"Will my raise push me into a higher tax bracket?"
It's one of the most common worries we hear, usually around appraisal season. The short answer: yes, it might, and that's fine. Pakistan's tax is progressive by slab. Moving into a higher slab only affects the part of your salary inside that slab. The rest is taxed exactly as before.
So if your raise takes you from the 11% slab into the 20% slab, only the rupees above Rs 2,200,000 a year are taxed at 20%. Everything below stays at its old rate. Your take-home pay goes up. It just goes up a bit less than the gross figure.
What a 15% raise is really worth
| Current salary | New salary | Gross raise | Raise after tax | Share you keep |
|---|---|---|---|---|
| Rs 100,000 | Rs 115,000 | Rs 15,000 | Rs 13,350 | 89% |
| Rs 150,000 | Rs 172,500 | Rs 22,500 | Rs 20,025 | 89% |
| Rs 250,000 | Rs 287,500 | Rs 37,500 | Rs 28,958 | 77.22% |
| Rs 400,000 | Rs 460,000 | Rs 60,000 | Rs 42,600 | 71% |
The pattern is clear. Lower down the scale you keep almost all of a raise. Higher up, more of each extra rupee goes to tax, but you still keep the larger share.
Thinking about inflation
A raise that matches inflation keeps your spending power where it was, at least before tax. After tax, it might fall slightly short. If prices rose 10% and your gross salary rose 10%, your take-home may have risen only 8 or 9%, because part of the raise moved into a higher slab. That's worth knowing when you negotiate. Ask for a raise that covers inflation after tax, not just before.
Increments mid-year
Most companies in Pakistan give increments in July or January. If yours comes in January, your employer recalculates the yearly tax from that month. You'll see a jump in the monthly deduction from January onwards, sometimes bigger than this calculator shows, because the employer is catching up on six months at the new rate. By June it evens out.
Promotions with allowances
A promotion often comes with new allowances, like a car, fuel or a bigger house rent allowance. Most of these are taxable as part of salary. A company car used for both work and personal travel is valued at a percentage of its cost and added to your taxable income. When you compare the raise, include the taxable value of any new perks, or you'll underestimate the tax.
Bonus or increment?
A one-off bonus is taxed the same way as salary, so it pushes up your tax for that year only. An increment raises your salary permanently and affects every year after. If your employer offers a choice, the increment is usually worth more in the long run, even if the bonus looks bigger on paper.
Using the result in a conversation with HR
It's fine to tell your manager the net figure you're aiming for. Use the reverse salary calculator to turn that target into a gross number, then use this tool to check what any offered increment gives you in hand.
Quick rule of thumb
Look at the slab your new salary lands in. Subtract that slab's rate from 100%, and that's roughly how much of each extra rupee you keep. In the 11% slab you keep 89 paisa of every new rupee, in the 25% slab 75 paisa, and in the 35% slab 65 paisa.
Related calculators
- Job offer comparison calculator, if a raise elsewhere is on the table.
- Multi-year salary tax calculator, to see your tax over several years of raises.
Frequently asked questions
Can a raise reduce my take-home pay?
No. Under Pakistan's slab system only income above each threshold is taxed at the higher rate, so a raise always increases your take-home pay.
How much of a Rs 20,000 raise will I keep?
It depends on your slab. If your new salary stays in the 11% slab, you keep Rs 17,800. In the 25% slab you keep Rs 15,000. Enter your numbers above for the exact figure.
Why did my tax jump more than expected after my increment?
If the increment came mid-year, your employer spreads the extra tax over the remaining months, so the monthly deduction rises more for a while.
Are allowances included?
Enter your total taxable salary including taxable allowances. Exempt items should be left out.
Rates: Income Tax Ordinance 2001 and its schedules as amended by the Finance Act 2026, plus FBR's withholding tax rate card for Tax Year 2027. Results are estimates. Check with FBR or a tax adviser before acting on them.