Punjab Chief Minister Maryam Nawaz Sharif has approved a 10% salary increase for government employees in the upcoming 2025–26 fiscal year budget.
This decision was made just days ahead of the provincial budget announcement scheduled for later this week. The salary and pension hikes align with the federal government’s proposals laid out in the national budget.
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Federal Finance Minister Muhammad Aurangzeb recently unveiled a federal budget with a total outlay of Rs17,573 billion, emphasizing economic development. The federal budget includes a 10% adhoc increase in salaries, a 7.5% raise in pensions, and revisions to income tax rates.
According to the new tax system, individuals earning up to Rs600,000 annually will remain exempt from income tax. Those with incomes between Rs600,000 and Rs1.2 million will pay 1% tax on the amount exceeding Rs600,000.
For those earning between Rs1.2 million and Rs2.2 million, a fixed tax of Rs6,000 applies, plus 11% on the income exceeding Rs1.2 million. Salaried individuals with annual earnings between Rs2.2 million and Rs3.2 million will pay a fixed tax of Rs116,000 along with an additional 23% on the amount above Rs2.2 million.
