When you receive a job offer, the number you hear is usually the gross salary. The amount that reaches your bank account is the net salary, also called take-home pay. Knowing the difference helps you plan a budget and compare offers properly.
The basic formula
Net salary = gross salary − deductions + any allowances paid separately.
What gross salary includes
Gross pay is the total before deductions. It often includes basic pay plus allowances such as house rent, medical, conveyance and utilities. Ask the employer for the breakdown, because some allowances are treated differently for tax and for benefits like gratuity or provident fund.
Common deductions
- Income tax on salary, withheld by the employer. The amount depends on your annual taxable income and the slabs for the tax year. See our guide to income tax on salary in Pakistan 2026-27.
- Provident fund contributions, if your employer runs one.
- EOBI or social security, where it applies to your employer.
- Loan or advance recovery and other agreed deductions.
A simple worked example
This example uses made-up round numbers to show the method. Your own figures will differ.
| Item | Rs per month |
|---|---|
| Gross salary | 150,000 |
| Income tax withheld | −8,000 |
| Provident fund (employee share) | −5,000 |
| Loan recovery | −10,000 |
| Net take-home pay | 127,000 |
The gross figure sounds large, but the budget has to be built on Rs 127,000. For this, see our monthly budget guide.
Comparing two job offers
- Compare net pay, not gross pay, after tax.
- Add the value of benefits: medical insurance, provident fund, bonus, fuel or car allowance, and leave.
- Count commute costs and the cost of living in each city.
- Ask whether the salary is quoted per month, per year or “package” (which may include benefits you cannot spend).
Work it out for your own salary
Enter your monthly salary into the free Pakistan Salary Tax Calculator to see the tax and a take-home estimate, and use the Salary Calculator to convert between hourly, daily, monthly and yearly pay.
General information only. Your pay slip and your employer’s payroll team are the final word on your deductions.