The causes of poverty and inequality are complex and multidimensional, based on diverged social, economic, political and demographic shifters. In a country like Pakistan, people generally are deprived of health, education, clothing, housing and human rights. Therefore, it is the need of hour to determine factors affecting the household poverty and inequality. This study presents the facts and figures associated with the household poverty and inequality level using data set of PSLM 2008-09. On the base of consumption expenditures; 34.6%, 40.2% and 25.2% households were considered as chronic, transient, and non-poor respectively. Poverty line was constructed by converting the 1.25 USD into domestic currency by using the average exchange rate of 2008-09. The Results of the Multinomial logit model revealed that land and Livestock as an asset, male headed households, middle level of education, employment status and woman empowerment significantly reduced the chances of transient poverty. Income distribution is deteriorated in this time period by increasing the gulf between the lower and upper income households.