ISLAMABAD – The federal government has officially issued a notification for a 10 percent increase in running basic salaries of government employees in the form of Ad-hoc Relief Allowance.
The notification states that the 10% increase will be based on the current basic salary under the head of Ad-hoc Relief Allowance.
The salary increase will be effective from July 1, 2025.
It stated that the President has approved a 10% Ad-hoc Relief Allowance 2025 for civil employees of the federal government, armed forces, civil armed forces, and civilian personnel receiving salaries from defense expenditure.
It added that contract employees working under standard terms and conditions on Basic Pay Scales will also benefit from this increase.
Tax Deduction on Salary
According to the notification, the amount of Ad-hoc Relief Allowance 2025 will be taxable under the Income Tax Act.
Additionally, this allowance will be admissible during general leave or Leave Preparatory to Retirement (LPR), however, it will not apply during extraordinary leave.
This allowance will not be included in the calculation of pension or gratuity, nor will it be considered for house rent deduction.
According to the notification, this allowance will not be applicable during foreign postings or deputations. However, upon return from abroad, employees will be given this allowance according to the same rate and amount as applicable during their domestic posting.
In addition, the notification further clarifies that the basic salary will include the personal allowance which is granted upon exceeding the maximum limit of the current pay scale after an annual increment.
The federal government has also clarified that this Ad-hoc Relief Allowance for the year 2025–26 will be provided from the budget of the respective ministries, divisions, and departments, and no additional or supplementary grant will be issued for this purpose.
Disparity Reduction Allowance
The Ministry of Finance has also issued notification for a 30% Disparity Reduction Allowance (DRA) for eligible government employees from Grade 1 to 22.
According to the second notification, the President has approved a 30% Disparity Reduction Allowance (DRA) for officers and employees of the federal government from Grade 1 to 22 who are already receiving this allowance.
According to the notification, this allowance will be effective from July 1, 2025, and will be given based on the basic salary as of June 30, 2022.
