The Ministry of Finance has officially released Office Memorandums implementing the revised Basic Pay Scales (BPS-2026) for federal personnel, backdated to take effect from July 1, 2026. The updated framework restructures public sector compensation by integrating previous ad-hoc relief measures and granting new financial adjustments.
Consolidation of Basic Pay Scales
Under the revised structure, BPS-2026 replaces the former BPS-2022 framework. This adjustment merges two previous allowances directly into basic pay: the 15% Ad-hoc Relief Allowance introduced in 2022 and the 10% Ad-hoc Relief Allowance introduced in 2025.
New Allowance Increases
In addition to the scale revision, the federal government notified a 7% Ad-hoc Relief Allowance-2026, calculated on running basic pay. This allowance is subject to income tax and remains admissible during periods of leave, leave preparatory to retirement (LPR), and suspension. However, it will not be factored into calculations for pension, gratuity, or house rent. Conveyance allowances for personnel from BPS-1 to BPS-22 have been raised by 50% on existing terms.
Scope and Implementation Process
The updated compensation package applies across BPS-1 to BPS-22 to federal civil employees paid from civil and defence estimates, contingent paid staff, and contract employees appointed on standard terms. Affected staff have a 30-day window to evaluate the revised structure. Those wishing to remain on the BPS-2022 scale must submit a formal, irrevocable option to their DDO or relevant accounts office within this timeframe. Employees who do not submit an option will automatically transfer to the BPS-2026 pay scale.