The federal government is reviewing several proposals related to salaries, pensions, and tax relief ahead of the upcoming Budget for fiscal year 2026-27. Officials said different measures are under discussion to provide financial relief to government employees and salaried individuals facing rising living costs.
According to reports, the proposed Budget includes tax relief for salaried people earning between Rs1.2 million and Rs2.2 million annually. Authorities are also considering reducing income tax rates for this category to ease the financial burden on middle-income workers.
Another major proposal under discussion is an increase in conveyance allowance for government employees. Officials said the allowance may be increased by 100 percent for employees from Grade 1 to Grade 19. For officers in Grade 20 to Grade 22, the proposed increase ranges between 50 and 75 percent.
The government is also considering a 10 percent salary increase for employees as part of the upcoming Budget measures. In addition, one of the four ad-hoc relief allowances introduced between 2022 and 2025 may be merged into the basic salary structure.
Sources said a disparity allowance for lower-grade employees from Grade 1 to 16 is also under review. The move is aimed at reducing income gaps among different employee categories.
Reports further suggested that pensioners could receive a significant increase in pensions based on the average inflation rate recorded during the last two years. Officials believe pension adjustments are necessary due to the rising cost of living across the country.
The revision of minimum wage is also being discussed during Budget preparations. However, no final figures have been officially confirmed so far.
Another important proposal relates to armed forces personnel. Authorities are considering bringing military employees under the contributory pension scheme from July 1. The proposal is currently part of ongoing policy discussions.
Officials said all final decisions regarding salary increases, tax relief, pensions, and allowances will be taken during a federal cabinet meeting chaired by Prime Minister Shehbaz Sharif before the presentation of the Budget.
The government is also continuing negotiations with the International Monetary Fund (IMF) regarding economic and fiscal matters. Despite these discussions, officials indicated that some relief for the salaried class is likely to be included in the final Budget announcement.
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The upcoming Budget is being closely watched by government employees, pensioners, and salaried individuals who are expecting measures to reduce financial pressure amid inflation and economic challenges in Pakistan.
