Tax Rates for Individuals (Tax Year 2024)

Understanding your tax obligations is crucial for responsible financial planning. This article dives into the tax rates for individual taxpayers in Pakistan for the tax year 2024, categorized into salaried and non-salaried earners. We'll provide a clear breakdown of the tax slabs and analyze the applicable percentages.

Tax Slabs for Non-Salaried Taxpayers (Individuals and AOPs)

Non-salaried taxpayers in Pakistan, including business owners, freelancers, and individuals with income from investments, are subject to progressive tax slabs. This means the tax rate increases as your taxable income rises.

Here's the tax slabs for non-salaried taxpayers:

Taxable Income (PKR) Rate of Tax

Up to 600,000 0%

600,000 - 800,000 7.5% of the amount exceeding PKR 600,000

800,000 - 1,200,000 PKR 15,000 + 15% of the amount exceeding PKR

800,000

1,200,000 - 2,400,000 PKR 75,000 + 20% of the amount exceeding PKR 1,200,000

2,400,000 - 3,000,000 PKR 315,000 + 25% of the amount exceeding PKR 2,400,000

3,000,000 - 4,000,000 PKR 465,000 + 30% of the amount exceeding PKR 3,000,000

Above 4,000,000 PKR 765,000 + 35% of the amount exceeding PKR 4,000,000

Tax Slabs for Salaried Taxpayers

Salaried taxpayers in Pakistan benefit from slightly lower tax rates compared to non-salaried earners, provided their salary income makes up at least 75% of their total taxable income. Here's a table summarizing the tax slabs for salaried individuals:

Taxable Income (PKR) Rate of Tax

Up to 600,000 0%

600,000 - 1,200,000 2.5% of the amount exceeding PKR 600,000

1,200,000 - 2,400,000 PKR 15,000 + 12.5% of the amount exceeding PKR 1,200,000

2,400,000 - 3,600,000 PKR 165,000 + 22.5% of the amount exceeding PKR 2,400,000

3,600,000 - 6,000,000 PKR 435,000 + 27.5% of the amount exceeding PKR 3,600,000

Above 6,000,000 PKR 1,095,000 + 35% of the amount exceeding PKR 6,000,000

Analysis of Tax Percentages

As you can see above, the tax rates for non-salaried taxpayers start at 0% for income up to PKR 600,000 and gradually increase with each tax slab. The highest marginal tax rate for non-salaried individuals is 35%, applicable to income exceeding PKR 4,000,000.

Salaried taxpayers enjoy a slightly lower tax burden. Their tax rates begin at 0% and reach a maximum of 35% for income exceeding PKR 6,000,000. However, this benefit applies only if their salary makes up at least 75% of their total taxable income.

This article was published at Tax Rates for Individuals (Tax Year 2024)