JUNE 2026 – PAKISTAN
TAX CHANGES PUBLISHED IN THE FINANCE BILL, 2026
It is important that employers note the following:
Tax changes published for the 2026/2027 year of assessment
Pakistan’s Finance Minister presented the budget for FY2026–27 on 12 June 2026. The Government of Pakistan introduced changes to personal income tax rates for salaried employees as part of the 2026/2027 Federal Budget. Simultaneously, the Finance Bill 2026 was published, detailing the tax changes announced in the budget speech.
The amendments are intended to provide tax relief to salaried taxpayers through a restructuring of the income tax brackets and a reduction in tax rates applicable to several income bands. As a result, many employees will experience lower monthly tax deductions and an increase in take-home pay from July 2026, subject to the enactment of the Finance Bill 2026.
Key payroll changes
- Revised income tax slabs for salaried employees:
- Income tax rates have been reduced across multiple income brackets, particularly for middle- and higher-income earners.
- The structure remains progressive, with tax calculated based on income bands.
- Abolition of high-income surcharge
- The 9% surcharge on income above PKR 10 million has been abolished.
- Minimum wage proposal
- The Government has proposed increasing the statutory minimum wage for unskilled workers to approximately PKR 40,700. The revised rates remain subject to approval and publication by the respective provincial authorities. A further update will be provided once the new minimum wages are officially announced.
To view the Finance Bill, 2026, follow the link.
