Salary Increase as per the Budget Speech 2025-26 (Budget Copy) • Galaxy World

I shall share here the Salary Increase as per the Budget Speech 2025-26. The Finance Minister presented the Budget on 10 June 2025. As per the Budget Speech 2025-2026, the Finance Minister said that the Government is giving relief to the Government Employees. The government has also increased the pension for the pensioners. The relief package for the Govt employees and pensioners as per the Budget Speech 2025 is as follows:

Govt Employees Salary Increase as per the Budget Speech 2025-26

Increase in Salary of Federal Government Employees of Pakistan @ 10% of Basic Pay
Grant of an Increase in Pension for the Pensioners of the Federal Government @ 7% of the Net pension
Grant of Disparity Reduction Allowance to Eligible Employees @ 30% of Basic Pay
Grant of Special Conveyance Allowance Increased from Rs. 4,000/- per month to 6,000/- per month.

Before the Budget Speech, there was a Approval Salary by Federal Cabinet on 10-06-2025 for the salary increase and pension enhancement for the employees and pensioners. Previously Cabinet approved a 6% Increase in Salary, but later on Prime Minister increased the same to 10%. In the same way, the Cabinet approved a pension @ 7%, but the PM approved 10% for the pensioners.

Tax Relief for Salaried Persons

Employees getting an annual salary from 6 lac to 12 lac will pay 2,5% income tax instead of 5%
Employees getting annual salary upto Rs. 12 lac will have the tax formula with Rs. 6000/- instead of 30,000/-.
Salary upto 22 Lac will have to pay tax @ 11% instead of 15%
The higher salaries will also have tax relief in their salaries.

Reforms in Pension

Family Pension Period is only 10 Years
Elimination of more than one pension
Reducing before 60 years age retirement
Only one option: pay or pension after getting a job after retirement

What About Revised Pay Scales 2025?

If we look at the Budget Speech 2025-2026, there is no mention of merging Adhoc Relief Allowances into Basic Pay and the introduction of Revised Pay Scales 2025. If the Government revises the pay scales, then on what basis will the DRA-2025 and ARA-2025 be? It is yet to be clarified.

The government did not increase any Conveyance Allowance and House Rent Allowance as per the Budget Speech. The government increased only the Special Conveyance Allowance for the Disabled Employees.

For You: Salary Increase News Before Budget Speech 2025-26