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Two deductions are mandatory for most salaried employees: Income Tax withheld by your employer monthly based on FBR 2025-26 salaried slabs, and EOBI contribution of PKR 370/month. If your company has a provident fund scheme, an additional 8.33% of basic salary is also deducted and matched by the employer. Health insurance premiums and loan repayments may also appear depending on your employer.

The EOBI (Employees' Old-Age Benefits Institution) employee contribution is a fixed PKR 370 per month (1% of the PKR 37,000 minimum wage). Your employer contributes PKR 1,295/month on your behalf. After completing 15 years of contributions and reaching retirement age (60 for men, 55 for women), you qualify for a monthly pension of at least PKR 10,000. The contribution also covers invalidity pension and survivors' benefits.

Yes, HRA is fully taxable in Pakistan as part of gross salary. Unlike India, there is no partial HRA exemption in Pakistani tax law. Your entire gross salary — basic plus all allowances including HRA, medical, and conveyance — is subject to income tax under FBR rules. The only relief is through specific deductions like charitable donations, education fees, and health insurance premiums.

Your employer uses the equal monthly withholding method: they project your total annual salary (monthly gross × 12), calculate the total annual tax using FBR salaried slabs, then divide by 12 to get a monthly deduction. If your salary changes mid-year (increment, bonus, or new allowances), your employer recalculates the annual projection and adjusts future monthly deductions accordingly.

Gross salary is your total package before any deductions — basic salary plus all allowances (HRA, medical, conveyance, etc.). Net salary (take-home pay) is what hits your bank account after deducting income tax and EOBI. Use our Salary Calculator to see the exact difference for your specific package.

For FY 2025-26, PKR 600,000 per year (PKR 50,000 per month) is completely tax-free for salaried employees. If your gross monthly salary is PKR 50,000 or less, you pay zero income tax. Above this threshold, only the amount exceeding PKR 600,000 annually is subject to tax — your entire salary is never taxed at the marginal rate.

Yes, an increment always increases take-home pay — but not by the full increment amount. The additional income may push a portion into a higher tax bracket, so your tax increases slightly. For example, if an increment of PKR 10,000/month pushes PKR 20,000 of your annual income into the 11% bracket, you pay an extra PKR 2,200 in annual tax (PKR 183/month). Net benefit: PKR 9,817/month. A higher bracket never reduces your overall take-home pay.