The government is reportedly reviewing salary and pension increases for public employees alongside tax relief measures and major pension reforms ahead of Budget 2026–27.

The Government of Pakistan is reportedly considering a 5% to 10% increase in salaries and pensions for public sector employees as part of the upcoming Budget 2026–27. Officials are also reviewing pension reforms, tax relief proposals, and adjustments aimed at reducing the impact of inflation on workers and retirees.

According to reports, policymakers are discussing:

• a possible 5–10% salary increase for government employees
• pension adjustments linked to inflation trends
• relief for salaried taxpayers through reduced tax pressure
• merging certain ad-hoc allowances into basic pay
• disparity allowances for lower-grade employees (BPS 1–16)
• potential revisions to the minimum wage

The proposals are reportedly being reviewed under IMF-related fiscal constraints, meaning any final increase could remain modest compared to inflation levels. The measures are expected to be finalized before the federal budget is presented in Parliament in June.

Officials have not yet announced a final decision, and the proposals must still receive cabinet approval before becoming part of the official budget package.

Disclaimer:

The salary, pension, and tax measures remain under consideration and have not yet been officially approved. Final figures may change before the presentation of the federal budget.