Punjab Chief Minister Maryam Nawaz Sharif has approved a 10 percent increase in the salaries of government employees for the fiscal year 2025–26, days before the provincial budget is due to be presented.
The decision follows the federal government’s recent announcement of similar salary and pension adjustments. Punjab is aligning its financial policies with the Centre, which proposed a 10 percent ad hoc relief in public sector salaries and a 7.5 percent hike in pensions.
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This move comes shortly after Federal Finance Minister Muhammad Aurangzeb unveiled a Rs17.57 trillion federal budget focused on stimulating economic growth. The federal proposals also included revised income tax rates aimed at providing relief to low and middle-income earners.
Under the new federal tax structure, annual incomes up to Rs600,000 remain tax-exempt. Those earning between Rs600,000 and Rs1.2 million are now subject to a 1 percent tax on income above the exempted threshold. Salaries ranging from Rs1.2 million to Rs2.2 million are taxed at a fixed Rs6,000, with an additional 11 percent on earnings beyond Rs1.2 million. Those earning between Rs2.2 million and Rs3.2 million face a fixed tax of Rs116,000 plus 23 percent on the excess amount.