Scope
The calculator covers a resident salaried individual with salary income only. It computes the annual income tax on salary under the Finance Act 2026 table for Tax Year 2027 (1 July 2026 to 30 June 2027) and the Employees' Old-Age Benefits Institution (EOBI) contribution. It does not model non-residents, business income, capital gains, other income heads, or the tax credits under sections 61 to 63 of the Income Tax Ordinance, 2001.
Calculation chain
- Annualise the gross monthly salary.
- Apply the First Schedule, Part I, Division I table (Finance Act, 2026). Salary is taxed in full; there is no standard deduction.
- Apply the section 4AB surcharge. The Finance Act, 2026 removed it from Tax Year 2027, so it is zero.
- Divide the annual liability by twelve, because an employer withholds tax at the average rate under section 149.
- Deduct the EOBI employee contribution (1 percent of the minimum wage). Add the EOBI employer contribution (5 percent) to employer cost. Provincial social security, where enabled, is an employer cost.
Filer and non-filer
Salary tax under section 149 is the same whether or not you are on the Active Taxpayer List. The filer/non-filer distinction applies to withholding on other transactions, where a non-filer pays a rate 100 percent higher (doubled) under the Tenth Schedule, Rule 1, and to non-salary income, which uses a separate rate table. Because this calculator covers salary only, filer status does not change its result.
Formulas
Exact decimal arithmetic is used throughout; the annual tax is rounded to the nearest rupee. Let x be the annual taxable income.
- Annual gross = monthly gross × 12.
- Salaried table (Finance Act 2026): 0 up to 600,000; 1% of (x − 600,000) up to 1,200,000; 6,000 + 11% of (x − 1,200,000) up to 2,200,000; 116,000 + 20% of (x − 2,200,000) up to 3,200,000; 316,000 + 25% of (x − 3,200,000) up to 4,100,000; 541,000 + 29% of (x − 4,100,000) up to 5,600,000; 976,000 + 32% of (x − 5,600,000) up to 7,000,000; 1,424,000 + 35% of (x − 7,000,000) above. Salary is taxed in full.
- Table selection: the salaried table applies while the salary exceeds 75% of total taxable income; otherwise the non-salaried table applies (First Schedule, Part I, Division I, clause (1)).
- Surcharge (section 4AB) = 0 for salaried from Tax Year 2027 (the Finance Act 2026 removed the 9% proviso); 10% of the income tax for non-salaried where the taxable income exceeds PKR 10,000,000.
- Monthly withholding = (annual table tax + surcharge) ÷ 12, because an employer withholds at the average rate under section 149(2).
- EOBI: employee = 1% of the minimum wage; employer = 5% of the minimum wage. Provincial social security, where enabled, is 6% of wages and employer-only.
- Annual reconciliation = (tax + surcharge) − tax credits (ss. 61/63); balance at filing = net liability − salary withheld − tax already withheld under other heads.
- Net per month = gross − monthly withholding − EOBI employee (− provincial employee share, normally nil).
Worked example
Monthly gross 1,00,000, resident salaried, EOBI on.
- Annual gross = 1,00,000 × 12 = 12,00,000.
- Salaried table: tax = 1% × (12,00,000 − 6,00,000) = 6,000.
- Surcharge = 0 for Tax Year 2027 (salaried).
- Monthly withholding = 6,000 ÷ 12 = 500.
- EOBI employee = 1% × 40,700 = 407; EOBI employer = 5% × 40,700 = 2,035.
- Net = 1,00,000 − 500 − 407 = 99,093. Employer cost = 1,00,000 + 2,035 = 1,02,035.
Sources
- Finance Act, 2026, Gazette of Pakistan, Extra., 26 June 2026: First Schedule, Part I, Division I (salaried income-tax table); amendment to the section 4AB proviso.
- Income Tax Ordinance, 2001, Federal Board of Revenue: sections 4AB, 149 and the First Schedule.
- Employees' Old-Age Benefits Institution: 5 percent employer and 1 percent employee contribution on the minimum wage, under the EOB Act, 1976.
- Federal Budget 2026-27 (Finance Division): the federal minimum wage was raised to PKR 40,700 per month with effect from 1 July 2026.
- Pakistan Economic Survey 2025-26: corroborates the 5 percent / 1 percent contribution on the minimum wage.
- PESSI and SESSI: 6 percent employer-only provincial social-security contribution.
Validation
The shipped browser engine is checked against an independent Python reference implementation on a persona matrix that covers zero income, every slab boundary, the (removed) surcharge boundary and the EOBI minimum-wage gate. The reference is itself checked against hand-derived vectors from the Finance Act 2026 table. No official Pakistan worked-example calculator was automatable at build time, so the reference is statute-derived rather than oracle-derived; this reduces confidence relative to the German calculator, which is validated against the official BMF oracle, and is recorded as an open item.
Known limitations
- The EOBI minimum wage is set federally and adopted provincially; the calculator defaults to the FY 2026-27 federal rate of PKR 40,700 and exposes it as an editable field so you can set the rate in force for your province.
- Tax credits under sections 61 and 63 and tax already withheld under other heads can be entered as annual amounts; the exact credit depends on documentary evidence your employer or the tax office accepts.
- Provincial social-security contribution is 6 percent of wages, employer-only per the 1965 ordinances; a province-specific wage ceiling is not applied unless recorded.
- The result is decision support, not tax advice. Confirm the figures with a licensed tax professional.