Preliminary fiscal data shows Pakistan’s salaried workforce contributed Rs630 billion in income tax during FY2025-26, while the government’s latest budget provides significantly larger tax concessions to the real estate sector and small traders.
Pakistan’s salaried workforce remained one of the country’s largest direct taxpayers during the fiscal year 2025-26, contributing an estimated Rs630 billion in income tax—around 127% more than the Rs278 billion collected from the real estate sector through property-related withholding taxes.
Preliminary fiscal estimates indicate that tax payments from salaried employees increased by 4% from Rs606 billion in the previous fiscal year. The total includes book adjustments for federal government employees and the armed forces, with final reconciled figures expected after June accounts are completed.
Despite the higher contribution from wage earners, the federal budget grants substantially greater tax relief to the property market. The government has introduced an estimated Rs115 billion in tax concessions for the real estate sector, while relief for salaried taxpayers is valued at approximately Rs52 billion.
Under the new tax measures, the government has merged three property sale tax slabs into a single 2.75% rate, reducing the previous maximum rate of 5.5%. Withholding tax on property purchases has also been cut from 2.5% to 1.25%, marking the second consecutive annual reduction.
For salaried individuals, the highest 35% income tax bracket will now apply to annual incomes above Rs7 million, compared with the previous threshold of Rs4.1 million. Mid-income tax rates for employees earning between Rs267,000 and Rs583,000 per month have also been reduced by 3%.
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