Non-salaried tax slabs for 2026-27
Budget 2026-27 focused its relief on salaried people. The slabs for business individuals and AOPs carried over from the previous year, so the gap between the two groups has widened. A person earning Rs 2.4 million from business pays Rs 410,000, while a salaried person with the same income pays Rs 156,000.
| Annual taxable income | Tax |
|---|---|
| Up to Rs 600,000 | 0% |
| Rs 600,001 – 1,200,000 | 15% of amount over Rs 600,000 |
| Rs 1,200,001 – 1,600,000 | Rs 90,000 + 20% of amount over Rs 1,200,000 |
| Rs 1,600,001 – 3,200,000 | Rs 170,000 + 30% of amount over Rs 1,600,000 |
| Rs 3,200,001 – 5,600,000 | Rs 650,000 + 40% of amount over Rs 3,200,000 |
| Above Rs 5,600,000 | Rs 1,610,000 + 45% of amount over Rs 5,600,000 |
Worked example
A pharmacy owner has sales of Rs 15 million and allowable expenses of Rs 12.6 million, so taxable profit is Rs 2,400,000.
- Rs 2,400,000 lies in the Rs 1,600,001 – 3,200,000 slab.
- Tax = Rs 170,000 + 30% × (2,400,000 − 1,600,000) = 170,000 + 240,000 = Rs 410,000.
- Income is below Rs 10 million, so there is no surcharge.
- Advance taxes already paid during the year (on electricity bills, bank withdrawals, purchases) are adjusted against this when filing.
Reduce what you owe – legally
- Keep proper records of purchases and expenses; without them FBR can estimate your income.
- Claim adjustable withholding taxes shown on your utility bills, phone bills and bank statements.
- Use tax credits for approved donations and pension fund investments.
- Check the IT export regime if you are a freelancer: registered exporters of IT services often pay much less as a final tax.
If you are an employee, use the salary income tax calculator instead.
Estimates for planning only, based on the reported Finance Act 2026 rates. Special regimes (builders, retailers under the Tajir Dost scheme, final tax on exports) are not covered. Confirm with FBR or a tax adviser.
Frequently asked questions
Who pays the non-salaried tax rates?
Individuals whose salary is 75% or less of their total taxable income: shopkeepers, traders, doctors and lawyers in private practice, landlords with business income, and most freelancers. Associations of persons (partnership firms) use the same slabs.
Do freelancers in Pakistan pay these rates?
Freelancers who export IT services and receive payments through banks into Pakistan can usually opt for the final tax regime on export proceeds (typically 0.25%–1% withheld by the bank) if they meet the conditions and register with PSEB. Others pay the normal non-salaried slabs on their profit.
Is the business income surcharge still applicable?
Yes. A 10% surcharge on the tax amount applies when taxable income of a non-salaried individual or AOP exceeds Rs 10 million. The calculator adds it automatically.
Can I deduct business expenses?
Yes. Tax is charged on profit, not sales. Rent of shop, salaries to staff, utility bills, depreciation and other expenses incurred wholly for the business are deductible if you keep records.
What if I have both salary and business income?
Add both together. If salary is more than 75% of the total, the salaried slabs apply to all of it; otherwise these non-salaried slabs apply to all of it.
Last reviewed: October 2026