Business Desk 
Jul 05, 2025
A man counts Pakistani rupee notes at a currency exchange shop in Peshawar, Pakistan September 12, 2023. — Reuters
The Ministry of Finance has officially issued a notification for a 10% increase in the salaries of federal government workers, alongside the approval of a Disparity Reduction Allowance (DRA) equivalent to 30% of basic salary.
It is worth noting that the hike was declared within the budget for the financial year 2025-26, whereas the pay of federal employees ranging from grade 1 to 22 would be raised by 10%, while retired officials would receive a 7% increase in their pensions.
As outlined in one of the notifications, dated July 4, the basic salary of armed forces members, civil armed forces, and civilian staff of the federal government would be subject to this raise.
The notification stated that the salary enhancement would be “subject to income tax; admissible during leave and entire period of LPR except during extraordinary leave; will not be treated as part of emoluments for calculation of pension/gratuity and recovery of house rent.”
Moreover, it noted that the enhanced pay would “not be admissible to the employees during the tenure of their posting/deputation abroad; and will be admissible to the employees on their repatriation from posting/deputation abroad at the rate and amount which would have been admissible to them had they not been posted abroad.”
In a separate directive, it was mentioned that federal government personnel from grades 1 to 22 are allowed to draw DRA at 30% of their basic salary.
The provision covers those already availing of DRA. “For those employees who have been appointed on or after July 1, 2022, this allowance will be admissible based on the relevant initial Basic Pay Scale of 2017.”
According to the notification, this allowance was effective from July 1, 2025, and they are given based on the basic salary as of June 30, 2022.
