ByThe Federal Board of Revenue (FBR) has announced the new salary tax slabs for the tax year 2025, effective from July 1, 2024, to June 30, 2025. This article provides a detailed explanation of these tax rates and how they impact your taxable income.
Salary Tax Slabs for Year 2025
Here’s a breakdown of the salary tax slabs for the tax year 2025:
| Annual Salary (Rupees) | Tax Rate (2025) |
|---|---|
| Upto 600,000 | 0% |
| 600,000 – 1,200,000 | 5% of the amount exceeding Rs. 600,000 |
| 1,200,000 – 2,200,000 | Rs. 30,000 + 15% of the amount exceeding Rs. 1,200,000 |
| 2,200,000 – 3,200,000 | Rs. 180,000 + 25% of the amount exceeding Rs. 2,200,000 |
| 3,200,000 – 4,100,000 | Rs. 430,000 + 30% of the amount exceeding Rs. 3,200,000 |
| Above 4,100,000 | Rs. 700,000 + 35% of the amount exceeding Rs. 4,100,000 |
How to Calculate Your Tax Liability?
To calculate your tax liability, you can use the following steps:
- Determine Your Gross Annual Salary: This includes your basic salary, allowances, bonuses, and other income.
- Identify the Applicable Tax Slab: Based on your gross annual salary, determine the relevant tax slab from the table above.
- Calculate Taxable Income: Subtract any tax exemptions and deductions from your gross annual salary.
- Apply the Tax Rate: Apply the corresponding tax rate to your taxable income.
- Calculate Tax Liability: Multiply the taxable income by the tax rate to determine your total tax liability.
Example:
If your annual salary is Rs. 1,500,000, you fall into the second tax slab. Your tax liability would be:
- Rs. 30,000 + 15% of (Rs. 1,500,000 – Rs. 1,200,000) = Rs. 75,000
Free Salary Tax Calculator:
To simplify the tax calculation process, we’ve created a free salary tax calculator. Simply input your annual gross salary, and the calculator will automatically determine your tax liability.
To calculate taxes on salary for previous tax years you can use Salary Income Tax Calculator
Tax Deduction at Source (TDS):
Your employer is responsible for deducting tax from your salary and remitting it to the FBR. This is known as Tax Deduction at Source (TDS).
Additional Considerations:
- Tax Exemptions and Deductions: Be aware of the various tax exemptions and deductions available to reduce your taxable income. These may include deductions for health insurance premiums, education expenses, and charitable donations.
- Tax Withholding: Your employer is responsible for withholding taxes from your salary and remitting them to the FBR.
- Tax Filing: You must file an annual income tax return to declare your income and pay any outstanding taxes.
- Consult a Tax Professional: If you have complex financial situations or need personalized advice, it’s advisable to consult a tax professional.
Understanding the salary tax slabs in Pakistan is essential for individuals and businesses alike. By staying informed about the latest tax regulations, you can effectively manage your tax liabilities and optimize your financial planning.
