Business Desk 
Sep 17, 2025
Taxation serves as a vital component of national revenue, playing a crucial role in financing public services and infrastructure development.
In Pakistan, salary is considered a source of income to the extent to which it relates to employment exercised in Pakistan, wherever paid. According to the Federal Board of Revenue (FBR), the deadline for filing income tax returns for the fiscal year 2024-25 is September 30. However, taxpayers who file online using Form 114(1) may be eligible for an extended deadline of October 31.
Gadinsider has a comprehensive guide, providing you crucial information of taxes and deductions for salaried individuals.
How salary taxation works in Pakistan?
Salary taxation operates on a receipt basis in Pakistan, which means that a salaried individual is taxed in the year when the salary is received, not necessarily when it is earned.
For instance, if you earn a salary in tax year 2025 but receive a portion of it in tax year 2026, it will be taxed in tax year 2026 when you actually receive the payment. However, recognising potential unfairness in scenarios like receiving arrears, the tax law allows salaried individuals to approach the commissioner to apply for taxation at the previous year’s rates.
Individuals' income tax rates
For salaried individuals whose income from salary exceeds 75% of their total taxable income, a specific tax is applicable for the fiscal year 2024-25.
According to the analysis, the revised tax rate for the fiscal year 2024-25 compared to the previous year is an increased tax burden on individuals earning above Rs600,000, particularly in the lower and middle-income brackets.
How to calculate tax on salary?
Gadinsider has designed a tax calculator to help you easily determine your tax. By inputting your income, you will know the exact amount of tax to be deducted from your salary.
