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In Pakistan, healthcare utilization is linked to out-of-pocket payments (OOP) which disproportionately affect low-income households. The study investigated socioeconomic inequality in OOP and catastrophic health expenditures (CHEs), and the contribution of sociodemographic factors to these inequalities. It was found that poor households experience high CHE, disproportionately impacting larger families with children and elderly members. Policymakers should implement targeted financial protection strategies to safeguard vulnerable households from the impoverishing effects of healthcare expenses.