Taxable income, PKR | Tax payable |
|---|---|
| Up to 600,000 | 0 |
| 600,001 to 1,200,000 | 15 percent of the amount above 600,000 |
| 1,200,001 to 1,600,000 | 90,000 plus 20 percent of the amount above 1,200,000 |
| 1,600,001 to 3,200,000 | 170,000 plus 30 percent of the amount above 1,600,000 |
| 3,200,001 to 5,600,000 | 650,000 plus 40 percent of the amount above 3,200,000 |
| Above 5,600,000 | 1,610,000 plus 45 percent of the amount above 5,600,000 |
Division I of Part I of the First Schedule, clause (1). This table traces to the Finance Act 2024 and was not amended by either the Finance Act 2025 or the Finance Act 2026, so it is the same for both years.
What changed between tax year 2026 and tax year 2027
When you compare the two tables, compare them on five specific axes rather than eyeballing them. These are the things that actually move money:
- The exemption threshold. The income below which no tax is charged at all. If this moves, it moves the position of every taxpayer above it as well, because it shifts the floor of the first taxable band.
- The band boundaries. A band can keep its rate and still cost you more or less, simply by starting or ending somewhere different. Widening a low rate band is a cut even if no percentage changes.
- The marginal rate in each band. The percentage in column three. This is what most coverage reports, and on its own it tells you very little.
- Where the top band begins. The income at which the highest rate starts applying. Raising this floor is a large cut for high earners and no change at all for everybody else.
- The surcharge. Which sits outside the table entirely and is dealt with in the next section. Comparing slab tables while ignoring the surcharge will give you the wrong answer for anyone near the top.
| Annual taxable income | Tax, year 2026 | Tax, year 2027 | Difference |
|---|---|---|---|
| 2,000,000 | 94,000 | 94,000 | No change |
| 3,000,000 | 300,000 | 276,000 | You pay 24,000 less |
| 5,000,000 | 931,000 | 802,000 | You pay 129,000 less |
| 8,000,000 | 1,981,000 | 1,774,000 | You pay 207,000 less |
| 12,000,000 | 3,685,290 | 3,174,000 | You pay 511,290 less |
Computed directly from the two tables above. Figures for salaried individuals only, and they assume no reliefs or credits.
Three things are doing the work here. The middle bands were cut, so the rate on income between 2.2 and 3.2 million fell from 23 to 20 percent and the band above it from 30 to 25 percent. The top band was pushed a long way out, from 4.1 million to 7 million, which is why the saving grows so sharply at higher salaries. And the surcharge on salaried income was taken to nil.
That last point is worth stating carefully, because it is widely reported as the surcharge having been abolished. It was not. The Finance Act 2026 replaced only the proviso covering salaried individuals. A non salaried individual or an association of persons with taxable income above 10 million still pays the surcharge at 10 percent under section 4AB, exactly as before, and the threshold did not move.
Note also that the table for individuals other than salaried did not change at all. The Finance Act 2026 amends Division I only in clause (2), which is the salaried clause. If you run a business rather than draw a salary, nothing in your slab table moved this year.
The surcharge that sits on top of the slabs
This is the part that slab tables do not show you, and it is the single biggest change for high earners this year.
Section 4AB of the Ordinance, inserted by the Finance Act 2024, imposes a surcharge on top of the tax computed from the slab table. It applies to every individual and association of persons at the rate of ten percent of the income tax imposed under Division I of Part I of the First Schedule, where taxable income exceeds ten million rupees. Note carefully what the base is: the surcharge is ten percent of the tax, not ten percent of the income.
The Finance Act 2025 added a proviso giving salaried individuals a lower surcharge rate than everybody else. The Finance Act 2026 went further and removed the salaried surcharge altogether. The proviso to section 4AB now reads that in the case of an individual deriving income chargeable under the head "Salary", no surcharge shall be payable. FBR's own consolidated Ordinance records the change in the footnote to the section: the words setting the salaried surcharge rate were substituted by the Finance Act 2026 with the words "no surcharge shall be payable".
So the position for tax year 2027 is asymmetric, and it is worth being precise about it:
- A salaried individual above ten million rupees of taxable income pays the slab tax and no surcharge.
- A non salaried individual or an association of persons above ten million rupees of taxable income pays the slab tax plus a surcharge of ten percent of that tax.
For anyone sitting near the seventy five per cent salary boundary with income above ten million rupees, this makes the classification question considerably more expensive than it used to be. It is now worth knowing exactly which side of that line you fall on before the year ends, not after.
How to check any slab figure you are given
Slab figures circulate faster than they are corrected, and in Pakistan they circulate particularly fast in June when the Finance Bill is announced but before it is enacted. A number from a budget speech, a Finance Bill, and a Finance Act as passed are three different things, and only the last one is law.
The check takes about five minutes:
- Open FBR's consolidated Income Tax Ordinance 2001, the version stated to be amended up to 30 June 2026.
- Go to the First Schedule, Part I, Division I.
- Read clause (1) for the non salaried table and clause (2) for the salaried table.
- Check the footnotes underneath. FBR prints the superseded text of every substituted table in the footnotes, which is useful for a year on year comparison but is also the single easiest way to copy an out of date figure by mistake. The current table is the one in the body, not the one in the footnote.
That last point deserves emphasis, because it is how a lot of wrong tables end up online. The consolidated Ordinance carries decades of superseded tables in its footnotes, formatted exactly like live ones.
If you want the arithmetic done rather than the schedule read, our salary tax calculator applies the current salaried table for you.
What to do next
If you are salaried, check your payslip deduction against the tax year 2027 salaried table and raise it with payroll now rather than in June, because an under deduction discovered late lands on you in one instalment. If you have non salary income, run the seventy five per cent test before you assume the salaried table applies. If you are filing for tax year 2026, use the tax year 2026 table and get the return in before 30 September, since the cost of missing that date rose sharply this year. We set out what it now costs in the late filing penalty and surcharge guide, and the deadline itself in the return deadline guide.
Have the return prepared properly
AXIOM SQUARE files income tax returns through FBR registered consultants, at a flat PKR 5,000 for salaried individuals. We will tell you which slab table applies to you before we quote, not after.
See income tax filingLast verified: 22 August 2026. Primary sources read directly for this page: the Income Tax Ordinance 2001 as consolidated by the Federal Board of Revenue and stated to be amended up to 30 June 2026, specifically section 4 (tax on taxable income), section 4AB (surcharge) together with the footnotes recording its insertion by the Finance Act 2024 and the substitution of its proviso by the Finance Act 2026, section 74(1) (tax year), and Division I of Part I of the First Schedule including the seventy five per cent salaried individual test. The slab tables themselves are being verified separately against the Finance Act 2026 and the Finance Act 2025 as gazetted, and are not published on this page until that verification is complete. General information, not tax advice. Confirm your own position with your tax consultant.
Common questions
Which slab table applies to the return due in September 2026?
The table for tax year 2026, the year that ran 1 July 2025 to 30 June 2026, with rates set by the Finance Act 2025. The tax year 2027 table is a different one: it governs what your employer is deducting from your pay now.
Does crossing into a higher slab tax all of your income at the higher rate?
No, and this is the single most expensive misunderstanding in Pakistani personal tax. A slab is a band of income with its own rate, and only the income that falls inside that band is taxed at it.
How do you know whether to use the salaried or non salaried table?
Work out your taxable income across all heads, then ask what share of it is salary under section 12. If salary is more than three quarters of the total you use the salaried table. If it is three quarters or less, you use the other one.
Where do the slab rates actually come from?
Section 4 of the Income Tax Ordinance 2001 charges the tax but contains no numbers itself. It imposes tax on taxable income at the rates specified in Division I of Part I of the First Schedule.
What period does tax year 2027 cover?
1 July 2026 to 30 June 2027. Under section 74(1) of the Ordinance the normal tax year is the twelve month period ending on 30 June, and it takes its name from the calendar year in which that date falls.