The Federal Board of Revenue (FBR) has released the updated withholding tax card for salary income, applicable during the tax year 2025-26. This withholding mechanism is crucial for salaried individuals, as it outlines how tax is to be deducted from salary income by employers throughout the fiscal year.
As per FBR guidelines, any person responsible for making salary payments is legally bound to deduct tax at the time of payment. This deduction is made on the employee’s estimated annual income under the head of “salary,” using the average tax rate applicable for the year. The average rate is calculated using a formula where:
— A represents the total tax payable on the estimated salary income (including any tax under Section 4AB); and
— B is the estimated annual salary income plus any chargeable income under Section 4AB.
Thus, the formula A/B gives the average rate at which the withholding tax on salary income will be computed.
Additionally, adjustments must be made for any tax withheld from other income sources or tax credits claimed under Sections 61 and 63. Employers must also consider any previous excess or deficiency in deductions.
The tax deducted from salary income is adjustable at the time of final return filing.
Below is the official withholding tax slab for salary income for the tax year 2025-26:
| S# | Taxable Income | Rate of Tax |
| 1 | Up to Rs. 600,000 | 0% |
| 2 | Rs. 600,001 to Rs. 1,200,000 | 1% of the amount exceeding Rs. 600,000 |
| 3 | Rs. 1,200,001 to Rs. 2,200,000 | Rs. 6,000 + 11% of amount exceeding Rs. 1,200,000 |
| 4 | Rs. 2,200,001 to Rs. 3,200,000 | Rs. 116,000 + 23% of amount exceeding Rs. 2,200,000 |
| 5 | Rs. 3,200,001 to Rs. 4,100,000 | Rs. 346,000 + 30% of amount exceeding Rs. 3,200,000 |
| 6 | Above Rs. 4,100,000 | Rs. 616,000 + 35% of amount exceeding Rs. 4,100,000 |
This tax structure ensures that individuals with higher salary income contribute proportionally more in taxes. Understanding the salary income tax card is vital for accurate payroll processing and tax compliance.
Disclaimer: The information provided in this article is for general informational purposes only and does not constitute legal, financial, or tax advice. While efforts have been made to ensure the accuracy and reliability of the content, readers are advised to consult the official notifications issued by the Federal Board of Revenue (FBR) or seek professional advice for specific guidance regarding salary income and withholding tax obligations applicable for the tax year 2025-26. The tax rates and policies are subject to change based on government regulations and amendments to the Income Tax Ordinance, 2001.