Every July a new tax year begins and the income tax slabs for salaried people may change. This guide sets out the slabs for tax year 2027, shows how to read them, works through an example and explains how your employer turns the yearly figure into a monthly deduction.
Which period do these slabs cover?
Tax year 2027 covers salary earned from 1 July 2026 to 30 June 2027 (often written as 2026–27). The slabs below are for salaried individuals — people whose salary is more than 75% of their taxable income. Business individuals and associations of persons are taxed under a different table.
Salary tax slabs for tax year 2027
| Taxable salary for the year | Income tax |
|---|---|
| Up to Rs 600,000 | No tax |
| Rs 600,001 – Rs 1,200,000 | 1% of the amount above Rs 600,000 |
| Rs 1,200,001 – Rs 2,200,000 | Rs 6,000 + 11% of the amount above Rs 1,200,000 |
| Rs 2,200,001 – Rs 3,200,000 | Rs 116,000 + 20% of the amount above Rs 2,200,000 |
| Rs 3,200,001 – Rs 4,100,000 | Rs 316,000 + 25% of the amount above Rs 3,200,000 |
| Rs 4,100,001 – Rs 5,600,000 | Rs 541,000 + 29% of the amount above Rs 4,100,000 |
| Rs 5,600,001 – Rs 7,000,000 | Rs 976,000 + 32% of the amount above Rs 5,600,000 |
| Above Rs 7,000,000 | Rs 1,424,000 + 35% of the amount above Rs 7,000,000 |
The earlier 9% surcharge on salaried individuals with taxable income above Rs 10 million no longer applies for this tax year.
Source: Finance Act 2026 — Income Tax Ordinance 2001, First Schedule, Part I, Division I (salaried individuals). Please confirm these figures against the Finance Act and FBR's published rates before relying on them.
How to read the table
The system is progressive. Find the row that contains your annual taxable salary. Your tax is the fixed amount in that row plus the percentage applied only to the part of your salary above the row's lower limit.
A common worry is that a raise which pushes you into a higher slab will reduce your take-home pay. It does not: the higher rate applies only to the income above the limit, never to your whole salary.
Worked example: Rs 200,000 per month
- Annual salary: Rs 200,000 × 12 = Rs 2,400,000.
- This falls in the slab Rs 2,200,001 – Rs 3,200,000.
- Tax = Rs 116,000 + 20% of (Rs 2,400,000 − Rs 2,200,000) = Rs 116,000 + Rs 40,000 = Rs 156,000 for the year.
- Monthly deduction: Rs 156,000 ÷ 12 = Rs 13,000 per month.
That is an effective rate of 6.5% of the salary. To work out your own figure, use our Salary Tax Calculator, which shows the slab-by-slab breakdown and also has the rates for earlier tax years.
What counts as taxable salary?
Salary for tax purposes is wider than basic pay. It generally includes:
- basic pay and most allowances, such as house rent, utilities and conveyance;
- bonuses, commissions, overtime and arrears;
- the taxable value of benefits, such as a company car or accommodation.
Some items are exempt or treated differently under the law — for example certain medical benefits, and reductions that have applied to full-time teachers and researchers in some years. These depend on current FBR rules, so check how your employer has treated them.
How your employer deducts tax each month
Your employer estimates your taxable salary for the whole year, calculates the annual tax from the slabs and spreads it over the months. When something changes — an increment, a bonus, or joining or leaving part-way through the year — the estimate is revised and the remaining months are adjusted. This is why the deduction can differ from month to month.
At the end of the year your employer gives you a salary certificate showing the salary paid and the tax deducted. Keep it: you need it for your return.
After the year ends: file your return
Tax deducted by your employer does not file your return for you. Salaried individuals still submit an income tax return and wealth statement through FBR's IRIS portal. For tax year 2027 the standard due date is 30 September 2027, which FBR may extend. In the return you can also claim adjustment of other taxes deducted from you during the year, where the law allows.
If you would like it handled for you, see our income tax return filing service. A tax officer prepares the return from your salary certificate, and it is filed only after you approve it.
