The Ministry of Finance, through Office Memorandum No. F.1(2)IMP/2026 issued on 21 July 2026, has notified the Revision of Basic Pay Scales-2026 for all federal civil servants paid from civil estimates and defence estimates. The new scales take effect from 1 July 2026 and replace the Basic Pay Scales-2022 in their entirety.

How BPS-2026 was built: merger of two allowances

The BPS-2026 scales were constructed by merging two existing ad-hoc relief allowances directly into basic pay:

  • Ad-hoc Relief Allowance-2022 - 15% of the running basic pay of BPS-2017, granted under O.M. F.1(2)Imp/2022-283 dated 1 July 2022
  • Ad-hoc Relief Allowance-2025 - 10% of the running basic pay of BPS-2022, granted under O.M. F.1(1)Imp/2025 dated 4 July 2025

Both allowances cease to exist from 1 July 2026. Their value is now permanently embedded in the revised pay scales rather than paid as separate relief.

The 7% Ad-hoc Relief Allowance-2026

On top of the revised BPS-2026 basic pay, the government has sanctioned an Ad-hoc Relief Allowance-2026 at 7% of the running basic pay of BPS-2026. 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 contract terms. The allowance is payable from 1 July 2026 until further orders.

The allowance is subject to income tax. It is admissible during leave, the entire period of leave preparatory to retirement (LPR), and during suspension, but not during extraordinary leave. It is not treated as part of emoluments for calculating pension, gratuity, or house rent recovery. Employees posted abroad do not receive it during their foreign posting but become eligible upon repatriation at the rate they would have drawn had they remained in Pakistan.

How existing salaries are fixed in the new scales

Every employee in service on 30 June 2026 will have their basic pay fixed in BPS-2026 on a point-to-point basis: at the stage in the new scale that corresponds to the stage they occupied above the minimum of BPS-2022. An employee drawing personal pay beyond the maximum of their BPS-2022 scale on 30 June 2026 will continue to receive that personal pay at the revised BPS-2026 rates.

Annual increments remain unchanged in timing and conditions: they fall due on 1 December each year.

What the revised pay scales look like

The minimum basic pay rises across all 22 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 number of stages remains unchanged: 30 stages for BPS-1 through BPS-16, 20 stages for BPS-17 through BPS-19, and 14 stages for BPS-20 through BPS-22.

Special pays frozen and the option employees must exercise

All special pays, special allowances, and allowances calculated as a percentage of pay: including house rent allowance and the allowance equal to one month's basic pay: are frozen at the level admissible on 30 June 2026. Allowances already subject to a capped maximum are excluded from this freeze.

Every affected employee must submit an irrevocable written option within 30 days of the Office Memorandum (i.e., by 20 August 2026) choosing either to remain under the BPS-2022 scheme or to switch to BPS-2026. An employee who does not respond within the deadline is deemed to have opted for BPS-2026.

Anomaly Committee and next steps

The Finance Division (Regulations Wing) will set up an Anomaly Committee to resolve any anomalies arising from the implementation of BPS-2026. Ministries, divisions, and departments must collect the written options from their employees and communicate them to the relevant Accounts Office or DDO.

What the Office Memorandum does not specify is the precise date by which the Anomaly Committee will be constituted, the mechanism for employees to raise anomalies, or the timeline for resolving them. A separate Office Memorandum, reported by multiple outlets, has also revised conveyance allowance upward by 50% with effect from 1 July 2026, but that notification was not part of the BPS-2026 circular reviewed here.