25% Allowance on Running Basic Pay for Federal Employees

25% Allowance on Running Basic Pay for Federal Employees. The Pakistani government Finance Division has issued a summary for cabinet approval. So, I am uploading a complete summary detail here on this page for employees of Pakistan.


A structure of Unified Pay Scales was introduced in 1972 for all government servants. However, since 2009, disparities in salaries have occurred. Because employees of various government establishments had allowed 100 percent to 300 percent of the basic pay as allowance.

25% Allowance on Running Basic Pay for Federal Employees

  1. The Government did not allow any increase in salaries of government servants in the budget for FY 2020-21. Similarly, Tax slabs have revised for salaried people. This tax revision, coupled with inflation, has had an adverse impact on government servants. Whose take-home salaries had actually reduced even in nominal terms.
  2. The matter has reviewed in the meeting of the Secretaries’ Committee. Wherein it has concluded that the salary structure of the Federal Secretariat has become a major impediment to attracting competent officers to work in Federal Ministries. Officers now prefer working for provincial governments, where salaries have been raised significantly.

The Secretaries’ of Committee has an opinion that the present pay structure is not tenable. So, the salaries of the Federal Secretariat require an upward revision. Therefore, in order to motivate and retain officers in the Federal Secretariat.

Harmonization of Salaries:

  1. Civilian employees who have never granted an allowance equal to 100 percent of the basic pay work out to be 296,470, out of a total of 623,215 employees, or almost 48 percent. So, the Federal Cabinet had also noted this disparity during the review of the budget strategy for FY 2020-21 and directed harmonization of salaries. A Pay and Pension Commission has been constituted and is formulating recommendations for adoption w.e.f. 1st July 2021.
  2. However, in view of the reasons explained above, some form of immediate relief has required for those government servants. Who has disadvantaged vis-a-vis those who are receiving higher remuneration?

It is, therefore, proposed that till such time that a new salary structure is adopted on the recommendations of the Pay and Pension Commission, a ‘Disparity Reduction Allowance’ of 25 percent of the basic pay of RS-2017 may be allowed w.e.f 1″ March 2021 to those civil employees in BS-1 to BS-19 of the Federal Government (including employees of the Federal Secretariat and attached departments) who have never been allowed additional salary equal to or more than 100 percent of the basic pay (whether frozen or otherwise) or performance allowance.

Disparity Reduction Allowance:

  1. The ‘Disparity Reduction Allowance’ now granted on standard conditions (Annexure-II); it will not be admissible to employees of the organizations mentioned in Annexure I. It is necessary to freeze at the level drawn on 1″ March 2021. The financial impact for this allowance would be approximately Rs. 21 billion per annum. Any issues arising out of the implementation of disparity reduction allowance will be resolved by a committee to be notified by the Finance Division.

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Moreover, Finance Division may recommend to provincial governments to consider adopting the proposed disparity allowance for their employees, to be funded from provinces’ own resources.

  1. It has further submitted for the information of the Cabinet that posts in BS-1 to 16 will be upgraded on March 2021. So, timescale promotions have considered for adoption in the Budget for FY 2021-22. Therefore, this is on the analogy of the Government of Khyber Pakhtunkhwa. Furthermore, various ad-hoc relief allowances have considered for the merger in the basic pay scales from July 2021.
  2. Approval of the Cabinet has solicited to the proposals at paras 5 and 6 of the summary in terms of rule 16(j) of the Rules of Business, 1973. 9. The Minister for Finance and Revenue has seen and authorized the submission of the summary to the Cabinet.

List of Employees(Organizations) Who are Drawing Extra Allowances

25% Allowance on Running Basic
25% Allowance on Running Basic

25% Allowance on Running Basic

2 thoughts on “25% Allowance on Running Basic Pay for Federal Employees”

  1. Pingback: Finance Division Clarification of 25% Disparity Reduction Allowance

  2. Pingback: Guidelines for Pay Fixation of Employees on Deputation Basis

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