Govt notifies revised pay scales, 7% salary increase for federal employees

ISLAMABAD: The federal government has formally notified revised Basic Pay Scales (BPS) and allowances for employees from BPS-1 to BPS-22, implementing the salary package announced in the federal budget with effect from July 1, 2026.

Under the notification, the 15 per cent Adhoc Relief Allowance granted in 2022 and the 10 per cent Adhoc Relief Allowance announced in 2025 have been merged into the basic pay of all federal government employees. The merger revises the basic pay structure across all grades.

Following the integration of these allowances into the basic pay, the government has also sanctioned a 7 per cent increase in salaries, to be calculated on the revised basic pay.

The Ministry of Finance has issued notifications to implement the revised pay scales and allowances with retrospective effect from July 1, 2026.

Meanwhile, according to the notification, the government has also approved an increase in the Conveyance Allowance for employees in BPS-1 to BPS-22 by 50 per cent of the existing amount per month on the existing terms and conditions.

In addition, an Executive Allowance has been approved for officers serving in BPS-17 to BPS-22, according to the notification.

The revised pay package is expected to provide financial relief to federal government employees amid rising inflation and increasing living costs