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Jun 30, 2026 2 min read

Pakistan: Finance Act 2026-27 – 1 July 2026

The Federal Budget 2026-27 was presented to the National Assembly on 12 June 2026 by the Finance Minister and was passed by the National Assembly on 23 June 2026 and assented to by the President and officially published in the Gazette of Pakistan (Extraordinary), Part I, on June 26, 2026, after which all measures take legal effect from 1 July 2026 (Tax Year 2027).

The key confirmed payroll impact of the enacted Bill are as under (effective the first July 2026 pay run):

Revised Income Tax Slabs for Salaried Individuals

The revised annual slabs applicable to salary income from 1 July 2026 are:

S. No. Annual Taxable Income (PKR) Rate of Tax
1 Up to 600,000 0%
2 600,001 – 1,200,000 1% of the amount exceeding 600,000
3 1,200,001 – 2,200,000 6,000 + 11% of the amount exceeding 1,200,000
4 2,200,001 – 3,200,000 116,000 + 20% of the amount exceeding 2,200,000
5 3,200,001 – 4,100,000 316,000 + 25% of the amount exceeding 3,200,000
6 4,100,001 – 5,600,000 541,000 + 29% of the amount exceeding 4,100,000
7 5,600,001 – 7,000,000 976,000 + 32% of the amount exceeding 5,600,000
8 Above 7,000,000 1,424,000 + 35% of the amount exceeding 7,000,000

Abolition of Surcharge on Salaried Individuals

The surcharge of 9% of the income tax payable by individuals (including salaried persons) whose income exceeded 10,000,000 in a tax year has been abolished.

Increase in the Minimum Wage

The national minimum monthly wage is raised by 10% (an increase of 3,700), from 37,000 to 40,700 per month. At the date of this revision, the FY2026-27 provincial minimum-wage notifications (Punjab, Sindh, KPK, Balochistan) had not been gazetted.

Please contact your Mercans’ services delivery team for any additional information regarding the implications of the above change.

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Pakistan – Finance Act 2026-27 – 1 July 2026
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