Discover what’s expected in Pakistan’s Budget 2025-26, including a Rs50,000 minimum wage, up to 25% salary increases for government employees, and major income tax relief for the salaried class.
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Minimum Wage in Pakistan Budget 2025-26: Expected to Rise to Rs50,000
In a significant move aimed at providing financial relief to the working class, the Government of Pakistan is expected to raise the minimum wage to Rs50,000 per month in the upcoming federal budget for the fiscal year 2025-26. This increase is a key part of the government’s broader efforts to address inflation and improve living standards amid a challenging economic climate.
Expected Salary Increases in Pakistan Budget 2025-26
By Our Correspondent
May 12, 2025
In Pakistan
ISLAMABAD – The federal government is likely to unveil the budget for the next fiscal year 2025-26 in early June, with high expectations of a significant increase in the salaries and pensions of government employees.
In the 2024-25 budget, the PML-N government had presented a total outlay of Rs18,877 billion, focusing primarily on fiscal consolidation and development. The budget provided a 25% increase in salaries for government employees from Grade-1 to Grade-16 and a 20% increase for Grade-17 to Grade-22. Additionally, a 15% hike was approved in the pensions of retired government employees.
What’s Expected About Salaries in Budget 2025-26?
As preparations for the upcoming federal budget accelerate, the government is actively considering various proposals aimed at enhancing the financial well-being of public sector employees. According to official sources and leaked proposals, the government is planning to announce:
- A 25% increase in salaries for employees from Grade 1 to 16
- A 20% increase for employees from Grade 17 to 22
These proposals are still under review, and a final decision is expected to be announced on budget day. However, the potential hike is being widely welcomed by the salaried class, who have been burdened by inflation, high fuel prices, and the rising cost of living.
Proposed Tax Relief in Budget 2025-26
In a bid to provide relief to the salaried class, the government is also planning to revise the income tax slabs. A reduction of 2.5% in tax rates across all major brackets is under consideration. This move is expected to ease the financial burden on individuals who contribute significantly to national tax revenue.
Proposed Income Tax Brackets (Post 2.5% Reduction)
| Annual Income (PKR) | Current Tax Rate | Proposed Tax Rate |
|---|---|---|
| Up to 600,000 | No tax | No tax |
| 600,001 – 1,200,000 | 5% of amount exceeding Rs600,000 | 2.5% of amount exceeding Rs600,000 |
| 1,200,001 – 2,200,000 | Rs30,000 + 15% of amount exceeding Rs1,200,000 | Rs30,000 + 12.5% of amount exceeding Rs1,200,000 |
| 2,200,001 – 3,200,000 | Rs180,000 + 25% of amount exceeding Rs2,200,000 | Rs180,000 + 22.5% of amount exceeding Rs2,200,000 |
| 3,200,001 – 4,100,000 | Rs430,000 + 30% of amount exceeding Rs3,200,000 | Rs430,000 + 27.5% of amount exceeding Rs3,200,000 |
| Above 4,100,000 | Rs700,000 + 35% of amount exceeding Rs4,100,000 | Rs700,000 + 32.5% of amount exceeding Rs4,100,000 |
In addition to these revised rates, the income tax exemption threshold may be raised from Rs600,000 to Rs1,000,000, offering full tax exemption to low-income individuals. This potential change could benefit millions of working-class Pakistanis.
Minimum Wage and Labor Welfare
The government is also considering a substantial increase in the minimum wage, which is expected to be set at Rs50,000 per month. This increase will have a direct positive impact on daily wage laborers and low-income workers across public and private sectors. The move aligns with the government’s commitment to promoting social justice, reducing poverty, and improving purchasing power.
This adjustment would represent a significant rise from previous years and could help reduce income inequality, especially in urban centers where living costs are particularly high.
Budget 2025-26 and Broader Economic Goals
The federal budget 2025-26 is expected to focus on a few major priorities:
- Economic Stability: Reducing fiscal deficit and ensuring monetary discipline
- Tax Reforms: Broadening the tax base and simplifying tax procedures
- Social Sector Development: Increased allocations for education, healthcare, and social welfare programs
- Infrastructure and Development: Expanding road, transport, and housing projects
- Public Sector Reforms: Improving service delivery through digitization and performance-based incentives
Conclusion
The Pakistan Budget 2025-26 is shaping up to be a people-friendly financial plan, with multiple positive reforms expected in terms of salary increases, tax relief, and welfare. The proposed salary raises, adjustments in income tax slabs, and an increase in the minimum wage to Rs50,000 will offer much-needed relief to the working class and boost economic participation.
As always, the final figures and decisions will be announced during the official budget presentation in June 2025. However, based on current reports and internal discussions, the outlook for salaried individuals and low-income earners appears promising.
Stay tuned for updates as the government unveils the official budget. For the most accurate and timely information, follow official government releases and reliable news sources.
