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Why Your Payslip Tax Differs — The 7 Known Causes

This guide is the prose companion to the Payslip Checker: the same cause library the checker computes with, explained one cause at a time, with the figure each cause produces so you can test your own payslip by hand.

1. EOBI charged on a different minimum-wage base

EOBI is 1% of the minimum wage, and two bases are in live use: Rs 40,700 (contribution Rs 407) and Rs 37,000 (contribution Rs 370). Your payslip matches one of them; the other calculators you tried may have used the other one.

Ask payroll: Ask payroll which minimum-wage notification they apply for EOBI - federal or provincial, and of which date.

2. EOBI computed on your own salary (a known error)

Your payslip EOBI equals 1% of your own gross salary. EOBI is 1% of the minimum wage (Rs 407 or Rs 370 at the current bases), not 1% of your pay - on a Rs 200,000 salary this error overstates EOBI roughly five times. At least one widely used online calculator makes this same mistake, which is how it spreads.

Ask payroll: Show payroll the EOBI rule: 1% of the minimum wage. Ask them to correct the base and refund the excess.

3. An old slab table was used

Your payslip tax matches an older slab table, not the TY2027 table substituted by the Finance Act 2026. Slab rates changed in both 2025 and 2026, so a payroll setup that was never updated keeps deducting at the old rates.

Ask payroll: Ask payroll which tax-year table their system uses for salary withholding, and to re-run your deduction under the TY2027 table.

4. Your new salary was annualised over the full year

After a raise or a mid-year start, some payroll systems project the new monthly salary across all 12 months. That inflates the annual income estimate - and the monthly deduction - compared with your actual year (old salary for part of the year, new salary for the rest). The excess is normally corrected in the final months or on assessment, but the payslip month itself is over-deducted.

Ask payroll: Ask payroll whether your tax is being annualised at the new rate from the raise month, and how they true it up before June.

5. The withdrawn salaried surcharge is still being applied

The 9% surcharge on salaried individuals earning above Rs 10,000,000 (section 4AB) was withdrawn by the Finance Act 2026 (FBR Circular 02 of 2026-27, section 8). Your payslip tax matches TY2027 tax plus that surcharge - a stale rule.

Ask payroll: Point payroll to section 8 of FBR Circular No. 02 of 2026-27: the salaried surcharge no longer applies.

6. Possibly a difference in which allowances are taxed

No rule variant above reproduces your payslip figure exactly. A common remaining cause is scope: your employer may tax an allowance that simple calculators leave out, or exempt one they include. This checker uses your total gross as entered, so it cannot see the split - treat this as a possibility to verify, not a finding.

Ask payroll: Ask payroll for the taxable-income breakdown on your payslip: which allowances were included as taxable, and which were treated as exempt.

7. Other deductions on your payslip are not tax or EOBI

Provident fund, loan repayments and similar items are not income tax or EOBI. They are separated out and excluded from the tax comparison, because mixing them into the tax figure is how most 'my tax looks wrong' gaps appear. (Provident fund note: EPF balances and withdrawals have their own tax treatment - only the amount above the statutory threshold is taxable - which is separate from salary withholding.)

Ask payroll: Check the label of each other deduction on the payslip itself; if one is labelled as tax but does not appear in the tax comparison, ask payroll what it represents.

And when the payslip is right

One outcome deserves its own paragraph: the checker recomputes your tax under the current TY2027 table and it matches to the rupee. Then the discrepancy was never in your payslip — it was in whatever you compared it against: an older calculator, a colleague in a different tax situation, or a guide written for a previous tax year. Keep the FBR circular reference (No. 02 of 2026-27) with your records; it is the document that settles the question again next June, when the table may change once more.