If you are planning for tax filing in Pakistan then you should know that updated tax rate Pakistan government has announced under the Finance Act 2024.
As the inflation is rising and the policies becomng tighter, even small changes in tax slabs can effects the money you take home from your salary.
Let us break down the income tax slabs in Pakistan for the fiscal year 2024 – 25 and explains what it means for the average salaried person.
If you are a salaried person or running a six figure business knowing your tax obligations is necessary in Pakistan.
f you’re unsure how these changes apply to your situation, Sabih Financials can guide you through your tax planning and help you become a registered filer without the hassle.
Tax Rate Pakistan: What’s New in 2024–2025?
Under the financial act of 2024 the tax rate in Pakistan has been revised and this is especially important for salaried individuals earning between Rs. 600,000 and Rs. 1,200,000 annually.
The taxes in this bracket have increased from 2.5% to 5% which doubles the liability for many middle class income earners.
While the exemption limit of Rs. 600,000 per year remains unchanged, the revision directly affects those earning more than Rs. 50,000 per month.
Here’s a quick look at the key updates:
- Rs. 0 – Rs. 600,000/year → No tax
- Rs. 600,001 – Rs. 1,200,000/year → Now taxed at 5%
- Higher income brackets have also seen adjustments in slab limits and tax percentages.
These changes are part of the government’s efforts to increase tax collection and formalize the economy.
Breakdown of the New Tax Slabs In Pakistan
To help you understand the new tax rates Pakistan government has announced study the table below:
Annual Salary (PKR) | Tax Rate |
0 – 600,000 | 0% |
600,001 – 1,200,000 | 5% |
1,200,001 – 2,400,000 | 12.5% |
2,400,001 – 3,600,000 | 20% |
3,600,001 – 6,000,000 | 25% |
6,000,001 – 12,000,000 | 32.5% |
Above 12,000,000 | 35% |
Example:
Let’s say your monthly salary is Rs. 100,000, which totals Rs. 1.2 million/year.
According to the updated tax rate:
- The first Rs. 600,000 is tax-free.
- The remaining Rs. 600,000 is taxed at 5%, resulting in an annual tax of Rs. 30,000.
- Monthly deduction: Rs. 2,500
This might seem small, but for individuals supporting families or dealing with rising utility and grocery bills, every rupee counts.
Comparison: Tax Rate Pakistan 2023–2024 vs. 2024–2025
Understanding how tax rates in Pakistan have changed over the years will help you prepare for the upcoming tax laws in Pakistan. Here is a detailed comparison:
Annual Salary (PKR) | 2023–2024 Tax Rate | 2024–2025 Tax Rate |
0 – 600,000 | 0% | 0% |
600,001 – 1,200,000 | 2.5% | 5% |
1,200,001 – 2,400,000 | 12.5% | 12.5% |
2,400,001 – 3,600,000 | 20% | 20% |
3,600,001 – 6,000,000 | 25% | 25% |
6,000,001 – 12,000,000 | 32.5% | 32.5% |
Above 12,000,000 | 35% | 35% |
Key Differences:
- The main change is in the 600,001 – 1,200,000 slab, where the tax rate has doubled from 2.5% to 5%.
- Higher brackets remain unchanged, but middle income earners will now contribute more than double what they paid last year.
Example:
If your annual income is Rs. 900,000:
- Last year: You paid around Rs. 7,500 in taxes.
- This year: You will pay around Rs. 15,000.
That’s a noticeable difference for someone managing tight monthly expenses!
To stay ahead and avoid surprises during tax filing season, consult the experts at Sabih Financials. Our team ensures you pay only what’s necessary no more, no less.
Why It Matters for You
Some people think that the revised tax rates are just a small policy change but for people with tight budgets and low salaries this directly impacts their savings, loan repayments and daily household budgets.
Why this change matters:
- More deduction, less take-home pay
A monthly income of Rs. 100,000 now gets taxed Rs. 2,500 instead of Rs. 1,250 that’s double the deduction. - Middle-income earners are most impacted
The biggest change hits those earning between Rs. 50,000 to Rs. 100,000/month, a group already stretched by rising costs of living. - Tax compliance is no longer optional
The government is becoming stricter about filer status, and non-filers may face higher withholding taxes or be blocked from financial services.
(See FBR’s official tax compliance guidelines for more.)
Conclusion
Understanding tax rates in Pakistan will help you predict your income and saving but most importantly it will help you stay compliant.
With tax on middle-income salaries now doubled, the pressure on take-home pay is real.
But you don’t have to navigate it alone.
Whether you’re trying to calculate your exact tax or register as a filer, Sabih Financials is here to help. From using our tax filing portal to getting one-on-one support, our services are built to make tax season simple.
And if you’re still unsure why filing matters, check out this guide on the benefits of becoming a filer in Pakistan — you might be surprised how much you’re leaving on the table by staying unregistered.
