Budget 2026: 25% Salary Increase for All Government Employees
The Federal Budget 2026–27 announced a flat 25% increase in basic pay for all regular government employees across all Basic Pay Scale (BPS) grades — from BPS-1 to BPS-22. The increase is effective from July 1, 2026 and will appear in your July payslip.
This is the largest single salary increase in over a decade, aimed at offsetting inflation and improving the purchasing power of Pakistan's 3.5 million federal government employees.
How the 25% Increase is Calculated
The increase applies to your basic pay only — not your fixed allowances like medical or conveyance. However, since House Rent Allowance (HRA) is calculated as a percentage of basic pay, your HRA also increases proportionally.
Here is the formula:
New Basic Pay = Current Basic Pay × 1.25
New HRA = New Basic Pay × HRA Rate (45% or 30%)
Use our Salary Calculator to see your exact new gross salary in seconds.
Salary Increase by BPS Grade
The table below shows the minimum basic pay for each grade before and after the 25% increase:
| BPS Grade | Current Min. Basic | Increase | New Basic Pay |
|---|---|---|---|
| BPS-1 | ₨32,000 | +₨8,000 | ₨40,000 |
| BPS-5 | ₨38,800 | +₨9,700 | ₨48,500 |
| BPS-7 | ₨43,000 | +₨10,750 | ₨53,750 |
| BPS-11 | ₨53,800 | +₨13,450 | ₨67,250 |
| BPS-14 | ₨65,200 | +₨16,300 | ₨81,500 |
| BPS-16 | ₨74,800 | +₨18,700 | ₨93,500 |
| BPS-17 | ₨99,000 | +₨24,750 | ₨123,750 |
| BPS-18 | ₨140,000 | +₨35,000 | ₨175,000 |
| BPS-19 | ₨190,000 | +₨47,500 | ₨237,500 |
| BPS-20 | ₨240,000 | +₨60,000 | ₨300,000 |
| BPS-21 | ₨300,000 | +₨75,000 | ₨375,000 |
| BPS-22 | ₨360,000 | +₨90,000 | ₨450,000 |
What Happens to Your Allowances?
Here is how each allowance is affected by the salary increase:
- House Rent Allowance (HRA): Increases proportionally — it is 45% of basic pay in A-class cities and 30% elsewhere. A BPS-17 officer in Islamabad sees HRA go from ₨44,550 to ₨55,688.
- Medical Allowance: Fixed amount — does not change with the salary increase.
- Conveyance Allowance: Fixed amount — does not change.
This means your total monthly increase is slightly more than 25% if you receive HRA, because HRA goes up too.
When Will You Receive the Increase?
The increase is effective July 1, 2026. Most federal government employees will see it in their July 2026 salary, disbursed in early August. Some departments may process it with a one-month delay — you will receive arrears for the difference.
What About Pensioners?
Retired government employees receive a separate 15% pension increase, also effective July 1, 2026. Use our Pension Calculator to calculate your new monthly pension.
Calculate Your Exact New Salary
Every employee's situation is different — your city type, exact basic pay, and BPS grade all affect the final number. Use our free calculator for a precise breakdown: