How to Calculate Your Net Monthly Income After Tax

Your offer letter says one number. Your bank balance shows another. Here's exactly how the gap between "gross salary" and "what actually lands in your account" is calculated in Pakistan, so you can do it yourself — or just double-check what our calculator gives you.

The Steps

1. Start with your gross monthly salary

   This is your full salary before any deductions — the number in your offer letter or employment contract.

2. Annualize it

   Multiply by 12. FBR's tax slabs are annual, so income tax is calculated on your yearly figure, then divided back down to a monthly withholding amount.

3. Apply the correct tax slab

   Find which of the eight FY 2026-27 slabs your annual income falls into, and apply that slab's formula — each slab only taxes the portion of income within that band, not your whole salary at one rate.

4. Divide the annual tax by 12

   This gives you the amount withheld from your pay each month.

5. Subtract any other deductions

   Provident Fund contributions, EOBI's fixed employee share, and any other employer-specific deductions come off separately, after income tax.

A Worked Example

Say your gross monthly salary is Rs. 250,000. Here's how it plays out for FY 2026-27:

This falls in the Rs. 2,200,000–3,200,000 slab: Rs. 116,000 plus 20% of the Rs. 800,000 that's over the Rs. 2.2M threshold. This is exactly why doing it by hand is easy to get slightly wrong, and why a calculator that shows its work is worth using.

Common Mistakes People Make

Applying one slab rate to the whole salary. Pakistan's tax system is progressive — only the portion of income inside each band is taxed at that band's rate. A common error is multiplying total annual income by the top applicable rate, which overstates the tax owed significantly.

Forgetting bonuses count too. Bonuses and most allowances are taxed as part of your annual salary income in the year received, at the same slab rates — they don't get a separate, lower "bonus rate."

Ignoring EOBI's actual basis. If your employer deducts an EOBI contribution, it's calculated on the federal minimum wage, not your actual salary — so it's a fixed amount (currently Rs. 407/month for the employee share) regardless of how much you earn.