New salary structure merges previous relief allowances, revises pay scales from BPS-1 to BPS-22, and takes effect from July 1, 2026.
The federal government has officially approved a comprehensive revision of basic pay scales and allowances for civil employees, introducing the Basic Pay Scales (BPS)-2026 with effect from July 1, 2026.
The new salary structure will apply to federal government employees paid from both civil and defense estimates and is aimed at streamlining compensation by incorporating previous ad-hoc relief measures into the basic pay framework.
Under the revised scheme, the government has merged the Ad-hoc Relief Allowance-2022, which was equal to 15% of the running basic pay of BPS-2017, and the Ad-hoc Relief Allowance-2025, granted at 10% of the running basic pay under BPS-2022.
As a result, the previous Basic Pay Scales-2022 have been replaced by the newly introduced BPS-2026 structure.
The revised pay scales cover employees from BPS-1 to BPS-22, with increases in minimum, annual increment, and maximum salary levels across all grades.
Existing employees serving on June 30, 2026, will have their salaries fixed in BPS-2026 on a point-to-point basis, ensuring that they are placed at the corresponding stage they occupied under BPS-2022.
The government has also announced an Ad-hoc Relief Allowance-2026 at the rate of 7% of the running basic pay under BPS-2026.
The allowance will be admissible to federal civil employees, civilians paid out of defense estimates, contingent-paid staff, and contract employees appointed against civil posts under standard terms and conditions.
The allowance will remain effective from July 1, 2026, until further orders and will be subject to income tax.
According to the notification, the new allowance will be payable during regular leave, leave preparatory to retirement (LPR), and periods of suspension, but will not be counted for pension, gratuity, or house rent recovery calculations.
Employees posted abroad on deputation or assignment will not receive the allowance during their foreign posting; however, it will be restored upon their return.
The government has further decided to freeze all special pays, special allowances, and pay-related allowances, including house rent allowance, at the level admissible as of June 30, 2026.
Employees have been given a one-time option to either remain under the BPS-2022 scheme or shift to BPS-2026. Those who fail to submit their choice within 30 days will automatically be deemed to have opted for the new pay structure.
To address implementation concerns, the Finance Division will establish an Anomaly Committee tasked with reviewing and resolving any issues arising from the introduction of BPS-2026. Annual increments will continue to be granted on December 1 each year, subject to existing rules and conditions.