ISLAMABAD – The federal government has prepared multiple proposals for salary and pension increases ahead of the upcoming federal budget for the fiscal year 2026–27.
The proposals include tax relief for salaried individuals earning between Rs1.2 million and Rs2.2 million annually, along with reductions in tax rates for this income bracket.
Another key proposal suggests increasing the conveyance allowance by 100 percent for employees in Grade 1 to 19, while proposing a 50 to 75 percent increase for Grade 20 to 22 officials.
Officials said a 10 percent salary increase is also under consideration, along with the merger of one of the existing ad-hoc relief allowances out of the four currently being received since 2022, 2023, 2024, and 2025.
For lower-grade employees (Grade 1 to 16), a disparity allowance is also under review. Additionally, there is a proposal to bring armed forces personnel under the contributory pension scheme from July 1.
Reports further indicated that pensioners may see a whooping increase based on the average inflation rate of the past two years. The minimum wage revision is also part of the budget discussions.
Officials said the final decision on all proposals will be taken in a federal cabinet meeting chaired by the Prime Minister before the budget is presented. While negotiations with the IMF are ongoing, authorities expect a consensus soon.
The government has also indicated that, despite ongoing discussions, some form of relief for salaried classes is likely to be announced in the final budget.
