VPS Tax Saving Calculator 2026-27
How much tax a Voluntary Pension System contribution saves you this year, the most that counts, and what the account could grow to.
Putting Rs 20,000 a month into a VPS cuts your tax by about Rs 15,600 this year, so it really costs you Rs 224,400.
- You pay 93.5%
- Tax saved 6.5%
Your pension account over time
| When | You put in | Estimated value |
|---|---|---|
| Age 35 | Rs 1,200,000 | Rs 1,649,727 |
| Age 40 | Rs 2,400,000 | Rs 4,646,782 |
| Age 45 | Rs 3,600,000 | Rs 10,091,520 |
| Age 50 | Rs 4,800,000 | Rs 19,982,958 |
| Age 55 | Rs 6,000,000 | Rs 37,952,702 |
| Age 60 | Rs 7,200,000 | Rs 70,598,275 |
Source: Income Tax Ordinance 2001, section 63 and Second Schedule clause (23A); Finance Act 2026 slabs
How the VPS tax credit works
Under section 63 of the Income Tax Ordinance, money you put into an approved pension fund earns a tax credit at your average tax rate, on contributions of up to 20% of your taxable income. The calculator uses the 2026-27 salary slabs to work out your average rate and the credit.
The saving grows with your salary, because the credit is worked out at your own tax rate. Worked examples, how to open an account and the withdrawal rules are in the VPS guide.
What the projection shows
The pension account value assumes you keep paying the same amount every month until you retire, at the yearly return you enter. It is an estimate, not a promise. The “today’s money” figure shows what that amount would buy at today’s prices, using the latest PBS inflation rate.
At retirement you can take up to 50% as tax-free cash. The rest buys an annuity or goes into an income payment plan.
For the full explanation, including when you can withdraw and when VPS is not worth it, read VPS in Pakistan, explained.