Pakistan government notifies salary cut under austerity drive
- By Web Desk -
- Mar 15, 2026
The cabinet division of Pakistan has issued an official notification introducing austerity and fuel-saving measures including salary cut and others across government institutions, ARY News reported on Sunday.
Under the new policy, salaries of senior management in government departments and regulatory authorities will be reduced for two months under a slab-based deduction system. Officials earning between Rs300,000 and Rs1 million will face a five per cent cut, those receiving between Rs1 million and Rs2 million will see a 15 per cent reduction, salaries between Rs2 million and Rs3 million will be reduced by 25 per cent, while those earning above Rs3 million will face a 30 per cent cut.
The notification also orders a 100 per cent deduction of fees for government representatives serving on the boards of public and private companies. All deducted funds will be deposited into the Prime Minister Austerity Fund 2026.
The Ministry of Foreign Affairs Pakistan has been instructed to mark Pakistan Day with a simple flag-hoisting ceremony instead of traditional receptions. In addition, budgets for foreign missions will be reduced by 20 per cent and officers will face a two-day salary deduction.
A complete ban has also been imposed on foreign visits for the next two months, with ambassadors directed to represent Pakistan at international events instead.
However, operational agencies such as the Federal Board of Revenue, Customs and IRN operations will be exempt from work-from-home rules and restrictions on official vehicles. Law-enforcement agencies will also not be subject to the four-day work week.
For operational security institutions, fuel usage will be reduced by 50 per cent and 60 per cent of government vehicles will remain grounded. The Intelligence Bureau Pakistan will conduct a comprehensive audit of fuel consumption and vehicle usage, with a report to be submitted to the Shehbaz Sharif.
All federal and provincial departments have been directed to submit weekly performance reports through an IT portal, while a sub-committee headed by the Finance Secretary has been established to oversee the transfer of savings to the austerity fund.