Calculate Income Tax on Salary (2024-2025)
The Salary Tax Calculator is specifically designed to help salaried individuals calculate their income tax based on the latest tax rates from the 2024-2025 Budget. These rates are applicable for the period from July 2024 to June 2025 and take into account all allowances, perquisites, and taxable income sources as outlined in the new tax regulations.
This easy-to-use tool enables you to estimate your monthly and annual tax liabilities based on your salary and additional benefits such as bonuses, commissions, rent-free accommodation, utilities, and more. It's an essential resource for salaried employees looking to manage their tax obligations efficiently and stay compliant with Pakistan's taxation rules.
💼 Salary Tax Calculator
What Constitutes Salary As Per Income Tax Ordinance of Pakistan?
When calculating income tax on salary, it's essential to understand what is included in the term "salary" according to the latest tax rules. Salary refers to any amount received by an employee from their employment, whether it's revenue-based or capital in nature. It includes various components, each of which affects the overall taxable income. Here's a breakdown:
- Basic Pay, Wages, and Other Remuneration: This includes your regular salary, leave pay, overtime, bonuses, commissions, fees, gratuity, and any work condition supplements (e.g., for unpleasant or hazardous working conditions).
- Perquisites: Any benefit or advantage, whether convertible into money or not, provided by the employer. These may include the use of a company car, rent-free accommodation, or other perks.
- Allowances: Any allowance provided by the employer, such as for cost of living, rent, utilities, education, entertainment, or travel. Note that allowances expended solely for work purposes may be excluded from taxable income, but:
- Allowances paid monthly or as a percentage of salary are taxable.
- Any allowance not wholly, exclusively, and necessarily spent for employment duties is taxable.
- Reimbursed Expenditure: If your employer reimburses any of your expenses other than those incurred exclusively for employment duties, these amounts will also be included in your taxable salary.
- Profits in Lieu of Salary: This includes:
- Payments for entering or amending employment agreements, restrictive covenants, or any other employment-related arrangements.
- Termination payments, including golden handshakes.
- Amounts received from provident funds, except for employee contributions that were not tax-deductible.
- Pensions and Annuities: Any pension or annuity payments, or supplements to these payments, received from your employer are considered part of your taxable salary.
- Employee Share Schemes: Any gain earned under an Employee Share Scheme is taxable.
- Employer-Borne Taxes: If your employer pays the tax on your salary on your behalf, the amount of tax paid is also considered part of your salary for tax purposes.
By using the Salary Tax Calculator, you can easily estimate your monthly and annual taxable income, helping you plan better and avoid any surprises when filing your tax returns. Stay informed and ensure compliance with the latest tax regulations to make the most of your earnings while meeting your tax obligations.