💼 Salary Calculator
Your Salary Details
Monthly Take-Home Salary
Salary Breakdown
| Gross Monthly Salary | PKR 0 |
| Annual Gross Salary | PKR 0 |
| Income Tax (Monthly) | PKR 0 |
| EOBI Deduction | PKR 370 |
| Total Deductions | PKR 0 |
| Net Take-Home (Monthly) | PKR 0 |
How to Use the Salary Calculator
Understanding your take-home pay in Pakistan requires accounting for several deductions beyond just income tax. This calculator gives you the complete picture — from your gross salary package down to the net amount that actually reaches your bank account every month.
Enter your basic salary, HRA, medical allowance, and other allowances. The calculator applies Budget 2026-27 salaried tax slabs (new reduced rates, super tax abolished) to your total gross income and deducts all statutory contributions to show your exact monthly take-home salary.
House Rent, Medical, and all other allowances calculated
Employee Old-Age Benefits Institution — PKR 370/month
Your actual monthly earnings after all deductions
📖 Complete Guide to Salary & Take-Home Pay in Pakistan — Budget 2026-27
How is Your Salary Taxed in Pakistan?
In Pakistan, salaried employees are taxed under a progressive slab system — meaning different portions of your income are taxed at different rates. Your employer is legally required to deduct withholding income tax from your salary every month and deposit it with FBR. The monthly deduction is calculated by estimating your annual tax liability and dividing it by 12. Budget 2026-27 introduced significant relief: multiple brackets reduced, super tax completely abolished.
Income Tax Slabs for Salaried Persons — FY 2026-27
| Annual Income (PKR) | Tax Rate | Monthly Deduction on Bracket |
|---|---|---|
| Up to 600,000 | 0% | NIL |
| 600,001 – 1,200,000 | 1% | Up to PKR 500/month |
| 1,200,001 – 2,200,000 | 11% | Up to PKR 9,167/month |
| 2,200,001 – 3,200,000 | 20% (was 23%) | Up to PKR 16,667/month |
| 3,200,001 – 4,100,000 | 25% (was 30%) | Up to PKR 18,750/month |
| 4,100,001 – 5,600,000 | 29% (was 35%) | Up to PKR 36,250/month |
| 5,600,001 – 7,000,000 | 32% (was 35%) | Up to PKR 37,333/month |
| Above 7,000,000 | 35% | 35% on excess |
Super Tax on salaried earners: Abolished in Budget 2026-27 (was 6% on higher incomes in 2025-26).
What Components Make Up Your Total Salary Package?
Pakistani salary packages typically consist of multiple components. Understanding each one matters because they are taxed differently:
| Component | Taxable? | Notes |
|---|---|---|
| Basic Salary | ✅ Fully taxable | Core component — forms basis for other allowances |
| House Rent Allowance (HRA) | ✅ Taxable | Some employers pay 45–50% of basic as HRA |
| Medical Allowance | ✅ Taxable (if cash) | Actual medical reimbursements against bills are exempt up to limits |
| Conveyance Allowance | ✅ Taxable (if cash) | Company vehicle use has separate rules |
| Utilities Allowance | ✅ Taxable | Cash utility allowance is fully taxable |
| Annual Bonus / Incentive | ✅ Taxable | Taxed in the month received — may spike your monthly deduction |
| Leave encashment | ✅ Taxable | Fully taxable when paid out |
| Gratuity (on retirement) | Partial | Exempt up to PKR 300,000 from approved gratuity fund |
| Provident Fund employer contribution | Partial | Exempt up to 1/10 of salary from approved PF |
EOBI Deduction — What Is It?
EOBI (Employees Old-Age Benefits Institution) is a mandatory social security contribution for employees in the formal sector. Under the EOBI Act 1976:
- Employee contribution: PKR 370 per month (fixed, not percentage-based)
- Employer contribution: 5% of minimum wage on behalf of each employee
- Benefit: On retirement (at age 60 for men, 55 for women), you receive a monthly pension for life, plus disability and survivor benefits
- Who it applies to: Companies with 5 or more employees are required to register all employees with EOBI
Worked Example — PKR 150,000/Month Gross Salary
| Component | Monthly (PKR) | Annual (PKR) |
|---|---|---|
| Gross Salary | 150,000 | 1,800,000 |
| Annual Tax Calculation: | ||
| 0% on first 600,000 | — | 0 |
| 1% on 600,001–1,200,000 | — | 6,000 |
| 11% on 1,200,001–1,800,000 | — | 66,000 |
| Total Annual Tax | 72,000 | |
| Monthly Tax Deduction | 6,000 | 72,000 |
| EOBI Deduction | 370 | 4,440 |
| Net Take-Home Salary | 143,630 | 1,723,560 |
| Effective Tax Rate | 4.0% of gross salary | |
How to Legally Reduce Your Salary Tax
- Claim charitable donation credit (Sec 61): Donations to FBR-approved NPOs give up to 30% of taxable income as a tax credit — submit receipt to employer for adjustment
- Children's education credit (Sec 60B): PKR 60,000 per child tuition credit — submit school fee receipts to HR
- Health insurance credit (Sec 62): Health insurance premium paid gets tax credit up to PKR 150,000
- Mortgage interest credit (Sec 64): If you have a home loan, profit paid is tax-creditable up to PKR 2 million or 50% of interest paid
- Restructure allowances: Work with HR to ensure some components are structured as reimbursements rather than cash allowances where legally permissible
Why Filing Your Annual Return Still Matters for Salaried Employees
Even if your employer deducts the exact correct tax monthly, you must still file an annual income tax return by September 30 to:
- Stay on the FBR Active Taxpayer List (ATL) — which saves you 50% on property WHT, lower bank WHT, and cheaper vehicle registration
- Claim any refund if excess tax was deducted (bonus months, multiple employers)
- Claim deductions (donations, education, health, mortgage) that reduce your final tax liability
- Submit your Wealth Statement — required for all filers and helps document your assets legally
Frequently Asked Questions — Salary & Take-Home Pay Pakistan
Two deductions are mandatory for most salaried employees: Income Tax withheld by your employer monthly based on Budget 2026-27 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 2026-27, 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.
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