For 2026-27, anyone earning more than Rs 2,200,000 a year (about Rs 183,333 a month) pays less tax on salary than in 2025-26. Below that, nothing changed: the first three slabs are the same as last year.
The calculator starts at Rs 350,000 a month. At that salary tax falls from Rs 54,250 to Rs 47,500 a month, a saving of Rs 6,750. Enter your own salary to see your figure next to last year's.
What Finance Act 2026 changed for salaried people
The 2026-27 budget reshaped the upper part of the salaried table. The main changes:
- Rs 2.2 million to 3.2 million: rate cut from 23% to 20%.
- Rs 3.2 million to 4.1 million: rate cut from 30% to 25%.
- Above Rs 4.1 million: the single 35% slab was split into three. Income from Rs 4.1 million to 5.6 million is now taxed at 29%, and from Rs 5.6 million to 7 million at 32%.
- Top rate: still 35%, but it now starts at Rs 7 million instead of Rs 4.1 million.
- Surcharge: the 9% surcharge on salaried people with taxable income above Rs 10 million is gone from tax year 2027.
The tax-free limit of Rs 600,000, the 1% slab and the 11% slab did not change.
2026-27 against 2025-26 at common salaries
Monthly tax under each year's slabs, for the same salary paid across all 12 months.
| Monthly salary | Tax per month 2026-27 | Tax per month 2025-26 |
|---|---|---|
| Rs 100,000 | Rs 500 | Rs 500 |
| Rs 150,000 | Rs 6,000 | Rs 6,000 |
| Rs 200,000 | Rs 13,000 | Rs 13,500 |
| Rs 250,000 | Rs 23,000 | Rs 25,000 |
| Rs 300,000 | Rs 34,667 | Rs 38,833 |
| Rs 400,000 | Rs 62,000 | Rs 71,750 |
| Rs 500,000 | Rs 92,000 | Rs 106,750 |
| Rs 1,000,000 | Rs 264,500 | Rs 307,108 |
Up to Rs 150,000 a month the two columns match. The saving starts small, Rs 500 a month at Rs 200,000, and grows quickly: about Rs 4,167 a month at Rs 300,000, Rs 14,750 at Rs 500,000 and Rs 42,608 at Rs 1,000,000.
Who gains the most
The biggest relief in rupees goes to the highest earners. At Rs 1,000,000 a month (Rs 12 million a year) two changes stack up: lower rates between Rs 4.1 million and 7 million, and the end of the 9% surcharge. Tax drops from Rs 3,685,290 to Rs 3,174,000 for the year.
In percentage terms, people between Rs 350,000 and Rs 500,000 a month also see a clear cut. Their effective rate falls by about two to three percentage points. For someone on Rs 150,000 or less, the budget made no difference to tax on salary.
Worked example: Rs 350,000 a month
- Annual salary: Rs 350,000 x 12 = Rs 4,200,000.
- 2026-27 slab: Rs 4,100,001 to Rs 5,600,000, which is Rs 541,000 plus 29% of the amount over Rs 4,100,000.
- 29% of Rs 100,000 is Rs 29,000. Tax for the year: Rs 570,000, or Rs 47,500 a month.
- Under 2025-26 rules the same income fell in the top slab: Rs 616,000 plus 35% of Rs 100,000, giving Rs 651,000, or Rs 54,250 a month.
- Saving: Rs 81,000 a year, Rs 6,750 a month.
Tax slabs 2026-27 for salaried individuals
The full table for tax year 2027. These slabs apply where salary is more than 75% of your taxable income.
| # | Annual taxable income | Tax |
|---|---|---|
| 01 | Up to 600,000 | 0% |
| 02 | 600,001 to 1,200,000 | 1% of the amount over 600,000 |
| 03 | 1,200,001 to 2,200,000 | Rs 6,000 + 11% of the amount over 1,200,000 |
| 04 | 2,200,001 to 3,200,000 | Rs 116,000 + 20% of the amount over 2,200,000 |
| 05 | 3,200,001 to 4,100,000 | Rs 316,000 + 25% of the amount over 3,200,000 |
| 06 | 4,100,001 to 5,600,000 | Rs 541,000 + 29% of the amount over 4,100,000 |
| 07 | 5,600,001 to 7,000,000 | Rs 976,000 + 32% of the amount over 5,600,000 |
| 08 | Above 7,000,000 | Rs 1,424,000 + 35% of the amount over 7,000,000 |
Compare it with earlier years on the income tax slabs page.
Your employer should have applied the new slabs from your July 2026 salary. If your deduction did not drop, ask payroll whether they updated their tax table. Figures here are estimates; your payslip and tax certificate are the final word. qaaf is not connected with FBR.
2026-27 tax questions
When do the 2026-27 tax slabs start?
They apply to salary for tax year 2027, which runs from 1 July 2026 to 30 June 2027. Employers should use them from the July 2026 payroll onwards. Salary paid for June 2026 or earlier still falls under the 2025-26 slabs.
Did the tax-free limit go up in 2026-27?
No. Salary up to Rs 600,000 a year, or Rs 50,000 a month, stays free of income tax. The 1% slab up to Rs 1.2 million and the 11% slab up to Rs 2.2 million are also unchanged, so people earning up to about Rs 183,000 a month pay the same as last year.
Is the surcharge removed for everyone?
No. Finance Act 2026 removed it only for salaried individuals with taxable income over Rs 10 million. Non-salaried individuals and associations of persons above that level still pay the 10% surcharge. The calculator covers salaried slabs only.
What is the highest tax rate on salary in 2026-27?
35%, charged on income above Rs 7 million a year. The top slab is Rs 1,424,000 plus 35% of the amount over Rs 7 million. In 2025-26 the 35% rate began much lower, at Rs 4.1 million, and a 9% surcharge applied above Rs 10 million.
How much tax on Rs 200,000 salary in 2026-27?
Rs 13,000 a month. The annual salary of Rs 2,400,000 is in the 20% slab: Rs 116,000 plus 20% of Rs 200,000, which is Rs 156,000 a year. In 2025-26 the same salary paid Rs 13,500 a month, so the saving is Rs 500 a month.
Last reviewed 29 September 2026. Results are estimates; official notices always take precedence.