Salary tax calculation FY2025 vs FY2026: Explained

Salary Tax Calculation Fy2025 Vs Fy2026 Explained

ISLAMABAD – The federal government has announced a notable reduction in income tax for the salaried class, set to take effect from July 2025 in news fiscal year 2026.

The revised tax structure will provide relief to millions of wage earners across various income brackets, with monthly savings ranging from Rs2,000 to over Rs16,000.

The new tax policy outlines lower annual and monthly tax obligations for individuals earning taxable salaries from Rs50,000 to Rs3,000,000 per month. The move is being welcomed as a much-needed measure to ease financial pressure amid ongoing inflation and economic uncertainty.

Lower Income Brackets Benefit Significantly

Individuals earning Rs100,000 per month will now pay only Rs6,000 annually in taxes in FY2025-26, compared to Rs30,000 in FY2024-2025—a monthly reduction of PKR 2,000.

Similarly, those earning Rs150,000 per month will see their monthly tax drop from Rs10,000 in FY2024-25 to Rs6,000 in FY2025-26.

Middle-Income Relief

Salaried individuals earning Rs300,000 per month will now pay Rs38,833 in monthly tax in FY2025-26, down from Rs45,833 in FY2024-25.

For those earning PKR 600,000 per month, the monthly tax falls from Rs113,750 to Rs106,750 in upcoming fiscal year.

Tax High-Income Earners

Professionals with a Rs1 million monthly salary will benefit from a Rs7,000 monthly reduction, while top earners with Rs3 million per month will see a drop of Rs16,888.

According to government officials, the new tax regime aims to stimulate economic growth by increasing disposable income for salaried individuals, which in turn is expected to boost consumer spending and investment.

The 2026 tax reform is being perceived as a major step toward addressing the growing concerns of the salaried middle class, which has long expressed dissatisfaction with rising living costs and static incomes.

Read the Complete Table Below

Salary Tax Calculation (2025 vs 2026) – Amount in PKR
Monthly Taxable Salary Annual Salary Total Tax 2025 Total Tax 2026 Monthly Tax 2025 Monthly Tax 2026 Decrease per Month
50,000 600,000 – – 2,500 500 (2,000)
100,000 1,200,000 30,000 6,000 2,500 500 (2,000)
150,000 1,800,000 120,000 72,000 10,000 6,000 (4,000)
200,000 2,400,000 230,000 162,000 19,167 13,500 (5,667)
225,000 2,700,000 305,000 231,000 25,417 19,250 (6,167)
250,000 3,000,000 380,000 300,000 31,667 25,000 (6,667)
300,000 3,600,000 550,000 466,000 45,833 38,833 (7,000)
350,000 4,200,000 735,000 651,000 61,250 54,250 (7,000)
400,000 4,800,000 942,000 861,000 78,750 71,750 (7,000)
450,000 5,400,000 1,155,000 1,071,000 96,250 89,250 (7,000)
500,000 6,000,000 1,365,000 1,281,000 113,750 106,750 (7,000)
550,000 6,600,000 1,575,000 1,491,000 131,250 124,250 (7,000)
600,000 7,200,000 1,785,000 1,701,000 148,750 141,750 (7,000)
800,000 9,600,000 2,625,000 2,541,000 218,750 211,750 (7,000)
1,000,000 12,000,000 3,465,000 3,381,000 288,750 281,750 (7,000)
1,500,000 18,000,000 5,961,000 5,881,850 496,750 490,154 (6,596)
2,000,000 24,000,000 8,431,500 8,270,850 702,625 689,238 (13,388)
2,500,000 30,000,000 10,247,500 10,041,850 853,958 836,821 (17,137)
3,000,000 36,000,000 13,051,500 12,848,850 1,087,625 1,070,738 (16,888)

 

Salary Tax Calculation Fy2025 Vs Fy2026 Explained

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