Punjab govt recommends increase in salaries, pensions in Budget 2026-27
- By Naseer Khawaja -
- Jun 15, 2026
LAHORE: The Punjab government has recommended an increase in salaries and pensions in its budget for the fiscal year 2026-27, sources in the provincial finance ministry said on Monday.
All preparations for the presentation of the provincial budget have been finalized, with Finance Minister Mujtaba Shuja-ur-Rehman set to present the budget in the Punjab Assembly on June 16.
According to finance ministry sources, the budget figures have been finalized and a provincial cabinet meeting will be held at 11:00am tomorrow to approve the budget proposals ahead of the assembly session.
Sources said the social sector has been given priority in the upcoming budget, while no new taxes are being proposed.
The budget also recommends an increase in salaries and pensions in line with the raise announced by the federal government in the Budget 2026-27, they added.
The federal budget proposes a 7 percent increase in salaries for government employees and a 7 percent increase in pensions for retired employees.
Earlier, while presenting the federal budget in the National Assembly, Finance Minister Muhammad Aurangzeb announced relief measures for the salaried class, including reductions in income tax rates across several income brackets.
Budget 2026-27: Income tax slabs for salaried class explained
According to the proposed federal tax structure, the income tax rate for individuals earning between Rs2.2 million and Rs3.2 million annually has been reduced from 23 percent to 20 percent.
For those earning between Rs3.2 million and Rs4.1 million, the tax rate has been lowered from 30 percent to 25 percent.
Similarly, taxpayers with annual incomes between Rs4.1 million and Rs5.6 million will see their tax rate reduced from 35 percent to 29 percent, while those earning between Rs5.6 million and Rs7 million will benefit from a reduction from 35 percent to 32 percent.
The federal government said the revised tax structure aims to provide relief to salaried taxpayers amid persistent inflationary pressures and the rising cost of living.