Pakistan Budget 2026-27
Key figures, new tax slabs for salaried people, salary and pension increases, explained simply. Figures from the Finance Division’s Budget in Brief 2026-27.
Calculate your salary tax →
Pakistan’s federal budget for 2026-27 has a total outlay of Rs 18.77 trillion. Finance Minister Muhammad Aurangzeb presented it on 12 June 2026, and the Finance Act 2026 took effect on 1 July 2026. Interest payments on debt take Rs 8.05 trillion, the largest single item. Federal salaries and pensions rose 7%, and the minimum wage is Rs 40,700 a month.
Where the money goes
In simple terms: of every Rs 100 the federal government plans to spend, about Rs 43 goes to interest, Rs 16 to defence and Rs 5 to development. After the provinces receive their Rs 8.85 trillion share, the federal government keeps Rs 11.75 trillion of revenue, which is less than interest plus defence. The gap is covered by borrowing.
Budget 2026-27 at a glance
| Item | 2026-27 |
|---|---|
| Total federal expenditure | Rs 18,771 billion |
| Interest (mark-up) payments | Rs 8,054 billion |
| Defence services | Rs 3,000 billion |
| Federal development (PSDP) | Rs 1,000 billion |
| Pensions | Rs 1,103 billion |
| Subsidies | Rs 1,091 billion |
| FBR tax revenue target | Rs 15,264 billion |
| Non-tax revenue | Rs 5,336 billion |
| Provinces’ share of revenue | Rs 8,848 billion |
| Net federal revenue | Rs 11,751 billion |
| Overall fiscal deficit | Rs 5,226 billion (3.6% of GDP) |
| Primary surplus | Rs 2,828 billion (2.0% of GDP) |
| National development budget (federal + provincial + others) | Rs 3,675 billion (Rs 4,224 billion in 2025-26) |
| GDP growth target | 4% |
| Inflation target | 8.2% |
Salaries, pensions and minimum wage
These increases apply to federal employees and pensioners. Provincial employees get the increase announced in their own provincial budget.
Income tax slabs for salaried persons (from 1 July 2026)
The Finance Act 2026 cut rates in the middle and upper slabs: 30% became 25%, and 35% became 29% and 32% in the next two slabs. The budget also announced the end of the surcharge on salaried persons. Income up to Rs 600,000 a year remains tax-free.
| Annual taxable salary | Tax |
|---|---|
| Up to Rs 600,000 | 0% |
| Rs 600,001 to 1,200,000 | 1% of amount above Rs 600,000 |
| Rs 1,200,001 to 2,200,000 | Rs 6,000 + 11% of amount above Rs 1,200,000 |
| Rs 2,200,001 to 3,200,000 | Rs 116,000 + 20% of amount above Rs 2,200,000 |
| Rs 3,200,001 to 4,100,000 | Rs 316,000 + 25% of amount above Rs 3,200,000 |
| Rs 4,100,001 to 5,600,000 | Rs 541,000 + 29% of amount above Rs 4,100,000 |
| Rs 5,600,001 to 7,000,000 | Rs 976,000 + 32% of amount above Rs 5,600,000 |
| Above Rs 7,000,000 | Rs 1,424,000 + 35% of amount above Rs 7,000,000 |
Salary tax calculator 2026-27
Enter your monthly salary to see the income tax under the slabs above.
Estimate for a fixed salary with no other income, allowances or deductions. Your employer’s withholding may differ slightly.
Tax on common monthly salaries
| Monthly salary | Annual salary | Annual tax | Tax per month |
|---|---|---|---|
| Rs 50,000 | Rs 600,000 | Rs 0 | Rs 0 |
| Rs 100,000 | Rs 1,200,000 | Rs 6,000 | Rs 500 |
| Rs 150,000 | Rs 1,800,000 | Rs 72,000 | Rs 6,000 |
| Rs 200,000 | Rs 2,400,000 | Rs 156,000 | Rs 13,000 |
| Rs 300,000 | Rs 3,600,000 | Rs 416,000 | Rs 34,667 |
| Rs 500,000 | Rs 6,000,000 | Rs 1,104,000 | Rs 92,000 |
What it means for you
People earning above Rs 3.2 million a year (about Rs 267,000 a month) benefit most, because the rate cuts apply to income above that level.
Salaries up to Rs 600,000 a year stay completely tax-free.
The 7% raise is below the 8.2% inflation target, so the real value of pay may still fall slightly.
The minimum wage is Rs 40,700 a month, though provinces set and enforce their own minimum wage rules.
Related: Pakistan's revised GDP growth figures, SBP foreign exchange reserves and petrol price in Pakistan today.
Sources: Finance Division, Budget in Brief 2026-27; KPMG summary of the Finance Act 2026 (7 July 2026); salary, pension, minimum wage, growth and inflation figures as announced in the budget speech on 12 June 2026 and reported by APP and Aaj News. This page is updated as new budget measures are notified; next update: Budget 2027-28 in June 2027.