ISLAMABAD: In a significant move to provide financial relief to its workforce, federal government of Pakistan has announced a comprehensive package of measures for employees as well as pensioners in the Budget 2026-27, effective from July 1, 2026.
The relief package, which includes new pay scales, increased allowances, and a 7% rise in pensions, reflects the government’s commitment to addressing the economic concerns of those who serve the nation.
The most notable announcement is the introduction of New Pay Scales-2026, which will be formed by merging the Adhoc Relief Allowance-2022 (15% of basic pay) and Adhoc Relief Allowance-2025 (10% of basic pay). This restructuring is expected to provide a substantial and permanent boost to the salaries of all federal government employees.
وزیراعظم محمد شہباز شریف کی قیادت میں عوام دوست اور متوازن معاشی پالیسیوں کا سلسلہ جاری ہے۔
بجٹ 2026-27 میں تنخواہ دار طبقے کو نمایاں ریلیف فراہم کرتے ہوئے 22 سے 32 لاکھ روپے آمدن پر انکم ٹیکس 23 فیصد سے کم کر کے 20 فیصد، 32 سے 41 لاکھ روپے پر 30 فیصد سے 25 فیصد، 41 سے 56 لاکھ… pic.twitter.com/BQ2VPH1zed
— PMLN Punjab (@PMLNPunjabPk) June 12, 2026
In addition to the new scales, the government has approved a 7% Ad-hoc Relief Allowance (ARA) on the running basic pay for all federal government employees. Furthermore, a Disparity Reduction Allowance-2026 of 15% of basic pay (as of June 30, 2022) will be extended to employees in BPS-1 to 22, continuing the existing terms for those already receiving this allowance.
Pensioners have also not been forgotten. In a move that will bring smiles to millions of retired employees and their families, the government has approved a 7% increase in baseline pensions, in line with the Finance Division’s notification dated July 7, 2025. This increase will help pensioners cope with rising inflation and maintain their standard of living.
Several other allowances have been revised upward significantly. The Constant Attendant Allowance for Civil Armed Forces has been increased from a meager Rs.7,000 to Rs.30,000 per month, a more than fourfold increase. Similarly, the Special Allowance for National Highway and Motorway Police (NH&MP) employees in BS-1 to 22 has been raised from 10% to 50% of running basic pay as of June 30, 2025.
The Conveyance Allowance rate has been increased by 50% of the existing amount, while the Special Conveyance Allowance has been revised from Rs.6,000 to Rs.10,000. Employees of the Immigration and Passport Department will receive a 100% IMPAS Allowance on running basic pay as of June 30, 2026, which will stand frozen thereafter.
The Special NPA Allowance for officers posted at the National Police Academy has been set at 50% of running basic pay.
Additionally, the Special Area Compensatory Allowance (SACA) for troops of the Pakistan Coast Guards has been revised to 10% of BPS 2015, aligning it with the allowance paid to Frontier Corps, Balochistan. The Executive Allowance for officers and staff of the Cabinet and Cabinet Committees wings of the Cabinet Division has been increased from Rs.6,000 to Rs.20,000 per month.
