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Income Tax Slabs 2022-23 Pakistan | Salary Tax Calculator

Income Tax Slabs 2022-23 Pakistan | Salary Tax Calculator

Here we are going to discuss everything you should know about the calculation of tax on your salary income according to the latest Salary tax slabs 2022-23 rates in Pakistan. There are different Income Tax Slabs for 2022-2023 year in Pakistan on Salary Income.

DIVISION OF SALARY INCOME IN PAKISTAN

Salary Income is subject to the following divisions as per the general practices and according to the Income Tax Ordinance, 2001. Have a look:

  • Basic Salary
  • House Rent Allowance (HRA)
  • Conveyance Allowance
  • Medical and Other Allowances

BASIC SALARY

It’s a fixed amount of money that you may receive without any extra payments or deductions. It doesn’t include any type of allowances, commissions, bonuses, or overtime pay.

HOUSE RENT ALLOWANCE (HRA)

The House Rent Allowance (HRA) consists of a certain percentage of your gross salary. It is set according to the amount of your take home salary. Usually, a house rent allowance is around 40 to 50 percent of your basic salary. 

CONVEYANCE ALLOWANCE

Around 10-15 percent of the salaries are allocated for conveyance allowances. For example, if you’re earning PKR 50,000 monthly, a conveyance allowance of around PKR 5,000 to 7,000 will be included in this amount.

MEDICAL AND OTHER ALLOWANCES

Many employers, offer separately amount of medical allowance. Same is the case with other types of allowances such as entertainment allowances, travel allowances and fuel allowances.

Medical Allowance Exemption Limit

Medical Allowance up to 10% of Basic Salary is exempt from Tax and is available as deductions from salary Income to calculate Taxable Income.

LATEST SALARY INCOME TAX SLAB RATES IN PAKISTAN FOR TAX YEAR 2023

According to the revised income tax slabs for FY 2022-23, Income tax rates has been revised and have been increased as compare to previous tax year (i.e. Tax Year 2022). Now, let’s learn more about the latest tax slab rates in Pakistan for the fiscal year 2022-23.

Income Tax Slab Rates 2022-2023 in Pakistan on Salary

Taxable IncomeIncome Tax Rate in Pakistan
Where taxable income does not exceed Rs600,000The tax rate is zero
Where taxable income exceeds Rs. 600,000 but does not exceed Rs. 1,200,0002.5 per cent of the amount exceeding Rs 600,000
Where taxable income exceed Rs1,200,000 but does not exceed Rs2,400,000Rs15,000 + 12.5 per cent of the amount exceeding Rs1,200,000
If taxable income exceeds Rs2,400,000 but does not exceed Rs3,600,000Rs165,000 + 20% of the amount exceeding Rs2,400,000
Where taxable income exceeds Rs3,600,000 but does not exceed Rs6,000,000Rs405,000 + 25 per cent of the amount exceeding Rs3,600,000
If taxable income exceeds Rs6,000,000 but does not exceed Rs12,000,000Rs1,005,000 + 32.5 per cent of the amount exceeding Rs6,000,000
Where taxable income exceeds Rs12,000,000Rs2,955,000 + 35 per cent of the amount exceeding Rs12,000,000

How to Calculate Income Tax on Salary in Pakistan in 2022

Basic salary
Add: Salary Allowances:
  + House Rent Allowance
  + Conveyance Allowance 
  + Medical Allowance 
  + any other allowance
  --------------------------------------
  Gross income from salary =
  (-) Salary Related Deductions:
  --------------------------------------
  Net income / Taxable Income
  (Tax calculated according to the income tax slabs)

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