ISLAMABAD: The Ministry of Finance has issued guidelines for the honorarium to be paid to the employees of different ministries/Divisions of federal government.
Finance Ministry, in a letter to all the Ministries has referred to its O.M of June 13, 2025, stating that it has received a number of queries from ministries/Divisions/departments etc, regarding application of this policy approved by Federal Cabinet on June 10, 2025 and the ECC on June 2, 2026.
The Finance Division clarified that grant of honoraria to employees of federal government, is to be applied as follows:
Types of honorarium: There shall following types of honoraria: (i) ordinary honorarium; (ii) performance honorarium; and (iii) budget honorarium, ordinary honorarium: The Principal Accounting Officers (PAOs) are authorized to grant the year-end Ordinary Honorarium equal to one basic pay to all employees in BPS 1-22, except themselves.
Performance honorarium: (i) performance honorarium will be granted based on overall appreciable performance during the course of a financial year and will be in addition to Ordinary Honorarium; (ii) the PAOs are authorized to grant performance honorarium to be called outstanding performance honorarium except themselves; and (iii) a list of outstanding performers shall be prepared. The strength of that list willbe 35% of the total number of employees in BPS 1-22, posted in a particularorganization/office.
Outstanding Performance Honorarium will be granted in following manner: (i) top 10% outstanding performers of the aforementioned list will be eligible for performance honorarium up to two month’s basic pay;(ii) next 25% outstanding performers of the aforementioned list will be eligible for performance honorarium up to one month’s basic pay; (iii) the employees attached to the ministries/Divisions from other departments to perform services may be granted both “Ordinary Honorarium and “Performance Honorarium” by the PAO in addition to the 35% of the employees above; and (iv) each office shall constitute a committee with necessary representation of Finance Division through concerned Joint Secretary (expenditure) as Member of the Committee. Performance honorarium will be granted on the recommendations of that Committee.
Budget honorarium: Budget honorarium will be granted in the following manner: (i) budget honorarium will be granted to Divisions/Offices involved in budget making exercise of the Federal Government; (ii) only the employee posted in Finance Division, Revenue Division, Federal Board of Revenue, Planning, Development and Special Initiatives Division, National Assembly Secretariat, Senate Secretariat and Prime Minister’s Office shall be eligible for grant of budget honorarium; and (iii) the quantum of budget honorarium for each financial year and for each of the mentioned ministries/Divisions/Offices shall be decided by the Finance Minister.
General provisions: following shall be the General Provisions to the grant of honorarium: (i) No honorarium shall be paid in cash and all honorarium reflected in payroll statements; (ii) taxation of honorarium will be on the lines of taxation of Transport Monetization Allowance; (iii) performance honorarium shall not be granted to an employee if the employee has served in such Ministry/Division for less than six month; (iv) no honorarium except for Outstanding Performance Honorarium, shall be granted before 1st May in any financial year; (v) employees who have received or likely to receive Budget Honorarium shall not be eligible for grant of Ordinary and Performance Honorarium; (vi) If Ordinary and Performance Honorarium has already been granted to an employee who is being granted Budget Honorarium, the amount of Budget Honorarium shall be adjusted against the already drawn Performance Honorarium ;( vii) no employee will receive honorarium from more than one Organization/offices; (viii) except for the honoraria specified in this policy, no other honoraria shall be granted, including those associated with religious festivals such as Eid and Christmas; (ix) the PAOS honorarium, if any, shall be subject to the approval of the Minister in-charge of the Ministry/Division; and (x) in case of any ambiguity in the implementation of the policy, Finance Divisionshall provide necessary clarification.
This Policy for grant of Honorarium is applicable to all Ministries/ Divisions/Departments/ Autonomous/Semi-autonomous bodies/Offices, etc, of the Federal Government across the board.
Finance Division has requested all the concerned Ministries/Divisions to strictly comply with this policy while recommending cases for grant of Honorius to Federal Government employees.
Copyright Business Recorder, 2025
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