ISLAMABAD: The federal government has reduced the annual profit rate on the General Provident Fund (GP Fund) balances of government employees for the fiscal year 2025-26.
According to a notification issued by the Ministry of Finance, the annual profit rate on amounts deposited in the General Provident Fund and the credit balances of subscribers has been fixed at 12.05 percent for the financial year 2025-26.
The rate stood at 12.46 percent for the previous fiscal year, 2024-25. This means the government has reduced the GP Fund profit rate for the current financial year.
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The new rate will apply to the General Provident Fund accounts of all government employees for the financial year 2025-26.
Separate Instructions for Railways and Defence Funds
According to the Finance Ministry, the Ministry of Railways and the Ministry of Defence will issue separate instructions regarding the applicable profit rate for balances held in various provident funds administered by their respective departments.
The General Provident Fund is a mandatory savings scheme operated by the government for its employees. Under the scheme, a specified amount is deducted from an employee’s salary every month and deposited into their GP Fund account.
The government pays annual profit on the accumulated balance, allowing employees to build savings during their service.
The reduction in the profit rate will therefore affect the annual returns credited to government employees’ GP Fund accounts for the 2025-26 financial year.
