Govt Increases Salary by 10% for Government Employees from July 2025
A major salary increase government decision was announced in the new federal budget for 2025-26. All government employees, including civil servants and members of the armed forces, will receive a 10% salary increase, effective July 1, 2025. This hike will also benefit contract employees.
30% Disparity Allowance Introduced
In addition to the salary increase government policy, a 30% disparity allowance has been approved for employees who were previously not receiving it. This allowance is aimed at:
Reducing income disparities among departments
Promoting fairness across pay scales
Supporting financial equality in public service
Revised Income Tax Slabs
The government also introduced changes to the income tax system:
Income up to Rs600,000 annually: No income tax
Above Rs600,000: Tax starts from 1%, increasing by income level
Highest earners: Up to 35% tax
These tax reforms are designed to provide relief to lower-income groups while ensuring higher earners contribute more.
Objective of the Salary and Tax Measures
The overall aim of the salary increase government initiative is to:
Improve the financial well-being of public servants
Retain skilled professionals in government service
Address inflation and rising living costs
Make the tax structure more equitable
Impact on Public Sector Employees
These budget measures are expected to:
Boost morale among government employees
Support household budgets during economic challenges
Create a more balanced and supportive public sector system
