The Federal Government has approved a major upward revision in the rental ceilings for federal employees’ residential accommodations in Islamabad and other major cities, including Rawalpindi, Lahore, Karachi, Quetta, and Peshawar.
The revision, notified through an Office Memorandum issued by the Ministry of Housing and Works, will take effect from November 1, 2025, and aims to align the official rental ceilings with current market rates. It applies to all new hiring cases and to those where existing leases have expired.
According to the notification, the rental ceiling for employees in Basic Pay Scales (BPS) 1–2 in Islamabad has been increased from Rs. 7,029 to Rs. 13,004, while for BPS-22, it rises from Rs. 98,444 to Rs. 182,121. For other specified stations—including the major provincial capitals—the ceilings have been raised from Rs. 6,591 to Rs. 12,193 for BPS 1–2, and from Rs. 89,230 to Rs. 165,076 for BPS 22.
Under the new structure:
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BPS 1–2: Rs. 13,004 (Islamabad), Rs. 12,193 (other stations)
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BPS 3–6: Rs. 20,313 and Rs. 17,860
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BPS 7–10: Rs. 30,346 and Rs. 27,162
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BPS 11–13: Rs. 45,776 and Rs. 39,705
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BPS 14–16: Rs. 57,507 and Rs. 50,198
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BPS 17–18: Rs. 76,122 and Rs. 66,411
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BPS 19: Rs. 101,202 and Rs. 86,610
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BPS 20: Rs. 127,095 and Rs. 109,296
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BPS 21: Rs. 152,183 and Rs. 131,548
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BPS 22: Rs. 182,121 and Rs. 165,076
The notification clarifies that the new rates will also apply where employees are paying rent differentials from their own pockets. In such cases, rent can be increased up to the owner’s demand or the revised ceiling—whichever is lower.
Furthermore, houses hired under Rules 8(i) and 9(i) of the Accommodation Allocation Rules, 2002—whether leased from private owners or self-hired—will also benefit from the revised ceilings.
Importantly, the memorandum states that these enhancements will not entail any additional budgetary allocations, as ministries and divisions must meet the higher expenditures from their existing funds for the fiscal year 2025–26.
The decision, approved by the Finance Division and Cabinet Division, and signed by Section Officer (Policy/E-III) Yawar Hussain Rana, reflects the government’s effort to rationalize official housing benefits amid rising rental costs in Pakistan’s major urban centers.
