Enter your taxable income to see the tax.
Short answer: For tax year 2026-27, business and other non salaried income in Pakistan is taxed at 0% up to Rs 600,000, then 15%, 20%, 30% and 40% on each higher band, and 45% above Rs 5.6 million. The same table applies to partnership firms (AOPs), with 40% instead of 45% at the top for professional firms. Above Rs 10 million of taxable income, a 10% surcharge is added to the tax. These slabs did not change in the 2026 budget.
Key takeaways
- Business income slabs for 2026-27 are exactly the same as 2025-26: the Finance Act 2026 only changed the salaried table.
- The salaried table applies only if your salary is more than 75% of your taxable income. Otherwise the business table applies to everything, salary included.
- The 10% surcharge under section 4AB starts when taxable income exceeds Rs 10 million, and it is charged on the tax, not on the income.
- At Rs 30 lakh of taxable income, a business person pays Rs 590,000 while a salaried person pays Rs 276,000.
- Minimum tax on turnover (section 113) can apply once turnover reaches Rs 100 million.
How to use this income tax calculator
Choose whether you are an individual, an ordinary partnership firm or a professional firm. Enter your taxable income for the year: business profit after allowable expenses, plus rent and other income taxed at normal rates, plus any salary. If part of it is salary, enter that too, so the calculator can apply the 75% test. You can also enter tax already deducted during the year, such as withholding on bank transactions or the advance tax collected with your car token.
The result shows which table applies, the tax on the slabs, any surcharge, the effective rate, your marginal rate, how much to set aside each month, what is left to pay after tax already paid, and last year’s figure for the same income.
Business income tax slabs 2026-27
The rates are in clause (1) of Division I, Part I of the First Schedule to the Income Tax Ordinance 2001, as amended up to 30 June 2026. This table was set by the Finance Act 2024 and applies to every individual and association of persons except a salaried individual.
| Taxable income (Rs) | Tax |
|---|---|
| Up to 600,000 | 0% |
| 600,001 to 1,200,000 | 15% of the amount above 600,000 |
| 1,200,001 to 1,600,000 | 90,000 + 20% of the amount above 1,200,000 |
| 1,600,001 to 3,200,000 | 170,000 + 30% of the amount above 1,600,000 |
| 3,200,001 to 5,600,000 | 650,000 + 40% of the amount above 3,200,000 |
| Above 5,600,000 | 1,610,000 + 45% of the amount above 5,600,000 |
Each rate applies only to the part of income inside its band. Earning Rs 1 more and crossing into the next band never makes your whole income taxed at the higher rate.
Did business tax change from last year?
No. The federal Finance Act 2026 replaced only the salaried table in clause (2) and removed the surcharge for individuals with salary income. The business table in clause (1) was not touched, so your tax for 2026-27 on the same business income is the same as in 2025-26. Many pages online still show the budget proposals or older tables, so check the year before you trust a number.
AOP tax rates
A partnership firm or other association of persons pays tax on its own income using the same table as individuals. There is one exception, written as a proviso to clause (1): an AOP that is a professional firm prohibited from incorporating by law or by the rules of its professional body (law firms and chartered accountancy firms are the usual examples) pays 40% instead of 45% on income above Rs 5.6 million.
| Taxable income | Ordinary AOP | Professional firm AOP |
|---|---|---|
| Rs 6,000,000 | Rs 1,790,000 | Rs 1,770,000 |
| Rs 12,000,000 (with surcharge) | Rs 4,939,000 | Rs 4,587,000 |
The surcharge also applies to AOPs above Rs 10 million. A member’s share of profit from an AOP that has paid its tax is not taxed again in the member’s hands, but it is counted to work out the rate on the member’s other income. This calculator does not do that step.
Surcharge above Rs 10 million
Section 4AB charges a surcharge of 10% of the income tax under Division I on every individual and AOP whose taxable income exceeds Rs 10 million. At exactly Rs 10 million there is no surcharge. FBR’s circular on the Finance Act 2026 confirms that the 10% continues for non salaried individuals and AOPs, while the 9% surcharge on salaried individuals was withdrawn.
Example: Rs 12 million of business income gives Rs 4,490,000 tax on the slabs, plus Rs 449,000 surcharge, for a total of Rs 4,939,000. That is an effective rate of about 41.2%.
A grey area: the law now says no surcharge is payable by “an individual deriving income chargeable under the head Salary”. Read literally, that covers someone with a small salary and a larger business. The calculator follows that wording and shows no surcharge for 2026-27 in that case, but FBR’s circular describes the relief as being for salaried individuals. If you are in this position and above Rs 10 million, confirm with your tax advisor before filing.
Salary and business together: the 75% rule
Clause (2) says the salaried table applies only where your income under the head Salary exceeds 75% of your taxable income. If salary is 75% or less, the business table applies to your whole taxable income, including the salary part. So a teacher with a tuition academy, or an employee with a side shop, often ends up on the business table.
| Taxable income | Salary share | Table used | Tax 2026-27 |
|---|---|---|---|
| Rs 3,000,000 | 80% | Salaried | Rs 276,000 |
| Rs 3,000,000 | 0% | Business | Rs 590,000 |
| Rs 4,000,000 | 25% | Business | Rs 970,000 |
On Rs 30 lakh a year, business income pays Rs 590,000 tax and salary pays Rs 276,000: the 75% rule decides which you get.
If your salary is more than 75%, use my salary tax calculator for 2026-27, which also shows the monthly deduction your employer should make. The calculator here shows the salaried result for reference and links you there.
Tax on business income in Pakistan: worked examples
| Taxable income | Tax on slabs | Surcharge | Total | Effective rate |
|---|---|---|---|---|
| Rs 600,000 | Rs 0 | Rs 0 | Rs 0 | 0% |
| Rs 1,000,000 | Rs 60,000 | Rs 0 | Rs 60,000 | 6.00% |
| Rs 3,000,000 | Rs 590,000 | Rs 0 | Rs 590,000 | 19.67% |
| Rs 6,000,000 | Rs 1,790,000 | Rs 0 | Rs 1,790,000 | 29.83% |
| Rs 10,000,000 | Rs 3,590,000 | Rs 0 | Rs 3,590,000 | 35.90% |
| Rs 12,000,000 | Rs 4,490,000 | Rs 449,000 | Rs 4,939,000 | 41.16% |
How Rs 3,000,000 works: it falls in the Rs 1.6 million to Rs 3.2 million band, so tax is Rs 170,000 plus 30% of Rs 1,400,000 (the amount above Rs 1.6 million), which is Rs 420,000. Total Rs 590,000. Setting aside about Rs 49,167 a month covers it.
What counts as taxable income
Taxable income is your total income under the normal heads minus deductible allowances. For a business, it is profit: sales or fees, less expenses spent to earn that income, less tax depreciation. Rent taxed at normal rates and other income go in too. Some income is taxed separately and stays out of this calculation, for example profit on bank deposits, dividends, capital gains on shares, and IT export proceeds taxed as final under section 154A. If you are a freelancer receiving foreign payments, my freelancer tax calculator covers the 0.25% and 1% rates on export proceeds.
Minimum tax and super tax
Two more rules can raise the bill for bigger businesses, and the calculator only warns about them:
- Minimum tax (section 113): for an individual or AOP with turnover of Rs 100 million or more, if the tax worked out on profit is lower than a set percentage of turnover, the turnover based figure is payable. The percentage depends on the sector, so ask your advisor which line of the schedule fits your business.
- Super tax (section 4C): after the Finance Act 2026, persons other than banks and a few listed sectors pay 8% super tax only when income exceeds Rs 500 million.
Advance taxes are not extra tax. Withholding on your electricity bill, mobile, car token and bank transactions, and the quarterly advance tax you pay, are credited against the total in your return. Enter what you have paid so far to see the balance. Keep the challans and certificates, because FBR only credits tax it can match to your NTN or CNIC.
Frequently asked questions
What are the business income tax slabs for 2026-27?
0% up to Rs 600,000; 15% from Rs 600,000 to Rs 1.2 million; 20% up to Rs 1.6 million; 30% up to Rs 3.2 million; 40% up to Rs 5.6 million; and 45% above that, with fixed amounts carried from each band.
Is this income tax calculator for Pakistan 2026-27 also for salaried people?
Only when salary is 75% or less of taxable income. If salary is more than 75%, the lower salaried table applies and the calculator sends you to the salary tax calculator.
What are AOP tax rates in Pakistan?
AOPs use the same table as non salaried individuals. A professional firm that cannot incorporate pays 40% instead of 45% above Rs 5.6 million. A 10% surcharge applies above Rs 10 million.
How much tax on Rs 50 lakh business income?
Rs 650,000 plus 40% of Rs 1,800,000, which is Rs 1,370,000 in total, an effective rate of 27.4%. No surcharge applies below Rs 10 million.
Is the surcharge 10% of income?
No. It is 10% of the income tax worked out on the slabs, and only when taxable income is more than Rs 10 million.
Do non filers pay higher income tax on business income?
The slab rates are the same. Non filers pay more through higher withholding rates during the year, and they cannot claim those taxes back without filing a return.
When is the return due for tax year 2027?
For individuals and AOPs the normal due date is 30 September after the tax year ends, so 30 September 2027 for income earned from July 2026 to June 2027, unless FBR extends it.
This calculator gives an estimate based on Division I of Part I of the First Schedule and section 4AB of the Income Tax Ordinance 2001 as amended up to 30 June 2026, the Finance Act 2026 and FBR Circular No. 02 of 2026-27. Rates last checked 11 November 2026. It follows the official table exactly, but it does not cover minimum tax, super tax, tax credits, final tax income, AOP share rules or non residents. Your actual tax is what you declare in your return and what FBR assesses. For advice on your own case, ask a tax practitioner.