Minimum Salary Increased in Pakistan | Revision of Special Allowance | Federal Government, August 2024

Minimum Salary Increased in Pakistan, In a significant move, the Government of Pakistan has issued an official memorandum from the Finance Division (Regulations Wing) on August 27th, 2024. This memorandum addresses the long-awaited revision of special allowances for civil employees of the federal government. The directive, effective from July 1st, 2024, brings positive news for thousands of employees across various departments, with a particular focus on enhancing the minimum wage and salary structures.

Let’s delve into the key details and implications of this new development: Minimum Salary Increased in Pakistan

1. Minimum Salary Increased in Pakistan

The President of Pakistan has approved an increase in the minimum wage or gross salary from Rs. 32,000 to Rs. 37,000 for all civil employees under the federal government. This increase also applies to civilians paid from Defense estimates, including contingent paid staff and contract employees against civil posts in Basic Pay Scales (BPS). Employees with a gross salary less than Rs. 37,000 will now receive the difference as a special allowance.

This revision acknowledges the financial challenges faced by federal employees and represents a positive step towards improving their livelihood.

2. Special Allowance Details

The memorandum further clarifies the conditions under which the Special Allowance will be granted. The following key points are crucial for understanding the allocation of this allowance:

• Income Tax Applicability: The Special Allowance will be subject to income tax, meaning that the amount received will be included in the taxable income of employees.
• Allowance During Leave: Employees will be eligible to receive the Special Allowance during periods of leave, with the exception of extraordinary leave.
• Non-Inclusion in Emoluments: This allowance will not be treated as part of emoluments for pension/gratuity calculations or house rent recovery.
• Exclusion During Posting Abroad: Employees on posting or deputation abroad will not be entitled to the Special Allowance during their tenure abroad.
• Allowance on Repatriation: Upon repatriation, employees will be eligible to receive the allowance based on what they would have received had they not been posted abroad.

Minimum Salary Increased in Pakistan

3. Budgetary Allocation

The increase in minimum wage and the Special Allowance will be accommodated within the existing budgetary allocations for the years 2024-2025 by the respective ministries, divisions, and departments. The government has emphasized that no supplementary grants will be provided for this purpose.

This budget-conscious approach reflects the government’s commitment to balancing financial constraints with the needs of its employees.

Minimum Salary Increased in Pakistan

Implications for Federal Employees

This memorandum brings much-needed financial relief for federal employees, particularly those earning below the new minimum wage threshold. By increasing the gross salary and introducing a special allowance, the government aims to ease the economic burden on its workforce.

However, employees posted abroad may feel a sense of disappointment as they will not benefit from this allowance during their foreign tenure. On the bright side, they will be compensated for the time they spent abroad once they return to Pakistan.

The introduction of income tax on the allowance also suggests that the government is maintaining a balanced approach, ensuring that the revision is beneficial yet fiscally responsible.

Conclusion

The revision of the Special Allowance for federal civil employees is a crucial step towards improving the financial well-being of thousands of government employees. With the minimum wage increase and the structured allocation of the Special Allowance, the government is demonstrating its commitment to addressing the needs of its workforce. As these changes take effect from July 1st, 2024, employees can expect a positive shift in their financial standing, while the government’s focus on fiscal responsibility ensures a sustainable approach to these enhancements.

This memorandum signifies progress, but it also highlights the government’s ongoing challenge of balancing employee benefits with budgetary constraints.

Minimum Salary Increased in Pakistan