Free Salary Calculator in Pakistan (2026)

What's Included

Everything you need to build a Pakistan offer

Basic Salary Builder

Start with a basic salary and build a full package using a market-standard Pakistan allowance structure. Set the foundation before layering in housing, transport, medical, and other components.

Housing & Transport

Auto-apply Pakistan market norms for housing (25 to 35% of basic) and transport allowances. Adjust to match your company policy or offer structure.

Pakistani & Expat Modes

Toggle between Pakistani national and expatriate packages. Social security and EOBI contributions apply automatically for Pakistani nationals, keeping your calculations compliant.

Income Tax Calculation

Pakistan applies a progressive income tax ranging from 0% to 35%. See the accurate net take-home amount your candidates will receive after all applicable deductions.

How It Works

Three steps to a confident offer

Enter Basic Salary

Input the basic salary and select the employee nationality.

Configure Allowances

Adjust housing, transport, and other allowances to match your offer structure.

Get Full Breakdown

Instantly see gross salary, deductions, net salary, and annual compensation.

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What Is Basic Salary?

Basic salary is the fixed component of an employee's pay before any allowances, deductions, or overtime are added. It serves as the reference point for calculating income tax, social security contributions, EOBI deductions, and end-of-service gratuity. Employers in Pakistan use the basic salary to determine statutory obligations under the Employment Laws.

What Is an Allowance?

Allowances are additional payments made by employers to cover specific employee needs such as housing, transport, medical, or utility expenses. In Pakistan, allowances form a significant portion of the total compensation package and can also affect the income tax calculation depending on whether they are considered taxable or exempt under the Income Tax Ordinance.

What Is Overtime?

Overtime refers to the extra payment an employee receives for working beyond the standard working hours. In Pakistan, the standard working week is 48 hours across six days. Overtime is paid at 2x the basic hourly rate for hours worked beyond the standard limit. Overtime rules are governed by the Factories Act and provincial labour laws.

What Are Deductions?

Deductions in Pakistan include income tax, social security contributions, and EOBI (Employees Old-Age Benefits Institution) contributions. Income tax applies to all employees earning above the tax-exempt threshold. Social security and EOBI contributions apply to Pakistani Nationals and are calculated on fixed monthly amounts rather than percentages of gross salary.

What Is EOBI and Social Security?

EOBI (Employees Old-Age Benefits Institution) provides pension and old-age benefits to registered employees. Employees contribute PKR 370 per month (fixed) while employers contribute 5% of the minimum wage. Social security contributions vary by province. In Punjab, for example, employees contribute PKR 40 per month while employers contribute 6% of gross wages up to a specified ceiling. Both schemes apply to Pakistani Nationals only.

How to Manage Payroll in the Pakistan

Managing payroll in Pakistan requires compliance with federal and provincial labour laws, the Income Tax Ordinance 2001, and EOBI regulations. Key aspects include:

Adhering to Pakistan Labour Laws: Ensure compliance with overtime rules, leave entitlements, and gratuity calculations under applicable provincial laws.
Calculating Income Tax Correctly: Pakistan uses a progressive tax system from 0% to 35%. Salaried individuals are taxed differently from non-salaried, and tax rates are updated annually in the federal budget.
Tracking EOBI and Social Security: Mandatory for Pakistani Nationals. EOBI employer contribution is 5% of minimum wage. Social security rates vary by province.
Managing Allowances Carefully: Some allowances such as medical and conveyance may be partially or fully exempt from income tax, reducing the overall tax liability of the employee.

How Much Tax Is Applied on Salary in Pakistan?

Pakistan applies a progressive income tax on salaried individuals. The tax slabs are revised annually in the Federal Budget. For the 2025-26 tax year, the applicable slabs for salaried persons are as follows:

0% on annual income up to PKR 600,000
5% on income between PKR 600,001 and PKR 1,200,000
15% on income between PKR 1,200,001 and PKR 2,200,000
25% on income between PKR 2,200,001 and PKR 3,200,000
30% on income between PKR 3,200,001 and PKR 4,100,000
35% on income above PKR 4,100,000

Minimum Wage in Pakistan

Pakistan's minimum wage is set at the federal level and revised periodically, with provinces also empowered to set their own minimum wages. The current federal minimum wage stands at PKR 37,000 per month. Provinces such as Punjab and Sindh have set their own minimums at comparable or slightly higher levels. This applies to Pakistani Nationals in the formal sector. For expatriates, wages are determined entirely by employment contracts.

Average Net Salary in Pakistan

Average net salaries in Pakistan vary widely by industry, city, and seniority. For professional roles, monthly net salaries typically range between PKR 80,000 to PKR 250,000 after tax and deductions. Karachi, Lahore, and Islamabad tend to offer the highest compensation levels. Industries such as technology, banking, telecommunications, and multinational corporations generally offer the most competitive packages, particularly when allowances for housing, fuel, and medical are included.

Your Questions Answered

What is the EOBI contribution rate for employers in Pakistan?

Employers in Pakistan are required to contribute 5% of the applicable minimum wage per employee per month to the Employees Old-Age Benefits Institution (EOBI). The employee contribution is a fixed amount of PKR 370 per month. EOBI applies to Pakistani Nationals working in registered organisations with five or more employees.

Are housing and transport allowances taxable in Pakistan?

Under the Income Tax Ordinance, certain allowances are partially or fully exempt from tax. A conveyance allowance used solely for official duties and a medical allowance up to 10% of basic salary are generally considered exempt. Housing allowances, however, are typically treated as taxable income and included in the gross salary for tax calculation purposes.

How is gratuity calculated in Pakistan?

Gratuity in Pakistan is not universally mandated by federal law but is commonly provided under company policy or industry practice. Where applicable, it is typically calculated at one month of last drawn basic salary per year of completed service. Some employers follow the Gratuity Fund Rules under the Income Tax Ordinance, which also provides tax benefits for employer contributions.

What is the difference between gross salary and net salary in Pakistan?

Gross salary in Pakistan is the total compensation before any deductions, including all allowances. Net salary is what the employee actually receives after deducting income tax, EOBI contributions, social security contributions, and any other agreed deductions. The gap between gross and net can be significant for higher earners due to the progressive tax structure that goes up to 35%.

How often are income tax slabs updated in Pakistan?

Income tax slabs for salaried individuals in Pakistan are reviewed and updated annually as part of the Federal Budget, typically announced in June each year. This means the effective tax rate for a given salary can change from one financial year to the next. Employers and payroll teams should update their calculations at the start of each new tax year, which runs from July 1 to June 30 in Pakistan.

Pakistan Salary Calculator 2026

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