Government Employee Allowances 2026: Medical, Disparity Reduction and Ad-hoc Relief

A government employee’s take-home pay in Pakistan is basic pay plus allowances, and the allowances are often worth as much as the basic pay itself. Three of them cause the most confusion: the medical allowance, the Disparity Reduction Allowance (DRA), and the Ad-hoc Relief Allowance (ARA).

Here is the current rate of each, who gets it, and what counts in your gross salary. It covers federal government employees in BPS-1 to BPS-22 under the 2026 rules. Provincial employees follow their own provincial notifications.

Allowances at a Glance#

Medical Allowance in Pakistan: Rs 1,500 a Month#

Serving employees in BPS 1-16 get a medical allowance of Rs 1,500 a month. That is the figure on a real November 2026 salary slip for a BPS-07 employee, and it matches the rate described in the run-up to the 2024-25 budget. It is a fixed monthly amount, not a percentage of basic pay.

Officers in BPS-17 and above are generally covered by medical reimbursement through their department, rather than the fixed Rs 1,500 allowance. The exact arrangement depends on your department and cadre, so check your salary slip.

Grade-wise medical allowance tables do not match the real salary slip. Figures of Rs 3,000, Rs 5,000, Rs 8,000 and Rs 12,000 by grade, or ranges of Rs 3,000-10,000 and Rs 15,000-25,000. Those figures conflict with the real salary slip and with each other. The verified fixed figure is Rs 1,500 for BPS 1-16.

Pensioners get a different medical allowance. It is 25% of the net pension for BPS-1 to BPS-15, and 20% for BPS-16 to BPS-22, worked out on the net (65%) pension before ad-hoc increases, plus a further 25% increase on that base notified in 2015. For example, a net pension of Rs 68,250 a month gives a medical allowance of about Rs 17,063 a month at the 25% rate. Our government pension guide works through the full pension calculation.

Medical Allowance vs Health Allowance#

Health Allowance is a different allowance, and it is not for everyone. It is paid to doctors and medical and dental staff who are directly engaged in patient care, under Finance Division O.M. No.15(2)R-2/2021 dated 2 December 2025, following a Supreme Court judgment. Staff in administrative posts, even in a health department, do not qualify.

Health Allowance is subject to income tax. It is not part of emoluments for the purpose of pension or gratuity, and it is not admissible during a posting abroad. Employees who were receiving it without meeting the eligibility criteria are to have it stopped, and may instead be granted DRA if they qualify for it.

Disparity Reduction Allowance (DRA) in Pakistan: The Full History#

DRA exists to close the pay gap between departments in the same grade. Two employees in the same BPS grade can take home very different pay because some departments pay large special allowances and others do not. DRA tops up the staff in the departments that do not.

DRA-2026 is 15% of the basic pay as on 30 June 2022. That is the official figure in Finance Division O.M. No.14(2)R-3/2025 dated 21 July 2026. It goes only to employees who are already in receipt of DRA, on the existing terms and conditions.

The eligibility test comes from the February 2022 memorandum. DRA is for federal civil employees, including the Federal Secretariat, attached departments and subordinate offices, who had never been allowed extra allowances equal to or above 100% of basic pay, or a performance allowance. If your department already pays you a special allowance of 100% or more, you do not get DRA.

Provinces are not covered by the federal DRA orders. The 2022 memorandum only recommended that provinces consider a similar allowance from their own funds. Check your provincial finance department’s notifications.

Worked example: BPS-17, basic pay as on 30 June 2022 Rs 45,070. DRA-2026 is 15% of Rs 45,070 = Rs 6,761 a month. DRA-2025 is 30% of Rs 45,070 = Rs 13,521 a month. Together, the two most recent DRAs add Rs 20,282 a month.

Ad-hoc Relief Allowance (ARA): What Is Live and What Is Frozen#

ARA-2026 is 7% of the new running basic pay, for all federal employees in BPS 1-22, from 1 July 2026. It is subject to income tax, it is not counted for pension or gratuity, and it is not admissible during a posting abroad.

ARA-2022 (15%) and ARA-2025 (10%) no longer exist as separate allowances. They were merged into basic pay to create the Revised Basic Pay Scales 2026, effective 1 July 2026.

ARA-2023 and ARA-2024 were NOT merged. They stay as separate allowances, frozen at their 30 June 2026 level. ARA-2023 is 35% of basic pay for BPS 1-16 and 30% for BPS 17-22. ARA-2024 is 25% for BPS 1-16 and 20% for BPS 17-22.

The Budget 2026-27 package includes the pay scale merger, worked examples by BPS grade, and the conveyance increase.

Other Allowances in Your Gross Salary#

Conveyance allowance rose 50% from 1 July 2026:

• BPS 1-4: from Rs 1,785 to Rs 2,678 a month.
• BPS 5-10: from Rs 1,932 to Rs 2,898 a month.
• BPS 11-15: from Rs 2,856 to Rs 4,284 a month.
• BPS 16 and above: from Rs 5,000 to Rs 7,500 a month.

For the full table, see the conveyance allowance rates by BPS group. Conveyance allowance received in cash is fully taxable.

House Rent Allowance is a percentage of basic pay that depends on your posting city, up to 45% in the big cities. It stands frozen at its 30 June 2026 level under the 2026 pay revision. The exact rate depends on your city and your department, so check your salary slip.

Executive Allowance continues for officers in BPS 17-22 in the PAS, PSP and OMG groups, calculated on basic pay as on 30 June 2026. Orderly Allowance continues for BPS-20 to BPS-22. Special Pay, Personal Pay and Qualification Pay are pensionable allowances. They count towards your pensionable emoluments. ARA does not.

What Counts in Your Gross Salary#

Gross salary is basic pay plus all admissible allowances. That includes ARA, DRA, conveyance, medical, house rent, and any special or cadre allowances your department pays.

Worked example: BPS-11 at the new basic pay of Rs 22,410. Basic pay Rs 22,410 + ARA-2026 Rs 1,569 + conveyance Rs 4,284 + medical Rs 1,500 = Rs 29,763 a month, before house rent and DRA. House rent varies by city and is frozen at the 30 June 2026 level. DRA applies only if you are eligible, at 15% of your basic pay as on 30 June 2022. Our BPS pay scale chart 2026 gives the basic pay for every grade.

Pensionable emoluments are narrower. Only basic pay plus pensionable allowances such as Special Pay, Personal Pay and Qualification Pay count towards your pension. ARA does not count for pension or gratuity. The GP Fund is a separate savings deduction, not an allowance. Our income tax on salary guide explains which allowances are taxed.

Mistakes to Avoid#

Adding DRA to every salary calculation. DRA-2026 goes only to employees already receiving DRA. If you never received DRA, you do not get 15% extra.

Using the wrong DRA base. DRA-2025 and DRA-2026 are calculated on the basic pay as on 30 June 2022, not on your current running basic pay. DRA-2022 was calculated on the 2017 scale. Using the current basic pay overstates the amount.

Do not confuse medical allowance with health allowance. Medical allowance is the fixed Rs 1,500 a month for BPS 1-16. Health Allowance is a separate allowance for doctors and medical staff directly engaged in patient care.

The grade-wise figures of Rs 3,000, Rs 5,000, Rs 8,000 and Rs 12,000 do not match the real salary slip.

Do not count ARA towards your pension. Ad-hoc Relief Allowance is not pensionable. Only basic pay plus pensionable allowances count.

Frequently Asked Questions#

Which allowances are part of gross salary?

All of them. Gross salary is your basic pay plus every admissible allowance: ad-hoc relief, disparity reduction (if eligible), conveyance, medical, house rent, and any special or cadre allowances your department pays. Pensionable emoluments are narrower. Only basic pay plus pensionable allowances such as Special Pay, Personal Pay and Qualification Pay count towards your pension. ARA does not count for pension or gratuity.

What is the medical allowance for government employees?

Serving employees in BPS 1-16 get a fixed medical allowance of Rs 1,500 a month. Officers in BPS-17 and above are generally covered by medical reimbursement through their department. Pensioners get a different medical allowance: 25% of the net pension for BPS-1 to BPS-15, and 20% for BPS-16 to BPS-22. Health Allowance is a separate allowance for doctors and medical staff directly engaged in patient care.

Who gets the Disparity Reduction Allowance?

Federal civil employees who had never been allowed extra allowances equal to or above 100% of basic pay, or a performance allowance. DRA tops up staff in departments that pay little or no special allowances, to close the gap with departments that pay a lot. DRA-2026 goes only to employees already in receipt of DRA. Provincial employees are not covered by the federal DRA orders.

Is ARA part of basic pay now?

Two of them are. ARA-2022 (15%) and ARA-2025 (10%) were merged into basic pay to create the Revised Basic Pay Scales 2026, so they no longer exist as separate allowances. ARA-2023 and ARA-2024 were not merged and stay frozen at their 30 June 2026 level. ARA-2026 is a fresh 7% allowance on the new basic pay.

Are allowances taxed?

It depends on the allowance. Conveyance allowance received in cash is fully taxable, and ARA-2026 and Health Allowance are subject to income tax. The tax treatment of the medical allowance is not settled, so check the current Finance Act or your tax adviser before relying on any figure. The 2026-27 income tax slabs apply to salary income.