ISLAMABAD: The Ministry of Finance is reportedly preparing multiple proposals regarding salary and pension increases for government employees in the upcoming fiscal year 2026–27 budget.
According to sources, various options are being considered, including tax relief for salaried individuals earning between Rs1.2 million and Rs2.2 million annually.
Officials say there is also a proposal to double the conveyance allowance for employees in Grade 1 to 19 due to rising petroleum prices, while a 50 to 75 percent increase in conveyance allowance is being considered for officers in Grades 20 to 22.
Sources further indicate that a 10 percent salary increase for government employees is under consideration, along with the merger of one ad-hoc relief allowance out of four provided between 2022 and 2025.
For pensioners, proposals reportedly include an increase of up to 80 percent based on the average inflation rate of the past two years. A disparity allowance for employees in Grades 1 to 16 is also under consideration.
In addition, there is a proposal to bring armed forces personnel into a contributory pension scheme starting from the next fiscal year.
Officials say discussions with the International Monetary Fund (IMF) on salary increases and tax relief measures have reached their final stages.
The Ministry of Finance is expected to brief the Prime Minister and the federal cabinet on all proposals ahead of the budget. A final decision is likely to be taken in a cabinet meeting scheduled before June 5.
