The Ministry of Finance, through Office Memorandum No. F.1(2)IMP/2026 dated 21 July 2026, notified the revision of Basic Pay Scales and allowances for all federal civil servants with retrospective effect from 1 July 2026. The new BPS-2026 structure replaces BPS-2022 and was created by merging the 15 percent Ad-hoc Relief Allowance-2022 and the 10 percent Ad-hoc Relief Allowance-2025 directly into basic pay. Both predecessor allowances ceased to exist on 1 July 2026.
How pay is fixed under the new scales
The basic pay of every employee in service on 30 June 2026 is fixed in BPS-2026 on a point-to-point basis: at the stage corresponding to the one the employee occupied above the minimum of BPS-2022. Anyone drawing Personal Pay beyond the maximum of the old scale continues to receive it at the revised rates. Annual increments remain admissible on 1 December each year under existing conditions.
The minimum basic pay rises across all grades. BPS-1 moves from Rs13,550 to Rs16,280; BPS-17 from Rs45,070 to Rs54,140; and BPS-22 from Rs122,190 to Rs146,770. The full schedule of 22 grades with minimum, increment and maximum figures is appended to the Office Memorandum.
The 7 percent Ad-hoc Relief Allowance-2026
On top of the revised basic pay, an Ad-hoc Relief Allowance-2026 at 7 percent of the running basic pay of BPS-2026 is payable from 1 July 2026 until further orders. It applies to civil employees of the Federal Government, civilians paid from defence estimates, contingent paid staff, and contract employees occupying civil posts on standard terms.
The allowance is subject to income tax. It is admissible during leave, the full period of leave preparatory to retirement, and suspension, but not during extraordinary leave. It does not count towards pension, gratuity or house rent calculations. Employees posted abroad do not receive it while on deputation but become eligible on repatriation at the rate that would have applied had they remained in Pakistan.
Irrevocable option and the 20 August deadline
Each ministry, division and department was required to obtain an irrevocable written option from every employee within 30 days of the Office Memorandum. Employees could elect either to remain on the BPS-2022 scheme or to move to BPS-2026. The 30-day window opened on 21 July 2026 and closed on 20 August 2026. Any employee who did not exercise the option within that period is deemed to have opted for BPS-2026.
Allowances frozen at June 2026 levels
All special pays, special allowances and allowances calculated as a percentage of basic pay: including House Rent Allowance and the allowance equal to one month's basic pay: stand frozen at the level admissible on 30 June 2026. Allowances already subject to a prescribed maximum limit are excluded from the freeze. The order covers all federal employees in BPS-1 to BPS-22, including civil employees of the judiciary.
Anomaly Committee
The Finance Division (Regulations Wing) will set up an Anomaly Committee to resolve any anomalies arising from the implementation of BPS-2026. The Office Memorandum states that all existing rules and orders not modified by the new scheme continue in force.
The Office Memorandum does not specify the composition of the Anomaly Committee, the timeline for its findings, or the date until which the 7 percent Ad-hoc Relief Allowance-2026 will remain in effect beyond "till further orders."