The facts, in short

  • How salaried tax works: Slab rates applied to your taxable salary, withheld monthly by your employer.
  • What changes your figure: Exempt allowances, retirement contributions and credits lower your taxable income.
  • Why file: To claim any excess withheld as a refund, and to stay on the ATL.
  • Deadline: Generally 30 September, though FBR often extends.

How a salaried person is taxed in Pakistan

If you are salaried, your employer withholds tax every month under the "salary" income head. The withholding is an estimate — it assumes your salary is your only income and applies the slab rates to it. Your job at filing time is to reconcile that estimate against your actual position for the year.

When you file, FBR applies the same slab rates to your taxable salary: your gross salary, less the allowances and contributions the law exempts. The result is your actual liability. Compare it to what was withheld, and the difference is either a small amount still due or a refund owed to you.

How the slabs work

Salaried income is not taxed at one flat rate. It is divided into bands: income in the lowest band is taxed at a nil or low rate, and each band above it is taxed at a higher marginal rate, up to the top slab. This is why an increase in salary can move you into a higher band without taxing your whole income at that rate.

The exact thresholds are set by the annual Finance Act and they move. Do not compute your tax from last year's numbers. Our online estimator applies the current salaried slabs and shows your tax in seconds.

Rate Income 0% low … top
Figure 1 — Marginal slabs: each band of income is taxed at a higher rate than the one below it.

Deductions and credits that lower your tax

Your taxable salary is not simply your gross. Several items reduce it or reduce the tax you owe:

  • Exempt allowances. Certain allowances are excluded from taxable salary up to prescribed limits.
  • Retirement contributions. Contributions to an approved pension fund can reduce taxable income within statutory limits.
  • Tax already withheld. The tax your employer deducted is a credit against your liability — this is usually the biggest line.
  • Other credits. Investments, donations and certain payments can attract credits where the law allows them.

Missing a single credit is the most common reason a salaried filer overpays.

Your salary certificate is not your return. The annual certificate shows what your employer withheld. Your return shows what you actually owed. The two are not always the same — and that gap is often a refund.

Filing as a salaried person, step by step

  1. Get your documents. Salary certificate, bank statements for the year, and any withholding certificates.
  2. Log in to Iris. Sign in with your NTN and password.
  3. Enter salary income. Declare your taxable salary for the tax year that just ended.
  4. Apply deductions and credits. Reduce taxable salary and claim the tax already withheld.
  5. File the wealth statement if your income exceeds the threshold.
  6. Check the result. If tax is refundable, claim it. If payable, generate the PSID and pay.
  7. Save the acknowledgment. Keep the CPR and filing acknowledgment for your records.

Where salaried filers go wrong

  • Assuming withholding is the final word. It is an estimate, not your assessment.
  • Not claiming the refund. If you were over-withheld, the money is yours — but only if you file.
  • Forgetting the wealth statement. Salary alone does not exempt you from Section 116.
  • Filing for the wrong year. Always file for the year that just closed.
  • Skipping the year entirely. You fall off the ATL and pay higher withholding on everything.
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Frequently asked questions

What is the tax exemption threshold for salaried persons in Pakistan?

The exemption threshold changes with each Finance Act. For tax year 2026, salaried individuals enjoy a nil-rate band on their taxable salary, with rates rising in steps above it. Confirm the current threshold before you compute your liability.

How is salaried income taxed in Pakistan?

Salaried income is taxed under slab rates applied to your taxable salary — gross salary less any exempt allowances, contributions and expenses allowed by law. Rates rise in steps from the nil band to the top marginal rate, with a surcharge above a high-income threshold.

Can a salaried person claim a refund?

Yes. If more tax was withheld at source than your actual liability, you can claim the excess as a refund when you file your return.

Do salaried persons need a wealth statement?

Where your taxable income exceeds the prescribed threshold, yes — the wealth statement (Section 116) must be filed with your income tax return.

Makki Associates
Tax, corporate and digital services — Karachi

This article is general information, not advice on your particular circumstances. Tax law and deadlines change — confirm your position with us or another qualified professional before acting on it. Rates and thresholds referenced reflect the position at the date of writing (October 2026).