Federal Government Increases Salaries by 10% & Adds 30% Disparity Allowance – July 2025 Update
The Federal Government of Pakistan has officially announced a 10% salary increase along with a 30% Disparity Reduction Allowance (DRA) for its employees. This decision comes as part of the fiscal year 2025–26 budget implementation, and it aims to support government workers against rising inflation.
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Key Highlights of the Notification
The Ministry of Finance has issued a detailed notification on the implementation. Here are the most important points:
- ✅ Effective Date: The increment will apply from 1st July 2025.
- ✅ Eligibility:
- All Federal Civil Servants
- Armed Forces Personnel
- Civil Armed Forces
- Contract Employees (based on their basic pay)
- ✅ 10% Ad-hoc Relief Allowance on current basic salary.
- ✅ 30% Disparity Reduction Allowance (DRA) for eligible employees.
Breakdown of the Increments
1. 10% Salary Increase
- Applied to the existing basic pay.
- Aimed at reducing the financial burden amid inflation.
- Covers both regular and contract-based employees.
2. 30% Disparity Reduction Allowance (DRA)
- Specifically targeted to address pay gaps among various departments.
- Ensures greater uniformity in salaries across federal entities.
Frequently Asked Questions (FAQs)
Who will receive this 10% salary increase?
All federal employees including:
Civil Servants
Armed Forces
Civil Armed Forces
Contract employees (based on basic pay)
What is the Disparity Reduction Allowance?
It’s an allowance designed to narrow the gap in salaries between different government departments. Employees already receiving higher benefits may not be eligible for the full 30%.
Will this impact pensioners?
The current notification is only for active employees. There is no mention of pension revisions yet.
Is the increase permanent?
The 10% increase is an Ad-hoc Relief, which means it’s not yet merged into the basic salary structure. It may be merged in future pay scales.
Will provincial employees also get this benefit?
This decision is for federal employees only. Provinces may issue separate notifications based on their budgets.
Importance of This Decision
This move shows the government’s intent to:
- Support public servants amid economic challenges.
- Maintain morale within the civil and defense sectors.
- Create more salary balance through DRA.
Conclusion
The government’s announcement to increase salaries by 10% and offer a 30% disparity allowance is a welcome move for federal employees. Starting from July 1, 2025, this decision aims to reduce financial pressure on public servants while addressing long-standing salary disparities. This initiative reflects a commitment to improving the welfare of government employees and creating more fairness in the public pay structure.
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