KARACHI – Pakistani government employees could see major shift in salary policy as the federal government weighs a two-tier pay raise formula in the upcoming budget, with lower-grade workers expected to receive significantly higher increases than senior officials.
Sources said the proposal would grant Grades 1 to 16 employees a larger salary hike to help offset the impact of persistent inflation, while Grades 17 to 22 officers may receive a comparatively smaller increase.
The move is aimed at channeling limited budget resources toward lower- and middle-income workers, providing greater relief to those most affected by rising living costs. A final decision on the proposed salary structure is expected during a special federal cabinet meeting ahead of the budget announcement.
Federal government employees could be in line for a 7 percent salary increase in the upcoming Budget 2026-27 as the government finalizes an estimated Rs. 18 trillion federal budget, according to sources.
Alongside the proposed pay raise, officials are considering income tax relief for salaried individuals, particularly those earning between Rs. 1.2 million and Rs. 2.4 million annually. New revenue measures worth Rs. 220 billion are also under review to help meet fiscal targets.
The government is evaluating possible reduction in super tax, while keeping the corporate tax rate unchanged. Meanwhile, pension spending is expected to exceed Rs. 1.1 trillion, highlighting the growing burden of retirement-related expenditures.
Pakistan to present Rs17.5 trillion Budget 2026–27 today amid key fiscal decisions
