Pakistan Income Tax Slabs 2025-26 — Complete Rate Table for Salaried & Business

Income Tax Slabs for Tax Year 2025-26

Pakistan's income tax rates for individuals are determined by the Finance Act and vary based on whether you are a salaried individual, a non-salaried individual (business person), or an Association of Persons (AOP). The tax year 2025-26 runs from July 1, 2025 to June 30, 2026.

Below are the complete tax slab tables along with calculation examples to help you determine your exact liability.

Salaried Individuals — Tax Slabs 2025-26

These rates apply to individuals whose salary income constitutes more than 75% of their total income:

• Up to PKR 600,000 — 0% (no tax)
• PKR 600,001 to PKR 1,200,000 — 5% of the amount exceeding PKR 600,000
• PKR 1,200,001 to PKR 2,200,000 — PKR 30,000 + 15% of the amount exceeding PKR 1,200,000
• PKR 2,200,001 to PKR 3,200,000 — PKR 180,000 + 25% of the amount exceeding PKR 2,200,000
• PKR 3,200,001 to PKR 4,100,000 — PKR 430,000 + 30% of the amount exceeding PKR 3,200,000
• PKR 4,100,001 and above — PKR 700,000 + 35% of the amount exceeding PKR 4,100,000

Calculation Example — Salaried Individual

Suppose your annual taxable salary is PKR 2,500,000:

1. First PKR 600,000 — tax: PKR 0
2. Next PKR 600,000 (600,001 to 1,200,000) — tax: 5% x 600,000 = PKR 30,000
3. Next PKR 1,000,000 (1,200,001 to 2,200,000) — tax: 15% x 1,000,000 = PKR 150,000
4. Remaining PKR 300,000 (2,200,001 to 2,500,000) — tax: 25% x 300,000 = PKR 75,000

Total tax: PKR 255,000

This works out to an effective tax rate of 10.2% on the total income.

Non-Salaried Individuals (Business) — Tax Slabs 2025-26

These rates apply to individuals whose salary income is 75% or less of their total income (i.e., business owners, self-employed professionals, freelancers):

• Up to PKR 600,000 — 0%
• PKR 600,001 to PKR 1,200,000 — 15% of the amount exceeding PKR 600,000
• PKR 1,200,001 to PKR 1,600,000 — PKR 90,000 + 20% of the amount exceeding PKR 1,200,000
• PKR 1,600,001 to PKR 3,200,000 — PKR 170,000 + 30% of the amount exceeding PKR 1,600,000
• PKR 3,200,001 to PKR 5,600,000 — PKR 650,000 + 40% of the amount exceeding PKR 3,200,000
• PKR 5,600,001 and above — PKR 1,610,000 + 45% of the amount exceeding PKR 5,600,000

Note that non-salaried individuals face higher rates at each bracket compared to salaried persons. This is a deliberate policy to incentivize formal employment and documentation of business income.

Calculation Example — Business Individual

Suppose your annual business income is PKR 2,000,000:

1. First PKR 600,000 — tax: PKR 0
2. Next PKR 600,000 (600,001 to 1,200,000) — tax: 15% x 600,000 = PKR 90,000
3. Remaining PKR 800,000 (1,200,001 to 2,000,000) — tax: 20% x 400,000 + 30% x 400,000 = PKR 200,000

Total tax: PKR 290,000 (effective rate: 14.5%)

Association of Persons (AOPs)

AOPs (partnerships, joint ventures, and unincorporated entities) are taxed at the same rates as non-salaried individuals. However, there are important differences:

• The AOP itself is the taxable entity — not the individual partners
• Profit distribution to partners is not separately taxed (to avoid double taxation)
• If the AOP fails to file a return, each partner may be individually assessed on their share of the AOP income at their applicable individual rates

Companies — Corporate Tax Rate

While this article focuses on individual tax slabs, for completeness:

• Public companies listed on the stock exchange: 29%
• Private companies (not listed): 29%
• Banking companies: 39%
• Small companies (turnover up to PKR 250 million): 20%

Super Tax

A super tax is levied on high-income individuals and companies under Section 4C of the Income Tax Ordinance:

• Individuals with income exceeding PKR 10 million: 10% super tax on the entire income
• Companies in specified sectors (banking, beverages, cement, etc.): Higher super tax rates ranging from 4% to 10% depending on the sector and income level

Super tax is calculated on total income (not just the amount exceeding the threshold), which makes it a significant additional burden for high earners.

Minimum Tax

Under Section 113, a minimum tax of 1.25% of turnover applies where the tax calculated on taxable income is less than 1.25% of the person's gross turnover. This ensures that even businesses showing losses or minimal profits contribute some tax revenue.

How to Calculate Your Tax

Follow these steps:

1. Determine your total income from all sources (salary, business, property, capital gains, other)
2. Claim allowable deductions (zakat, donations to approved institutions, pension fund contributions)
3. Calculate taxable income (total income minus deductions)
4. Apply the relevant slab based on whether you are salaried or non-salaried
5. Subtract tax credits (if applicable) and adjustable withholding taxes
6. Pay the balance or claim a refund

For a quick estimate, use our salary tax calculator guide or contact us for a precise calculation.

Need Help Filing?

Our income tax team can calculate your exact liability, identify all applicable deductions and credits, and file your return through the FBR IRIS portal. Get in touch for a free consultation.