Budget 2026 27 Salary & Pension Increase Latest News Pakistan
In the Federal Budget 2026-27, the government announced a 7% increase in salaries for federal employees and a 7% increase in pensions for retired employees. The minimum wage has also been raised by 10% to provide additional support to low-income workers amid rising living costs.
Tax Relief for Salaried Individuals (Government & Private Sector) Budget 2026-27
The government has announced significant tax relief for salaried employees across both government and private sectors through revised income tax slabs:
| Taxable Income | Tax Rate |
|---|---|
| Where taxable income does not exceed Rs. 600,000/- | 0% |
| When taxable income exceeds Rs. 600,000/- but does not exceed Rs. 1,200,000/- | 1% of the amount exceeding Rs. 600,000/- |
| Where taxable income exceeds Rs. 1,200,000/- but does not exceed Rs. 2,200,000/- | Rs. 6,000/- + 11% of the amount exceeding Rs. 1,200,000/- |
| Where taxable income exceeds Rs. 2,200,000/- but does not exceed Rs. 3,200,000/- | Rs. 116,000/- + 20% of the amount exceeding Rs. 2,200,000/- |
| Where taxable income exceeds Rs. 3,200,000/- but does not exceed Rs. 4,100,000/- | Rs. 316,000/- + 25% of the amount exceeding Rs. 3,200,000/- |
| Where taxable income exceeds Rs. 4,100,000/- but does not exceed Rs. 5,600,000/- | Rs. 541,000/- + 29% of the amount exceeding Rs. 4,100,000/- |
| Where taxable income exceeds Rs. 5,600,000/- but does not exceed Rs. 7,000,000/- | Rs. 976,000/- + 32% of the amount exceeding Rs. 5,600,000/- |
| Where taxable income exceeds Rs. 7,000,000/- | Rs. 1,424,000/- + 35% of the amount exceeding Rs. 7,000,000/- |
In addition to the revised slabs, the government has fulfilled another key promise by completely eliminating the surcharge, which had already been brought down from 10% to 9% in the previous budget and has now been reduced to 0% — providing further meaningful relief to salaried taxpayers.
retirees who have been paying pension Rs. 20000/25000 has to be reviwed coz the same is small and cannot run even for two days. Such reforms should be made that all pensioners be placed on the same scale. People who are receiving pension 20000/25000, it must be reached upto 40000 or there should have been 80 percent increase in their pension.