The government is in the final stages of preparing the budget for the fiscal year 2026–27, and discussions over the proposed minimum monthly wage have also come into focus. The federal budget is expected to be presented on June 10, with preparations currently underway.
According to the proposals under consideration, the minimum monthly wage in Pakistan may be increased to Rs. 45,000 for the next financial year. The recommendation has been put forward by the Pakistan Institute of Development Economics (PIDE), which has suggested an evidence-based framework for setting the wage level.
If approved in the upcoming budget, this would represent a 12.5 per cent increase compared to the current minimum wage of Rs40,000.
PIDE’s report highlights that the minimum wage policy is no longer just a labour department issue. It directly affects household purchasing power, poverty levels, informal employment, domestic demand, productivity incentives, and overall social stability.
The institute has stressed that a revised wage structure could help strengthen economic conditions for low-income workers while also supporting broader economic activity.
The report also notes that average inflation stood at 6.19 per cent during the period from July to April of fiscal year 2026. On a year-on-year basis, inflation reached 10.9 per cent in April 2026, showing continued pressure on household budgets.
Officials say the proposed wage increase is part of wider efforts to align income levels with rising living costs and economic realities. The final decision will be made when the federal budget for 2026–27 is officially announced.
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