Managing employee payroll in Pakistan requires strict adherence to Federal Board of Revenue (FBR) Section 149 income tax withholding rules. Understanding the progressive tax slabs, taxable allowances, and employer statutory contributions (EOBI & Social Security) is crucial for both HR departments and salaried employees.
Official Income Tax Slabs for Salaried Individuals
An individual is classified under the salaried class when their salary income exceeds 75% of their total taxable income for the tax year. Here is the annual tax schedule:
| Taxable Income Bracket (PKR) | Rate of Tax |
|---|---|
| Up to PKR 600,000 | 0% (Tax Exempt) |
| PKR 600,001 to PKR 1,200,000 | 5% of the amount exceeding PKR 600,000 |
| PKR 1,200,001 to PKR 2,200,000 | PKR 30,000 + 15% exceeding PKR 1,200,000 |
| PKR 2,200,001 to PKR 3,200,000 | PKR 180,000 + 25% exceeding PKR 2,200,000 |
| PKR 3,200,001 to PKR 4,100,000 | PKR 430,000 + 30% exceeding PKR 3,200,000 |
| Exceeding PKR 4,100,000 | PKR 700,000 + 35% exceeding PKR 4,100,000 |
Calculate your exact monthly take-home salary and breakdown instantly with our interactive Pakistan Salary Tax Calculator.
Tax-Exempt vs. Taxable Allowances in Pakistan
- Medical Allowance: Fully exempt up to 10% of basic salary if hospitalization is not separately reimbursed.
- Conveyance Allowance: Generally taxable unless provided exclusively for official business duties.
- House Rent Allowance (HRA): Included in gross taxable salary for calculating monthly Section 149 withholding.
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