Pakistan income tax calculator 2026-27: Check your salary tax cut

Finance Minister Muhammad Aurangzeb presented the Federal Budget 2026-27 in the National Assembly on Friday, outlining new income tax measures for the salaried class.

Addressing the budget session, the finance czar said that government proposed income tax relief in four slabs for salaried individuals and the abolition of surcharge on the salaried class.

He said that Prime Minister Shehbaz Sharif's government is aware of the difficulties faced by government and private salaried individuals and has decided to provide relief on the instructions of the premier.

For salaried persons earning between Rs2.2 million and Rs3.2 million annually, the applicable marginal tax rate is proposed to be reduced from 23% to 20%. Under the Finance Bill, the proposed tax is Rs116,000 plus 20% of the amount exceeding Rs2.2 million.

For those earning between Rs3.2 million and Rs4.1 million annually, the applicable marginal tax rate is proposed to be reduced from 30% to 25%. The proposed tax is Rs316,000 plus 25% of the amount exceeding Rs3.2 million.

For salaried individuals earning between Rs4.1 million and Rs5.6 million, the applicable marginal tax rate is proposed to be reduced from 35% to 29%. The proposed tax is Rs541,000 plus 29% of the amount exceeding Rs4.1 million.

For those earning between Rs5.6 million and Rs7 million, the applicable marginal tax rate is proposed to be reduced from 35% to 32%. The proposed tax is Rs976,000 plus 32% of the amount exceeding Rs5.6 million.