ISLAMABAD – New Update for federal government employees as the General Provident Fund (GPF) profit rate has been slashed for FY2025-26.
The government fixed new annual rate at 12.05%, down from 12.46% last year, meaning employees will now earn a lower return on their accumulated GPF savings. A cut in the profit rate on the General Provident Fund (GPF) is set to affect the savings returns of federal government employees, with the government lowering the annual rate for the financial year 2025-26.
According to a notification, the new the profit rate on GPF deposits and subscribers’ credit balances at 12.05% per annum for FY2025-26, meaning government employees will now receive a lower annual return on their accumulated GPF savings.
The 12.05% rate will apply to GPF accounts of all government employees for the financial year 2025-26, covering the balances maintained under the federal government’s provident fund scheme.
However, employees covered under several provident funds administered by the Ministry of Railways and Ministry of Defence will be subject to separate instructions. The two ministries will issue the necessary directions regarding the applicable profit rate on their respective provident fund balances for the financial year.
General Provident Fund is savings mechanism for government employees. A fixed amount is deducted from their salaries every month and deposited with the government in their respective GPF accounts.
These accumulated savings earn an annual profit, allowing employees to build a financial reserve over the course of their service.
With the latest notification, however, the return on these government-backed savings has been reduced, bringing a lower profit rate for the 2025-26 financial year.
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