1. What is Salary Income Tax in Pakistan?

Salary income tax in Pakistan is a direct tax levied on individuals' earnings from employment. The tax is calculated based on taxable income (salary minus allowable deductions) at progressive rates as defined by the Federal Board of Revenue (FBR).

2. How Does the Calculator Work?

The calculator uses the basic tax formula:

Where:

• \( Salary \) — Gross salary amount in PKR
• \( Deductions \) — Allowable deductions in PKR
• \( Rate \) — Applicable tax rate (decimal)

Explanation: The calculator first subtracts deductions from gross salary to determine taxable income, then applies the specified tax rate.

3. Importance of Tax Calculation

Details: Accurate tax calculation helps in financial planning, ensures compliance with tax laws, and helps avoid underpayment penalties or overpayment of taxes.

4. Using the Calculator

Tips: Enter salary and deductions in PKR, and tax rate as a decimal (e.g., 0.15 for 15%). All values must be valid (non-negative numbers, rate between 0-1).

5. Frequently Asked Questions (FAQ)

Q1: What are common deductions in Pakistan?
A: Common deductions include Zakat, voluntary pension contributions, and certain allowances as specified by FBR.

Q2: How often should I calculate my tax liability?
A: Ideally with each salary payment, and definitely before annual tax return filing.

Q3: Are tax rates fixed in Pakistan?
A: No, they follow a progressive slab system that changes annually in the federal budget.

Q4: What if my employer deducts tax at source?
A: This calculator can help verify if the correct amount is being deducted.

Q5: Where can I find current tax rates?
A: The latest tax rates are published on the Federal Board of Revenue (FBR) website.