The new fiscal year has arrived, and you might think, “So what?” Well, if you fall within the taxable bracket, it has everything to do with you. This year has brought some mighty changes into the spotlight. One is income tax slabs.
Yes, the FBR has rolled out new tax slabs for salaried individuals, business owners, and freelancers.
These slabs will determine how much you owe to the Federal Board of Revenue (FBR). So stay here because soon you’ll find a detailed income tax slab breakdown and how you can calculate your tax.
What Are Income Tax Slabs and Why Do They Matter in 2024 – 2025?
Income tax slabs are structured tiers that determine the amount of taxes one has to pay as per their income. In Pakistan, the FBR defines tax slabs and updates them yearly to keep up with the economy and government policies.
One crucial thing-income tax slabs are not one solution fix for all. Yes, you read it right. Taxpayers fall into different groups salaried, non-salaried, and businesses. So, tax slabs are applied accordingly.
But why should you care about income tax slabs this year? Well, these slabs make sure different income groups contribute their fair share. Further, it helps taxpayers in multiple other aspects, such as new opportunities, no overpaying, or worse penalties.
Updated Income Tax Slabs for Salaried Individuals (2024 – 2025)
Pakistan’s income tax slabs have undergone several significant adjustments as of the 2024–25 fiscal year. The following gives a quick rundown of the most recent FBR tax slabs for salaried individuals:
| Taxable Annual Income | Tax on Salary in Pakistan |
| Up to 600,000 | Zero tax |
| 600,001 – 1,200,000 | 5% of the total sum over 600,000 |
| 1,200,001 – 2,200,000 | 30,000 + 15% of sum over 1,200,000 |
| 2,200,001 – 3,200,000 | 180,000 + 25% of sum over 2,200,000 |
| 3,200,001 – 4,100,000 | 430,000 + 30% of sum over 3,200,000 |
| 4,100,000+ | 700,000 +35% of sum over 4,100,000 |
Income Tax for Freelancers and Self-Employed Individuals
Freelancers and the self-employed often fly under the tax radar until they don’t. The same income slabs apply to you. But with a twist. Your income as a freelancer is not subject to automatic taxation. No employer here to deduct tax from your salary. All tax responsibility falls on your shoulders.
However, freelancers often have irregular incomes. So, tax is based on your annual earnings. And if you forget to declare your income, this can land you in hot water with the tax authorities.
How To Calculate Your Tax Based on New Slabs?
Do you feel tax calculation is like climbing Everest? Well, It’s pretty simple if you do it in the following way.
➜ Step 1: Figure Out Your Total Income
It includes everything—salary, business earnings, rental income, and other taxable earnings. Let’s say your total income is Rs. 1,500,000.
➜ Step 2: Check out Your Tax Slab 2024–2025
Now, check which tax slab applies to you. For an income of Rs. 1,500,000, you fall into the Rs. 1,200,001 – 2,200,000 bracket. According to the slab, your base tax is Rs. 30,000 plus 15% of the amount over Rs. 1,200,000.
➜ Step 3: Calculate Tax for Your Slab
For Rs. 1,500,000, the amount exceeding Rs. 1,200,000 is Rs. 300,000. So, your tax calculation will be:
Rs. 30,000 + (300,000 x 0.15) = Rs. 30,000 + Rs. 45,000 = Rs. 75,000.
Include Fixed Taxes (if any).
Since your salary is within the range of the slab, no additional fixed tax is required in this particular case.
➜ Step 4: Subtract Any Deductions
Finally, subtract any tax deductions you’re eligible for—things like tax credits, donations, or health insurance premiums.
Let’s say you have a tax credit of Rs. 10,000.
Your final tax payable would be Rs. 75,000 – Rs. 10,000 = Rs. 65,000.
Impact of New Tax Policies on High Earners
The new 2024 tax slabs in Pakistan, which impose a 35% tax on income over Rs. 4,100,000, are particularly harsh on top incomes. The rise in tax rates underscores the government’s effort to redistribute wealth and enhance funding for public services.
In general, the goal of the 2024–25 tax slabs is to combine economic justice with revenue collection in a way that allows taxpayers to make contributions that correspond to their ability to pay.
Comparison: Tax Slabs 2023 vs. 2024 – What’s New?
| Annual Income | Tax Slab 2023-2024 | Tax Slab 2024-2025 |
| Up to 600,000 | Zero tax | Zero tax |
| 600,001 – 1,200,000 | 2.5% of the total sum over 600,000 | 5% of the total sum over 600,000 |
| 1,200,001 – 2,400,000 | 15,000 + 12.5% of the sum over 1,200,000 | 30,000 + 15% of sum over 1,200,000 |
| 2,400,001 – 3,600,000 | 165,000 + 17.5% of the sum over 2400,000 | 180,000 + 25% of sum over 2,200,000 |
| 3,600,001 – 6,000,000 | 375,000 + 22.5% of the sum over 3,600,000 | 430,000 + 30% of sum over 3,200,000 |
| 6,000,000 | 975,000 + 32.5% of the sum over 6,000,000 | 700,000 +35% of sum over 4,100,000 |
This fiscal year has brought some key changes to Pakistan’s income tax slabs. One major change is an increase in the threshold for the lowest tax bracket. It is a wise strategy to provide relief to low-income earners.
On the other hand, there are also new rates for higher-income brackets, aimed at distributing the tax burden more fairly.
Tax Saving Tips: Maximizing Your Take-Home Income
Attention taxpayers, want to save some hard-earned money? Well, here is a little planning for you.
- Make use of all the possible deductions (education, medical, etc.).
- Invest in retirement plans and mutual funds, which offer tax savings.
- When rebates are available, maximize them.
- Make a charity donation (which is deductible from taxes).
- Take advantage of interest deductions on home loans.
FAQ
The income tax slabs for 2024-25 vary. It starts with a 5% rate with income over Rs 600,000 annually.
Your yearly income and FBR Income Tax slab calculate tax on your salary. The tax slab varies yearly according to government new policies.
In 2024, the minimum income required to pay tax is Rs 600,001 annually.
Yes, just like employees, freelancers must pay income tax on their earnings.
Salaried individuals can benefit from deductions on medical expenses, retirement contributions, and investments in approved schemes.
