We know most salaried people pay their taxes regularly, but many don’t know exactly how their tax is calculated. If that’s you, no worries! We’re here to help. Our experts not only offer tax calculation services but also guide you on how to use online tax calculators so you can easily figure out your taxes yourself. Let’s break down the process step-by-step. We will give you information on the latest income tax slabs for salaried individuals straight from the Government of Pakistan 2024-2025 budget.
Using an Online Salary Tax Calculator: It’s Easy!
Calculating your tax with online calculators is super simple. Follow these steps:
- Go to Google: Open your web browser and search for terms like “Tax Calculator Online Pakistan,” “Salary Tax Calculator for Pakistan,” or “Income Tax Calculator Pakistan.” You’ll see a bunch of helpful websites on the first page.
- Choose a Website: Click on any of these websites. You’ll land on a page with an online tax calculator.
- Enter Your Salary: Put your salary into the required field on the calculator.
- Get Your Tax Amount: The calculator will instantly show you how much tax you need to pay based on your salary.
Important Tip: When searching on Google, make sure to include “Pakistan” along with “Tax Calculator.” This will ensure you get the right calculators for Pakistani tax laws, avoiding any confusion.
FBR Income Tax Slabs for Salaried Persons 2024-2025
The government has released the latest tax rules for salaried individuals for the fiscal year 2024-2025. Here’s a breakdown of the income tax slabs and rates that will apply:
- If your taxable salary is Rs. 600,000 or less, you don’t have to pay any income tax (0% tax rate).
- If your taxable salary is more than Rs. 600,000 but less than or equal to Rs. 1,200,000, you’ll pay a 5% tax on the amount that exceeds Rs. 600,000.
- If your taxable salary is more than Rs. 1,200,000 but less than or equal to Rs. 2,200,000, your tax will be Rs. 30,000 plus 15% of the amount exceeding Rs. 1,200,000.
- If your taxable salary is more than Rs. 2,200,000 but less than or equal to Rs. 3,200,000, your tax will be Rs. 180,000 plus 25% of the amount exceeding Rs. 2,200,000.
- If your taxable salary is more than Rs. 3,200,000 but less than or equal to Rs. 4,100,000, your tax will be Rs. 430,000 plus 30% of the amount exceeding Rs. 3,200,000.
- If your taxable salary is more than Rs. 4,100,000, your tax will be Rs. 700,000 plus 35% of the amount exceeding Rs. 4,100,000.
Income Tax Slabs 2024 – 2025
| Taxable Salary Income | Tax Rate (2024-2025) |
|---|---|
| Up to Rs. 600,000 | 0% |
| Rs. 600,001 – Rs. 1,200,000 | 5% of the amount exceeding Rs. 600,000 |
| Rs. 1,200,001 – Rs. 2,200,000 | Rs. 30,000 + 15% of the amount exceeding Rs. 1,200,000 |
| Rs. 2,200,001 – Rs. 3,200,000 | Rs. 180,000 + 25% of the amount exceeding Rs. 2,200,000 |
| Rs. 3,200,001 – Rs. 4,100,000 | Rs. 430,000 + 30% of the amount exceeding Rs. 3,200,000 |
| Above Rs. 4,100,000 | Rs. 700,000 + 35% of the amount exceeding Rs. 4,100,000 |
Key Changes in Income Tax Rates (2024-2025 vs. 2023-2024)
The fiscal year 2024-2025 has introduced notable adjustments to the income tax structure for salaried individuals in Pakistan. While the tax-free threshold remains at Rs. 600,000 annually, several brackets have witnessed significant shifts.
Notable Changes
- Increased tax rate for lower-income earners: The tax rate for incomes between Rs. 600,001 and Rs. 1,200,000 has doubled from 2.5% in 2023-2024 to 5% in 2024-2025.
- Tax rate adjustments in middle-income brackets: The tax rates for income brackets between Rs. 1,200,001 and Rs. 4,100,000 have seen moderate increases, with the 12.5% bracket in 2023-2024 now being taxed at 15% in 2024-2025 and so forth.
- Consolidation of higher income brackets: The previous multiple tax brackets for higher incomes have been consolidated into a single bracket for incomes exceeding Rs. 4,100,000, taxed at a flat rate of 35%.
Overall Impact
This means that salaried individuals in Pakistan will likely see a higher tax deduction from their salaries in 2024-2025 compared to the previous year. The simplification of the tax structure for higher incomes may offer some relief to this segment, but the overall tax burden has increased across the board.
Income Tax Rate for Salaried People (2023-2024)
The new budget for 2023-2024 has brought some changes in how much tax you’ll pay on your salary. Here’s a simple breakdown of the income tax slabs and rates for this year so that you know your exact tax deduction on salary in Pakistan in the year 2023-2024:
- No Tax Up to Rs. 50,000: If your taxable salary is Rs. 50,000 or less per month, you won’t have to pay any income tax.
- 2.5% Tax on Income Above Rs. 50,000: If your monthly taxable salary is between Rs. 50,001 and Rs. 100,000, you’ll pay a 2.5% tax on the amount that’s more than Rs. 50,000.
- 12.5% Tax on Income Above Rs. 1,200,000 (Yearly): If your yearly taxable salary is between Rs. 1,200,001 and Rs. 2,400,000, you’ll pay Rs. 15,000 plus 12.5% tax on the amount exceeding Rs. 1,200,000.
- 20% Tax on Income Above Rs. 2,400,000 (Yearly): If your yearly taxable salary is between Rs. 2,400,001 and Rs. 3,600,000, you’ll pay Rs. 165,000 plus 20% tax on the amount exceeding Rs. 2,400,000.
- 25% Tax on Income Above Rs. 3,600,000 (Yearly): If your yearly taxable salary is between Rs. 3,600,001 and Rs. 6,000,000, you’ll pay Rs. 405,000 plus 25% tax on the amount exceeding Rs. 3,600,000.
- 32.5% Tax on Income Above Rs. 6,000,000 (Yearly): If your yearly taxable salary is between Rs. 6,000,001 and Rs. 12,000,000, you’ll pay Rs. 1,005,000 plus 32.5% tax on the amount exceeding Rs. 6,000,000.
- 35% Tax on Income Above Rs. 12,000,000 (Yearly): If your yearly taxable salary is more than Rs. 12,000,000, you’ll pay Rs. 2,955,000 plus 35% tax on the amount exceeding Rs. 12,000,000.
Income Tax Slabs 2023-2024
| Income Slab | Tax Rate (2023-2024) |
|---|---|
| Up to Rs. 50,000 | 0% |
| Rs. 50,001 – Rs. 100,000 (Monthly) | 2.5% on the amount exceeding Rs. 50,000 |
| Rs. 1,200,001 – Rs. 2,400,000 (Yearly) | Rs. 15,000 + 12.5% on the amount exceeding Rs. 1,200,000 |
| Rs. 2,400,001 – Rs. 3,600,000 (Yearly) | Rs. 165,000 + 20% on the amount exceeding Rs. 2,400,000 |
| Rs. 3,600,001 – Rs. 6,000,000 (Yearly) | Rs. 405,000 + 25% on the amount exceeding Rs. 3,600,000 |
| Rs. 6,000,001 – Rs. 12,000,000 (Yearly) | Rs. 1,005,000 + 32.5% on the amount exceeding Rs. 6,000,000 |
| Above Rs. 12,000,000 (Yearly) | Rs. 2,955,000 + 35% on the amount exceeding Rs. 12,000,000 |
Old Income Tax Percentage (July 2021 to June 2022)
Let’s take a look back at the income tax rates that were in effect from July 2021 to June 2022.
- No Tax Up to Rs. 600,000: If your yearly taxable income was Rs. 600,000 or less, you didn’t have to pay any income tax.
- 5% Tax on Income Above Rs. 600,000: For incomes between Rs. 600,001 and Rs. 1,200,000 per year, a 5% tax was applied to the amount exceeding Rs. 600,000.
- 10% Tax on Income Above Rs. 1,200,000: If your income was between Rs. 1,200,001 and Rs. 1,800,000, you paid Rs. 30,000 plus 10% tax on the amount over Rs. 1,200,000.
- 15% Tax on Income Above Rs. 1,800,000: For incomes between Rs. 1,800,001 and Rs. 2,500,000, the tax was Rs. 90,000 plus 15% on the amount exceeding Rs. 1,800,000.
- 17.5% Tax on Income Above Rs. 2,500,000: Incomes between Rs. 2,500,001 and Rs. 3,500,000 were taxed at Rs. 195,000 plus 17.5% on the amount over Rs. 2,500,000.
- 20% Tax on Income Above Rs. 3,500,000: If you earned between Rs. 3,500,001 and Rs. 5,000,000, your tax was Rs. 370,000 plus 20% on the excess over Rs. 3,500,000.
- 22.5% Tax on Income Above Rs. 5,000,000: For incomes ranging from Rs. 5,000,001 to Rs. 8,000,000, the tax calculation was Rs. 670,000 plus 22.5% on the amount exceeding Rs. 5,000,000.
- 25% Tax on Income Above Rs. 8,000,000: Incomes between Rs. 8,000,001 and Rs. 12,000,000 were taxed at Rs. 1,345,000 plus 25% on the excess over Rs. 8,000,000.
- 27.5% Tax on Income Above Rs. 12,000,000: Those earning between Rs. 12,000,001 and Rs. 30,000,000 paid Rs. 2,345,000 plus 27.5% on the amount over Rs. 12,000,000.
- 30% Tax on Income Above Rs. 30,000,000: For incomes between Rs. 30,000,001 and Rs. 50,000,000, the tax was Rs. 7,295,000 plus 30% on the excess over Rs. 30,000,000.
- 32.5% Tax on Income Above Rs. 50,000,000: If your income was between Rs. 50,000,001 and Rs. 75,000,000, you paid Rs. 13,295,000 plus 32.5% on the amount exceeding Rs. 50,000,000.
- 35% Tax on Income Above Rs. 75,000,000: For the highest earners with incomes over Rs. 75,000,000, the tax was Rs. 21,420,000 plus 35% on the amount over Rs. 75,000,000.
These were the old tax brackets, and you can always use the tax calculator on the FBR website to figure out your tax liability for any given year. Remember, the government sets a specific tax rate for different income levels.
Old Income Tax Rates (July 2021 to June 2022)
| Taxable Income (Yearly) | Tax Rate (July 2021 to June 2022) |
|---|---|
| Up to Rs. 600,000 | 0% |
| Rs. 600,001 – Rs. 1,200,000 | 5% of the amount exceeding Rs. 600,000 |
| Rs. 1,200,001 – Rs. 1,800,000 | Rs. 30,000 + 10% of the amount exceeding Rs. 1,200,000 |
| Rs. 1,800,001 – Rs. 2,500,000 | Rs. 90,000 + 15% of the amount exceeding Rs. 1,800,000 |
| Rs. 2,500,001 – Rs. 3,500,000 | Rs. 195,000 + 17.5% of the amount exceeding Rs. 2,500,000 |
| Rs. 3,500,001 – Rs. 5,000,000 | Rs. 370,000 + 20% of the amount exceeding Rs. 3,500,000 |
| Rs. 5,000,001 – Rs. 8,000,000 | Rs. 670,000 + 22.5% of the amount exceeding Rs. 5,000,000 |
| Rs. 8,000,001 – Rs. 12,000,000 | Rs. 1,345,000 + 25% of the amount exceeding Rs. 8,000,000 |
| Rs. 12,000,001 – Rs. 30,000,000 | Rs. 2,345,000 + 27.5% of the amount exceeding Rs. 12,000,000 |
| Rs. 30,000,001 – Rs. 50,000,000 | Rs. 7,295,000 + 30% of the amount exceeding Rs. 30,000,000 |
| Rs. 50,000,001 – Rs. 75,000,000 | Rs. 13,295,000 + 32.5% of the amount exceeding Rs. 50,000,000 |
| Above Rs. 75,000,000 | Rs. 21,420,000 + 35% of the amount exceeding Rs. 75,000,000 |
Breaking Down Your Salary in Pakistan
In Pakistan, your total salary, also known as your gross salary, is divided into a few main parts according to the income tax rules. These parts are:
- Basic Salary
- House Rent Allowance (HRA)
- Conveyance Allowance
- Medical and Other Allowances
All these together make up your gross salary. It’s important to remember that income tax is only calculated on your salary, not on any bonuses or other rewards you might get. If you want to quickly figure out how much tax you need to pay, you can use an online tax calculator – just enter your gross salary, and it’ll do the math for you!
Get Your Taxes Sorted with HETCO
At HETCO, we’re here to help you figure out your taxes, no matter what your income situation is. Our experts can assist you with:
- Salaried Individuals: We are designing online salary tax calculators that will make it easy to calculate your taxes, whether you want to do it monthly or yearly. Just tell us your gross salary, and we’ll handle the rest.
- Sole Proprietors and AOPs: For businesses, we offer an FBR Tax Calculator service. We’ll sit down with you, go over your profits and losses, and then calculate your tax liability. You’ll just need to provide us with the relevant financial information, and we’ll give you monthly or yearly tax calculations.
- Individuals and AOPs with Rental Income: We also have an online Rental Tax Calculator to help you figure out the tax on your rental income. Calculate your total rental income (monthly or yearly), and we’ll calculate the tax you owe.
You’re welcome to use our free tax calculator on our website anytime. But if you’re busy or find the calculator a bit confusing, don’t worry! Just get in touch with our team of finance experts. They’re ready to help you out and make your life easier.
Frequently Asked Questions (FAQs)
What is an Income Tax Return in Pakistan?
An income tax return is a form that you fill out and submit to the Federal Board of Revenue (FBR) in Pakistan. It details your income, any applicable deductions, and the tax you owe for a specific tax year (usually July 1st to June 30th).
Why is Income Tax Return important for salaried persons?
Even though your employer deducts tax from your salary every month, filing an income tax return is still crucial. It allows you to:
- Claim any eligible tax deductions or exemptions that you might have missed, potentially reducing your overall tax liability.
- Get a refund if you’ve paid more tax than you actually owe.
- Stay compliant with tax laws and avoid any penalties.
What is Taxable Income in Pakistan?
In simple words, your taxable income is the portion of your salary that the government uses to calculate how much income tax you need to pay.
Here’s how it works:
- Gross Salary: This is your total salary before any deductions. It includes your basic pay, house rent allowance, conveyance allowance, medical allowance, and any other benefits you receive.
- Exempt Allowances: These are specific allowances that the government allows you to deduct from your gross salary. This means you won’t pay tax on these portions. Common examples include a part of your medical allowance, conveyance allowance (up to a certain limit), and children’s education allowance. The exact rules for these exemptions can change, so it’s always good to check the latest FBR guidelines.
So, to find your taxable income, you do this:
Taxable Income = Gross Salary – Exempt Allowances
Once you know your taxable income, you can use the tax slabs for 2024-2025, as described above, to figure out how much tax you owe.