Govt announces special allowance for low-paid employees

Under the new arrangement, employees earning less than the minimum salary will receive an allowance to bring their pay up to Rs40,700.

Who will qualify?

The measure will cover federal civil employees and certain contract workers whose minimum salary limit is Rs40,700. The Finance Ministry is preparing to adjust their salaries through the special allowance.

The allowance will apply from July 2026, the start of the current financial year, and will continue until further orders. However, employees will have to meet certain conditions to receive the payment.

Conditions for the allowance

The special allowance will be subject to income tax and will continue during ordinary leave as well as the Leave Preparatory to Retirement (LPR). However, employees on extraordinary leave will not receive the allowance.

Federal employees serving abroad or on deputation will also not be eligible for the allowance during that period. Once they return to Pakistan after completing their foreign posting or deputation, they will again receive the allowance at the applicable rate.

Budget arrangements

The Finance Ministry has directed ministries, divisions and departments to meet the additional costs from their existing budgets for the 2026-27 financial year. The extra spending will cover the higher minimum salary and the special allowance.

The decision is mainly aimed at supporting employees earning below the government’s minimum salary level. It could provide some relief to low-paid workers, but the actual benefit will depend on eligibility and the applicable conditions.

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