BarkahSuiteFinance Act 2026 brought new income tax slabs for salaried persons from 1 July 2026 (tax year 2027). Employees want to know how much will be deducted, and employers must deduct the right amount every month. Here are the slabs, worked examples, and how to run payroll tax without mistakes.
Salaried income tax slabs 2026-27
| Annual taxable salary (Rs) | Tax |
|---|---|
| Up to 600,000 | 0 |
| 600,001 – 1,200,000 | 1% of the amount above 600,000 |
| 1,200,001 – 2,200,000 | 6,000 + 11% of the amount above 1,200,000 |
| 2,200,001 – 3,200,000 | 116,000 + 20% of the amount above 2,200,000 |
| 3,200,001 – 4,100,000 | 316,000 + 25% of the amount above 3,200,000 |
| 4,100,001 – 5,600,000 | 541,000 + 29% of the amount above 4,100,000 |
| 5,600,001 – 7,000,000 | 976,000 + 32% of the amount above 5,600,000 |
| Above 7,000,000 | 1,424,000 + 35% of the amount above 7,000,000 |
Worked examples: monthly tax deduction
| Monthly salary | Annual salary | Annual tax | Monthly tax |
|---|---|---|---|
| Rs 50,000 | Rs 600,000 | Rs 0 | Rs 0 |
| Rs 100,000 | Rs 1,200,000 | Rs 6,000 | Rs 500 |
| Rs 150,000 | Rs 1,800,000 | Rs 72,000 | Rs 6,000 |
| Rs 250,000 | Rs 3,000,000 | Rs 276,000 | Rs 23,000 |
| Rs 400,000 | Rs 4,800,000 | Rs 744,000 | Rs 62,000 |
These examples assume the whole salary is taxable and stays the same all year. Real payroll is rarely that simple.
How to calculate salary tax step by step
- Add up the taxable pay for the year: basic, allowances and taxable benefits. Leave out exempt items as allowed by law.
- Find the slab and work out the annual tax.
- Subtract tax already deducted this year (and by a previous employer, if the employee joined mid-year).
- Divide what is left by the months remaining in the tax year. That is this month's deduction.
- Recalculate whenever salary changes, a bonus is paid or arrears are added.
Common payroll tax mistakes
- Same tax every month after a raise. The remaining months must carry the extra tax.
- Bonus taxed alone. A bonus pushes annual income up, so tax must be re-projected for the year.
- Ignoring the previous employer. New joiners' earlier salary and tax change the slab.
- Late tax certificates. Employees need their deduction certificate to file their return. See our tax return deadline guide.
Let payroll software do the maths
When tax is set up once, payroll software projects the annual tax for every employee, spreads it across the remaining months, adjusts after raises and bonuses, and prints salary slips and tax certificates. BarkahSuite HR & payroll software does this with tax slabs, adjustments and exemptions, and posts salaries and tax straight into accounts. See BarkahHR for attendance, leave, loans, EOBI and final settlement.
Frequently asked questions
What is the tax-free salary limit in Pakistan for 2026-27?
Annual taxable salary up to Rs 600,000 (Rs 50,000 a month) is not taxed in tax year 2027.
How much tax is deducted on a Rs 100,000 monthly salary in 2026-27?
Annual salary is Rs 1,200,000, so tax is 1% of Rs 600,000 = Rs 6,000 a year, or Rs 500 a month, assuming the whole salary is taxable.
How much tax is deducted on a Rs 250,000 monthly salary?
Annual salary is Rs 3,000,000. Tax is Rs 116,000 + 20% of Rs 800,000 = Rs 276,000 a year, or Rs 23,000 a month.
When do the new slabs apply?
From 1 July 2026, for tax year 2027 (1 July 2026 to 30 June 2027).
This article is general information, not tax advice. Slabs are as reported under Finance Act 2026 for tax year 2027; confirm the latest rules, surcharges and exemptions on the FBR website or with your tax advisor.
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