The Federal Government has approved a substantial upward revision in the rental ceilings for hiring residential accommodations for federal employees in Islamabad and other major cities, including Rawalpindi, Lahore, Karachi, Quetta, and Peshawar.
According to an Office Memorandum issued by the Ministry of Housing and Works, the revised ceilings will take effect from November 1, 2025, and aim to align government rental limits with the prevailing market rates. The new rates will apply to all fresh hiring cases and to those where existing leases have expired.
Under the new structure, the rental ceiling for employees in Basic Pay Scale (BPS) 1–2 in Islamabad has been raised from Rs. 7,029 to Rs. 13,004, while for officers in BPS 22, the limit has been increased from Rs. 98,444 to Rs. 182,121. In other specified stations, including the major provincial capitals, ceilings have also seen a notable hike—from Rs. 6,591 to Rs. 12,193 for BPS 1–2, and from Rs. 89,230 to Rs. 165,076 for BPS 22.
As per details, the revised ceilings for different scales are as follows:
BPS 1–2: Rs. 13,004 (Islamabad), Rs. 12,193 (other stations)
BPS 3–6: Rs. 20,313 and Rs. 17,860
BPS 7–10: Rs. 30,346 and Rs. 27,162
BPS 11–13: Rs. 45,776 and Rs. 39,705
BPS 14–16: Rs. 57,507 and Rs. 50,198
BPS 17–18: Rs. 76,122 and Rs. 66,411
BPS 19: Rs. 101,202 and Rs. 86,610
BPS 20: Rs. 127,095 and Rs. 109,296
BPS 21: Rs. 152,183 and Rs. 131,548
BPS 22: Rs. 182,121 and Rs. 165,076
The enhancement will also benefit employees currently paying rent differentials from their own resources. In such cases, rent can now be increased up to either the owner’s demand or the occupant’s revised ceiling—whichever is lower.
Additionally, houses hired under Rules 8(i) and 9(i) of the Accommodation Allocation Rules, 2002, whether leased from private owners or self-hired by officers, will also qualify for rent enhancement in accordance with the new structure.
The memorandum clarifies that no additional budgetary allocations will be made for the revision, and ministries and divisions will meet the increased expenditure from their existing budgetary provisions for FY 2025–26.
The notification—signed by Section Officer (Policy/E-III) Yawar Hussain Rana—follows approval from the Finance Division and the Cabinet Division, marking the government’s intent to rationalize official housing compensation in view of soaring market rents in major urban centers.
This long-awaited revision is expected to provide significant relief to federal employees struggling with rising rental costs, especially in Islamabad and other large cities where housing prices have surged sharply in recent years.
