Pakistan raises housing allowance for federal employees by 85% to ease rent burden

Pakistan's Ministry of Housing and Works has issued a notification announcing an 85% increase in the rent ceiling for federal government employees, effective November 1, 2025.

The new rates were approved after consultation with the Finance Division, following the federal cabinet’s approval.

Rent ceilings were last revised on September 28, 2021. This time, an overall increase of 85% has been approved for all federal employees from BS-1 to BS-22.

According to the Ministry, the new ceilings will apply in six major cities, which include Islamabad, Rawalpindi, Lahore, Karachi, Quetta, and Peshawar. Rapid increases in rent and a growing urban population have made it difficult for government employees to find suitable housing under the previous rates.

Federal Minister for Housing and Works Mian Riaz Hussain Pirzada congratulated all federal employees on the decision, saying that employee welfare remains a top priority. He said the increase aims to ease the financial burden on staff.

Pirzada also noted that the revision will help reduce the pressure on the State Office, particularly in Islamabad, where around 17,400 government housing units exist, while about 43,000 registered applicants remain on the waiting list.

The Ministry reaffirmed its commitment to providing better facilities and addressing housing issues faced by federal employees.