FBR Income Tax Slabs & Rules (2026-2027)

FBR Income Tax for Salaried Class (2026-2027)

The Federal Board of Revenue (FBR) taxes salaried individuals progressively. A person is considered a "salaried individual" if their salary constitutes more than 75% of their total taxable income.

Tax Brackets (Annual Income)

For the fiscal year 2026-2027, the following slabs apply:

1. Up to PKR 600,000: 0% (No Tax)
2. PKR 600,001 - PKR 1,200,000: 5% of the amount exceeding PKR 600,000
3. PKR 1,200,001 - PKR 2,200,000: PKR 30,000 + 15% of the amount exceeding PKR 1,200,000
4. PKR 2,200,001 - PKR 3,200,000: PKR 180,000 + 25% of the amount exceeding PKR 2,200,000
5. PKR 3,200,001 - PKR 4,100,000: PKR 430,000 + 30% of the amount exceeding PKR 3,200,000
6. Above PKR 4,100,000: PKR 700,000 + 35% of the amount exceeding PKR 4,100,000

What is Included in Taxable Salary?

• Basic Pay
• House Rent Allowance (HRA)
• Conveyance Allowance
• Medical Allowance (Only the amount exceeding 10% of basic pay)
• Adhoc Relief Allowances
• Bonuses and rewards

Medical Allowance Exemption

Medical Allowance is exempt from income tax up to 10% of the Basic Pay. Any amount received as Medical Allowance that exceeds 10% of the basic pay is added to the total taxable income.

How Employers Deduct Tax

Employers are legally required to estimate an employee's annual taxable income at the start of the tax year, calculate the total annual tax, and deduct it in 12 equal monthly installments.