Finance Minister Muhammad Aurangzeb on Friday announced a 7 per cent increase in salaries of federal government employees and a matching 7 per cent raise in pensions for retired workers as part of the federal budget for fiscal year 2026-27.

Presenting the budget in the National Assembly, the minister said the pay increase was aimed at providing relief to government employees amid inflationary pressures and rising living costs.

He also announced a 7 per cent increase in pensions for retired government employees.

In a separate measure, the government increased the minimum monthly wage by 10 per cent, raising it by Rs3,700 from the existing level.

As a result, the minimum wage has been increased to Rs40,700 per month.

The measures are part of the government’s broader relief package announced in the budget, which also includes tax concessions for the salaried class and other initiatives aimed at supporting household incomes while maintaining fiscal discipline.

The government says the steps are designed to protect the purchasing power of workers and pensioners as the economy continues its recovery and stabilisation path.