Federal Budget 2026-27 · Announced 12 Jun 2026
Pakistan Salary Increase & Income Tax Calculator 2026-27
Calculate your revised gross pay, merged allowances, FBR income tax and — uniquely — how much you save from the four slab cuts announced in the Budget presented on 12 June 2026.
7%Adhoc Relief 2026 (on basic)
15%+10%2022 & 2025 adhoc merged · new 15% disparity allowance
4 slabsIncome tax cut
0%Surcharge (abolished)
Enter your salary details
Enter the figures exactly as shown on your May-2026 salary slip. The 2022 (15%) and 2025 (10%) adhoc reliefs are merged into basic pay. A new Disparity Reduction Allowance 2026 (15%) — equal in amount to your Adhoc Relief 2022 figure — is then added as a separate additional allowance, along with a new 7% Adhoc Relief 2026 (ARA-2026) on basic pay. The conveyance allowance is revised upward by 50% for all grades. Tax is estimated on your taxable salary (gross minus any tax-exempt allowance, e.g. medical allowance — exempt up to 10% of basic pay).
Please fill in BPS grade, gross pay and basic pay.
Your revised salary — FY 2026-27
Current gross
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New gross
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Est. monthly tax
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Take-home pay
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Monthly tax saving (slab cut)
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vs old FY26 slabs
Annual tax (FY27)
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Annual tax saving
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Revised pay components
| Pay component | Current (Rs.) | Revised (Rs.) |
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Step-by-step calculation
Income tax — old vs new slabs (FBR FY 2026-27)
| Item | FY26 (old) | FY27 (new) |
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Disclaimer: All figures are estimates based on the Budget 2026-27 measures announced in the Finance Bill (presented 12 June 2026, effective 1 July 2026). The 7% ARA-2026 is calculated on basic pay; the 2022 and 2025 adhoc reliefs are shown merged into basic, and a new Disparity Reduction Allowance 2026 (15%, equal to the Adhoc Relief 2022 amount) is added as a separate allowance. Income tax is estimated on annual taxable salary (gross minus any tax-exempt allowance you enter) using FBR salaried slabs, and may differ after other allowable deductions. The salaried surcharge has been abolished for FY27.
Status: These slab rates and reliefs are proposed in the Finance Bill 2026-27 and become final once Parliament passes the bill and the FBR issues the official notification. Confirm your exact figures with your accounts office before relying on them.
Last verified: 15 June 2026 against the Finance Bill 2026-27 as presented in the National Assembly on 12 June 2026, cross-checked with reporting from Geo News, The Express Tribune, Dawn/ProPakistani and taxcalculators.pk. Slab figures (Rs 116,000 + 20% above Rs 2.2m; Rs 316,000 + 25% above Rs 3.2m; cuts of 23→20%, 30→25%, 35→29%, 35→32%), the 7% salary/pension increase, the merging of the 2022 and 2025 adhoc reliefs (plus a new 15% Disparity Reduction Allowance added separately), the Rs 40,700 minimum wage and the surcharge abolition all match these sources.
Status: These slab rates and reliefs are proposed in the Finance Bill 2026-27 and become final once Parliament passes the bill and the FBR issues the official notification. Confirm your exact figures with your accounts office before relying on them.
Last verified: 15 June 2026 against the Finance Bill 2026-27 as presented in the National Assembly on 12 June 2026, cross-checked with reporting from Geo News, The Express Tribune, Dawn/ProPakistani and taxcalculators.pk. Slab figures (Rs 116,000 + 20% above Rs 2.2m; Rs 316,000 + 25% above Rs 3.2m; cuts of 23→20%, 30→25%, 35→29%, 35→32%), the 7% salary/pension increase, the merging of the 2022 and 2025 adhoc reliefs (plus a new 15% Disparity Reduction Allowance added separately), the Rs 40,700 minimum wage and the surcharge abolition all match these sources.
How the Budget 2026-27 changes your salary
The Federal Budget 2026-27 was presented in the National Assembly on 12 June 2026 and takes effect from 1 July 2026. For government employees in BPS-1 to BPS-22, three things change at once: a 7% Adhoc Relief Allowance 2026 is added on basic pay, the 15% (2022) and 10% (2025) adhoc reliefs are merged into basic pay (raising the pensionable base) with a new 15% Disparity Reduction Allowance 2026 added separately, and the FBR income tax slabs for the salaried class are cut across four brackets with the surcharge abolished. This calculator applies all of these so you can see your revised gross, your monthly tax, and how much the slab cut actually saves you.
Income tax slabs 2026-27 vs 2025-26 (salaried individuals)
| Annual taxable income (Rs.) | FY26 rate | FY27 rate |
|---|---|---|
| Up to 600,000 | 0% | 0% |
| 600,001 – 1,200,000 | 1% | 1% |
| 1,200,001 – 2,200,000 | 11% | 11% |
| 2,200,001 – 3,200,000 cut | 23% | 20% |
| 3,200,001 – 4,100,000 cut | 30% | 25% |
| 4,100,001 – 5,600,000 cut | 35% | 29% |
| 5,600,001 – 7,000,000 cut | 35% | 32% |
| Above 7,000,000 | 35% | 35% |
| Surcharge (income > 10,000,000) | 9% | Abolished |
Salaried individuals earning up to Rs 2.2 million a year (about Rs 183,000/month) see no change in slab rate — the relief is concentrated in the Rs 2.2 million to Rs 7 million band. The largest cut is the Rs 4.1m–5.6m bracket, dropping from 35% to 29%.
How to use this calculator
- Pick your BPS grade and enter gross pay and basic pay exactly as on your May-2026 slip.
- Add your conveyance allowance and your existing 2022 (15%) and 2025 (10%) adhoc reliefs — both are merged into basic, and a new 15% Disparity Reduction Allowance (equal to your 2022 figure) is added separately.
- Optionally enter any tax-exempt allowance (e.g. medical, exempt up to 10% of basic) to refine the tax estimate.
- Press calculate to see your new gross, monthly and annual FBR tax, take-home pay, and your saving from the slab cuts.
Frequently asked questions
How much is the salary increase in Budget 2026-27?
The government announced a 7% increase for federal employees, applied as a 7% Adhoc Relief Allowance 2026 on basic pay, plus a matching 7% rise in pensions, effective 1 July 2026. The 2022 (15%) and 2025 (10%) adhoc reliefs were merged into basic pay, and a new Disparity Reduction Allowance 2026 (15%, equal to the 2022 adhoc amount) was added as a separate allowance.
What are the new income tax slabs for salaried persons in 2026-27?
Four slabs were cut: Rs 2.2m–3.2m from 23% to 20%, Rs 3.2m–4.1m from 30% to 25%, Rs 4.1m–5.6m from 35% to 29%, and Rs 5.6m–7m from 35% to 32%. Income up to Rs 600,000 stays tax-free and the surcharge on the salaried class is abolished.
Is the surcharge on salaried individuals still applicable?
No. The surcharge that previously applied to salaried individuals earning above Rs 10 million a year (9% in FY26) has been fully abolished from 1 July 2026.
Is income tax calculated on gross salary or taxable salary?
FBR slabs apply to taxable salary income. This calculator lets you subtract a tax-exempt allowance (such as medical allowance, exempt up to 10% of basic pay) from gross before applying the slabs, giving a closer estimate than tools that simply tax raw gross.
When do the new salary and tax rates take effect?
From 1 July 2026, the start of fiscal year 2026-27. Employees should see both the revised deduction and the 7% raise in their July 2026 pay slip.