Payroll Tax Plates 2021-22 Pakistan

Here we are going to discuss everything you need to know about calculating income tax according to the last Payroll Tax Bracket Rates 2021-2022 in Pakistan.

Wage income is subject to the following divisions according to general usages and according to the Income Tax Ordinance 2001. Looked:

  • Base salary
  • Housing allowance (HRA)
  • Transportation allowance
  • Medical and other allowances

BASE SALARY

This is a fixed amount of money that you can receive without any additional payments or deductions. It does not include any type of allowances, commissions, bonuses or overtime pay.

HOUSE RENT ALLOWANCE (HRA)

The Housing allowance (HRA) consists of a certain percentage of your gross salary. It is fixed according to the amount of your net salary. Usually, a housing allowance is around 40-50% of your base salary.

TRANSPORT ALLOWANCE

About 10-15% of salaries are allocated to transportation allowances. For example, if you earn 50,000 PKR per month, a transportation allowance of around 5,000 to 7,000 PKR will be included in this amount.

MEDICAL AND OTHER BENEFITS

Many employers offer the medical allowance amount separately. The same applies to other types of allowances such as entertainment allowances, travel allowances and fuel allowances.

According to the income tax plates for the financial year 2021-22, a certain amount of income tax will be deducted from the salaries of people earning more than PKR 600,000/- per year. Previously, this salary bracket was not included in the income tax deduction bracket. Now let’s learn more about the latest tax slab rates in pakistan for fiscal year 2021-22

Taxable income Income tax rate in Pakistan
When the taxable income exceeds Rs. 600,000 but does not exceed Rs. 1,200,000 5% of the amount exceeding Rs. 600,000
When the taxable income exceeds Rs. 1,200,000 but does not exceed Rs. 1,800,000 Rs. 30,000 plus 10% of the amount exceeding Rs. 1,200,000
When the taxable income exceeds Rs. 1,800,000 but does not exceed Rs. 2,500,000 Rs. 90,000 plus 15% of the amount exceeding Rs. 1,800,000
When the taxable income exceeds Rs.2,500,000 but does not exceed Rs. 3,500,000 Rs. 195,000 plus 17.5% of the amount exceeding Rs. 2,500,000
When the taxable income exceeds Rs. 3,500,000 but does not exceed Rs. 5,000,000 Rs. 370,000 plus 20% of the amount exceeding Rs. 3,500,000
When the taxable income exceeds Rs. 5,000,000 but does not exceed Rs. 8,000,000 Rs. 670,000 plus 22.5% of the amount exceeding Rs. 5,000,000
When the taxable income exceeds Rs. 8,000,000 but does not exceed Rs. 12,000,000 Rs. 1,345,000 plus 25% of the amount exceeding Rs. 8,000,000
When the taxable income exceeds Rs. 12,000,000 but does not exceed Rs. 30,000,000 Rs. 2,345,000 plus 27.5% of the amount exceeding Rs. 12,000,000
When the taxable income exceeds Rs. 30,000,000 but does not exceed Rs. 50,000,000 Rs. 7,295,000 plus 30% of the amount exceeding Rs. 30,000,000
When the taxable income exceeds Rs. 50,000,000 but does not exceed Rs. 75,000,000 Rs. 13,295,000 plus 32.5% of the amount exceeding Rs. 50,000,000
When taxable income exceeds Rs. 75,000,000 Rs. 21,420,000 plus 35% of the amount exceeding Rs. 75,000,000]
Payroll Tax Plates 2021-22 in Pakistan
Basic salary
Add: Salary Allowances:
  + House Rent Allowance
  + Conveyance Allowance 
  + Medical Allowance 
  + any other allowance
  --------------------------------------
  Gross income from salary =
  (-) Salary Related Deductions:
  --------------------------------------
  Net income / Taxable Income
  (Tax calculated according to the income tax slabs)

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Esther L. Steinbach