Direct Salary Tax Answer
For Tax Year 2025 (July 1, 2024 to June 30, 2025), annual salary income up to PKR 600,000 is 100% tax-free. Taxable salary between PKR 600,001 and PKR 1,200,000 is taxed at 5% of the excess. Slabs progressively rise to 15%, 25%, 30%, and 35% on income exceeding PKR 4,100,000, with a 10% surcharge applied to taxable earnings exceeding PKR 10 million. Employers deduct this tax monthly under Section 149.
Governing Law: First Schedule, Part I, Division I of the Income Tax Ordinance 2001 (as amended by Finance Act 2024).
1. Official Salaried Tax Slabs (Tax Year 2025)
An individual qualifies as a "salaried taxpayer" under the law if salary constitutes more than 75% of their total taxable income. Below are the official progressive statutory brackets:
| Taxable Salary Bracket (PKR) | Statutory Tax Rate (FY 2024–2025) | Monthly Impact Example |
|---|---|---|
| Up to PKR 600,000 | 0% (Completely Exempt) | PKR 0 tax up to PKR 50,000 / month |
| PKR 600,001 – PKR 1,200,000 | 5% of amount exceeding PKR 600,000 | At PKR 100K/mo, annual tax = PKR 30,000 (PKR 2,500/mo) |
| PKR 1,200,001 – PKR 2,200,000 | PKR 30,000 + 15% of amount exceeding PKR 1,200,000 | At PKR 150K/mo, annual tax = PKR 120,000 (PKR 10,000/mo) |
| PKR 2,200,001 – PKR 3,200,000 | PKR 180,000 + 25% of amount exceeding PKR 2,200,000 | At PKR 250K/mo, annual tax = PKR 380,000 (PKR 31,667/mo) |
| PKR 3,200,001 – PKR 4,100,000 | PKR 430,000 + 30% of amount exceeding PKR 3,200,000 | At PKR 300K/mo, annual tax = PKR 550,000 (PKR 45,833/mo) |
| Exceeding PKR 4,100,000 | PKR 700,000 + 35% of amount exceeding PKR 4,100,000 | At PKR 500K/mo, annual tax = PKR 1,365,000 (PKR 113,750/mo) |
2. Allowable Exemptions & Deductible Allowances
Salaried professionals can legitimately optimize their tax liability through statutory exemptions recognized under the Income Tax Ordinance:
Medical Allowance Exemption (Clause 139, Part I, 2nd Schedule)
Medical allowance received from your employer is 100% tax-exempt up to 10% of your Basic Salary, provided free medical treatment or hospital reimbursement is not part of the employment contract.
Charitable Donations Tax Credit (Section 61)
Direct tax credits are allowable for donations paid through crossed banking instruments to non-profit organizations approved under Section 2(36) of the Ordinance (up to 30% of taxable income).
Voluntary Pension Scheme (VPS) Contribution Credit (Section 63)
Investment in approved Voluntary Pension Schemes licensed by SECP entitles taxpayers to a direct tax rebate up to 20% of their taxable income for the tax year.
Adjustable Withholding Deductions (Sections 235, 236)
Advance taxes deducted on mobile phone bills, domestic electricity connections, vehicle token taxes, or banking transactions can be directly set off against your final tax liability on FBR Iris.
3. Salaried Return Documentation Checklist
Salary Certificate / Tax Deduction Slip
Issued by employer's HR/Finance under Section 149 showing monthly deductions.
Bank Statements with Closing Balance as of June 30
All active personal bank accounts, including provident fund or savings accounts.
Personal Asset Portfolios & Major Inflows / Outflows
Real estate, vehicles, gold holdings, or loan repayments to reconcile the wealth statement.
Notice to Corporate Employees: Having tax withheld by your employer under Section 149 does not fulfill your statutory obligation to file an annual income tax return. You must independently submit your electronic return on FBR Iris to be enrolled on the Active Taxpayer List (ATL).