# Government salary increase 2026-27: pay rise by grade, new pay scales and pensions URL: https://which.pk/business/guides/salary-increase-2026/ Author: Ahtisham Updated: 22 Oct 2026 ## Summary Federal government employees get a 7% Ad-hoc Relief Allowance on the new Basic Pay Scales-2026 from 1 July 2026, under the Finance Division's office memorandum of 21 July 2026. BPS-2026 merges the 2022 and 2025 relief allowances into basic pay. Conveyance allowance rose 50% and the minimum gross salary rose to Rs 40,700. Federal pensions rose 7%. Sindh notified the same 7% allowance; KP and Balochistan announced 7%, and Punjab proposed 7% pay and 3.5% pension. ## Key facts - Federal pay rise: 7% ARA-2026 - Federal pension rise: 7% - Effective from: 1 Jul 2026 - Conveyance allowance: Up 50% The government salary increase for 2026 in Pakistan is **7%** for federal employees, paid as an Ad-hoc Relief Allowance (ARA-2026) on new **Basic Pay Scales-2026** from **1 July 2026**. The Finance Division notified it on 21 July 2026. Federal pensions also rose **7%**. Sindh notified the same 7% allowance, KP and Balochistan announced 7%, and Punjab proposed 7% for pay and 3.5% for pensions. **Federal salary increase 2026-27:** 7% of BPS-2026 basic pay (Ad-hoc Relief Allowance-2026, from 1 July 2026. Finance Division O.M. No. F.1(2)IMP/2026, 21 July 2026.) ## Salary increase 2026 Pakistan: federal and provincial raises | Government | Pay | Pension | What we found | |---|---|---|---| | Federal | 7% ARA-2026 | 7% | Notified 21 and 29 Jul 2026 | | Sindh | 7% ARA-2026 | 7% | Pay notified 22 Jul 2026; pension from budget coverage | | Khyber Pakhtunkhwa | 7% ARA-2026 | 7% | New pay scales notified, TechJuice reports; pension from budget coverage | | Balochistan | 7% | 7% | Budget coverage (APP, 17 Jun 2026) | | Punjab | 7% proposed | 3.5% proposed | Budget coverage (Dawn, 17 Jun 2026) | We read the federal and Sindh notifications on the finance departments' own websites. We couldn't open Punjab's finance department website, so Punjab's figures come from its budget speech as Dawn reported it. ## What does the 2026 salary increase notification say? The Finance Division's office memorandum (OM) No. F.1(2)IMP/2026 of **21 July 2026** applies to federal civil employees, including civilians paid from defence estimates: - **New pay scales.** Basic Pay Scales (BPS)-2026 replace BPS-2022 from 1 July 2026. They are made by **merging ARA-2022 and ARA-2025 into basic pay**, so those two allowances stop. - **The raise.** ARA-2026 is **7% of your running basic pay** in BPS-2026, also for contingent paid staff and contract employees in pay scales. - **Frozen allowances.** House rent and other allowances paid as a percentage of pay are frozen at their 30 June 2026 level. A 4 August 2026 clarification adds that ARA-2023 and ARA-2024 are frozen too. - **Your option.** You had 30 days from the OM to choose BPS-2022 or BPS-2026 in writing. If you didn't choose, you are on BPS-2026. - **Increments** still come on 1 December each year. ARA-2026 is taxable and **does not count for pension or gratuity**. **Other federal changes from 1 July 2026:** Conveyance allowance rose 50% (OM of 21 July 2026). Disparity Reduction Allowance-2026 is 15% of basic pay as on 30 June 2022, for those who already get it. The minimum gross salary for federal employees rose from Rs 37,000 to Rs 40,700; anyone below it gets the difference as a Special Allowance (OM of 21 August 2026). ## Salary increase chart 2026: new basic pay by grade Minimum and maximum basic pay in the federal BPS-2026, with ARA-2026 at the minimum of each grade. The ARA column is our calculation (7% of the minimum). | BPS | BPS-2022 minimum | BPS-2026 minimum | Annual increment | BPS-2026 maximum | ARA-2026 at minimum | |---|---|---|---|---|---| | 1 | Rs 13,550 | Rs 16,280 | Rs 520 | Rs 31,880 | Rs 1,140 | | 5 | Rs 15,230 | Rs 18,300 | Rs 910 | Rs 45,600 | Rs 1,281 | | 7 | Rs 16,310 | Rs 19,590 | Rs 1,100 | Rs 52,590 | Rs 1,371 | | 9 | Rs 17,470 | Rs 20,990 | Rs 1,310 | Rs 60,290 | Rs 1,469 | | 11 | Rs 18,650 | Rs 22,410 | Rs 1,580 | Rs 69,810 | Rs 1,569 | | 14 | Rs 22,530 | Rs 27,060 | Rs 2,090 | Rs 89,760 | Rs 1,894 | | 15 | Rs 23,920 | Rs 28,730 | Rs 2,380 | Rs 1,00,130 | Rs 2,011 | | 16 | Rs 28,070 | Rs 33,720 | Rs 2,720 | Rs 1,15,320 | Rs 2,360 | | 17 | Rs 45,070 | Rs 54,140 | Rs 4,110 | Rs 1,36,340 | Rs 3,790 | | 18 | Rs 56,880 | Rs 68,330 | Rs 5,120 | Rs 1,70,730 | Rs 4,783 | | 19 | Rs 87,840 | Rs 1,05,510 | Rs 5,450 | Rs 2,14,510 | Rs 7,386 | | 20 | Rs 1,02,470 | Rs 1,23,090 | Rs 8,040 | Rs 2,35,650 | Rs 8,616 | | 21 | Rs 1,13,790 | Rs 1,36,680 | Rs 8,920 | Rs 2,61,560 | Rs 9,568 | | 22 | Rs 1,22,190 | Rs 1,46,770 | Rs 10,470 | Rs 2,93,350 | Rs 10,274 | BPS-2026 minimums are about 20% above BPS-2022 at every grade in the table. That rise takes the place of ARA-2022 and ARA-2025, which stopped on 1 July 2026, so it isn't all new money. Your pay moves **point to point**: you sit at the same stage of BPS-2026 that you held in BPS-2022. ## Worked example: how much more does a BPS-16 employee get? Take a federal BPS-16 employee at the first stage of the scale. The parts of pay that the July 2026 OMs change: So this employee gets about **Rs 4,860 a month more** from ARA-2026 and conveyance together, before tax. The full conveyance table is BPS 1-4: Rs 2,678; BPS 5-10: Rs 2,898; BPS 11-15: Rs 4,284; BPS 16 and above: Rs 7,500 a month. To see the tax on your new salary, use our [salary tax calculator](/business/tools/salary-tax-calculator/). The 2026-27 slabs are in [income tax slabs 2026-27](/business/guides/income-tax-slabs-2026-27/). ## Did pensions increase in 2026? Yes. The Finance Division's OM of **29 July 2026** gives federal pensioners **7% on baseline pension** from 1 July 2026. It covers civil pensioners, civilians paid from defence estimates, and retired armed forces and civil armed forces personnel. It also applies to family pension and to people retiring on or after 1 July 2026. Since 2025, the baseline pension is your net pension at retirement, and each increase is kept as a separate amount. Our guide to [how government pension is calculated](/money/guides/government-pension-pakistan/) explains the formula and commutation. ## Sindh salary increase 2026 Sindh's Finance Department OM of **22 July 2026** follows the federal pattern. Sindh BPS-2026 merges ARA-2022 and ARA-2025 into basic pay, and ARA-2026 is **7% of running basic pay** from 1 July 2026, also for contingent and contract staff. Sindh's ARA-2025 had been 12% for BPS-1 to 16 and 10% for BPS-17 to 22. Dunya News reported a 7% pension increase in the Sindh budget. ## Punjab, KP and Balochistan - **Punjab** proposed a **7% pay rise and 3.5% pension increase** in its budget on 16 June 2026, Dawn reported. We couldn't check Punjab's notification. - **KP** notified new pay scales from 1 July, merging two earlier relief allowances into basic pay, with a fresh **7% ARA-2026**, TechJuice reports. KP's budget also announced 7% for pensions. - **Balochistan** raised salaries and pensions **7%** "on the federal model", APP reported on 17 June 2026. Provincial employees should check their own finance department's notification before working out arrears. ## Is the minimum wage part of the salary increase? Not directly. The federal minimum gross salary for government employees rose to Rs 40,700, but minimum wages for private workers are set separately by each province. See our guide to the [minimum wage in Pakistan](/business/guides/minimum-wage-pakistan/). More guides: [salary tax calculator](/business/tools/salary-tax-calculator/), [government pension](/money/guides/government-pension-pakistan/), [minimum wage 2026-27](/business/guides/minimum-wage-pakistan/), [Business & Trade](/business/). ## Questions people ask ### How much did government salaries increase in 2026? Federal employees get a 7% Ad-hoc Relief Allowance on their new BPS-2026 basic pay from 1 July 2026. Sindh, KP and Balochistan also gave or announced 7%, and Punjab proposed 7% in its budget. ### Where is the salary increase notification 2026? The federal one is Finance Division O.M. No. F.1(2)IMP/2026 dated 21 July 2026, on the circulars page of finance.gov.pk. Sindh's is No. FD(SR-I)08(01)/2026-27 dated 22 July 2026. ### Did pensions increase in 2026-27? Yes for federal pensioners: 7% on baseline pension from 1 July 2026, under the Finance Division's office memorandum of 29 July 2026. Punjab proposed 3.5%, and Sindh, KP and Balochistan announced 7%. ### Is the ad-hoc relief allowance counted for pension? No. The office memorandum says ARA-2026 is not treated as emoluments for pension or gratuity. It is also taxable. ## Sources - [O.M. No.F.1(2)IMP/2026: Revision of Basic Pay Scales and Allowances of Civil Servants 2026 (21 Jul 2026)](https://www.finance.gov.pk/circulars/REVISION_OF_BASIC_PAY_SCALES_2026.pdf), Finance Division (accessed 22 Oct 2026) - [O.M. No.F.1(2)IMP/2026-0004: Clarification regarding revision of Basic Pay Scales 2026 (4 Aug 2026)](https://www.finance.gov.pk/circulars/circular_04082026.pdf), Finance Division (accessed 22 Oct 2026) - [O.M. No.4(1)/REG.6/2026: Grant of increase in pension (29 Jul 2026)](https://www.finance.gov.pk/circulars/circular_29072026.pdf), Finance Division (accessed 22 Oct 2026) - [O.M. No.3(1)R-5/2010-P-001: Revision in the rates of conveyance allowance (21 Jul 2026)](https://www.finance.gov.pk/circulars/REVISION_IN_THE_RATES_OF_CONVEYANCE_ALLOWANCE_BPS_1_22.pdf), Finance Division (accessed 22 Oct 2026) - [O.M. No.14(2)R-3/2025: Grant of Disparity Reduction Allowance-2026 (21 Jul 2026)](https://www.finance.gov.pk/circulars/GRANT_OF_DISPARITY_REDUCTION_ALLOWANCE_2026.pdf), Finance Division (accessed 22 Oct 2026) - [O.M. No.1(2)R5/2022-PT-0001: Revision of Special Allowance (21 Aug 2026)](https://www.finance.gov.pk/circulars/circular_21082026.pdf), Finance Division (accessed 22 Oct 2026) - [O.M. No.FD(SR-I)08(01)/2026-27: Revision of Basic Pay Scales-2026 and Adhoc Relief Allowance-2026 (22 Jul 2026)](https://www.finance.gos.pk/Home/Download?path=Rules%5CPayscales%5CPay%20Scale%20%282026%29.pdf), Finance Department, Government of Sindh (accessed 22 Oct 2026) - [Punjab eyes Rs910bn surplus in Rs5.9tr budget (17 Jun 2026)](https://www.dawn.com/news/2008447), Dawn (accessed 22 Oct 2026) - [Sindh govt presents Rs3.56t budget for FY2026-27, announces 7pc salary hike](https://dunyanews.tv/en/Business/957735-sindh-govt-presents-rs356t-budget-for-fy202627-announces-7pc-salary), Dunya News (accessed 22 Oct 2026) - [KP employees to receive higher salaries under new pay scales](https://www.techjuice.pk/kp-employees-to-receive-higher-salaries-under-new-pay-scales/), TechJuice (accessed 22 Oct 2026) - [KP unveils Rs2.17tr budget with 7% salary, pension hike (19 Jun 2026)](https://english.aaj.tv/news/amp/330460503), Aaj News (accessed 22 Oct 2026) - [7 percent increased salaries & pensions of Balochistan's employees in FY 2026-27 (17 Jun 2026)](https://www.app.com.pk/?p=1229129), Associated Press of Pakistan (accessed 22 Oct 2026)