The federal cabinet has approved a seven percent increase in salaries and a seven percent increase in pensions for all government employees in the upcoming Budget 2026‑27.
The decision was taken during a special cabinet session chaired by Prime Minister Shehbaz Sharif in Islamabad, where budget documents for FY2026‑27 were formally approved.
The cabinet also decided to merge the 15 percent ad hoc relief granted in 2022 into the basic pay structure of all federal government employees, effective from the new financial year.
Similarly, the 10 percent ad hoc relief introduced in 2025 will be permanently merged into the basic salaries of federal government employees under the new budget framework.
Finance Minister Muhammad Aurangzeb will present the federal budget for FY2026‑27 in the National Assembly immediately after the cabinet’s formal approval of all budget documents.
Prime Minister Shehbaz Sharif thanked coalition parties and the International Monetary Fund (IMF) for their cooperation and support during the preparation of the FY2026‑27 federal budget.
