People usually notice salary after tax at the same moment: when the credited amount in the bank is lower than the number they had in mind.
The offer letter may say one figure. The gross salary section on the payslip may show another. But the amount that actually lands in your account can feel smaller than expected.
That final amount is your net salary, often called salary after tax.
Quick definition
Gross salary is the full salary before deductions. Net salary is what you receive after salary tax and other payroll deductions.
Table of Contents
Gross salary vs net salary
Gross salary
The total salary package before deductions like income tax, provident fund, or other payroll items.
Net salary
The final amount actually credited after tax and other deductions are taken out.
“Gross salary is what the employer promises. Net salary is what the employee experiences.”
Why salary changes after tax in Pakistan
The biggest reason is usually income tax deducted at source by the employer, but tax is not the only item that can affect the final number.
- Income tax under FBR salaried slabs
- Provident fund or EOBI contributions
- Medical allowance treatment
- Loan deductions or company recoveries
- Zakat in relevant cases
Common deductions that affect take-home pay
Income tax
This is the most visible deduction for salaried workers. It is estimated based on annual taxable income, then often spread into monthly payroll deductions.
Provident fund
Some employers deduct employee provident fund contributions directly from salary, which lowers immediate take-home pay.
Medical allowance treatment
If medical allowance is structured correctly, a portion may be exempt and reduce taxable salary.
Practical examples of salary after tax
| Gross monthly salary | Estimated monthly tax | Estimated salary after tax |
|---|---|---|
| Rs. 100,000 | Around Rs. 500 | Around Rs. 99,500 |
| Rs. 150,000 | Around Rs. 6,000 | Around Rs. 144,000 |
| Rs. 200,000 | Around Rs. 12,900 | Around Rs. 187,100 |
These are simplified examples before extra deductions like provident fund or company-specific adjustments.
Common mistakes when people estimate net salary
- Using only monthly salary without converting it into annual taxable income.
- Assuming every deduction on the payslip is income tax.
- Ignoring allowance exemptions that may lower taxable salary.
- Using outdated slab rates.
Use the calculator
Want your net salary instantly?
Use our Pakistan Salary Tax Calculator to estimate salary after tax using the latest FBR slabs.