PIDE Recommends Rs. 45,000 Monthly Minimum Wage Benchmark for FY2026-27
The Pakistan Institute of Development Economics (PIDE) has proposed a national minimum wage reference benchmark of Rs. 45,000 per month for the fiscal year 2026-27, compared to the current notified minimum wage of Rs. 40,000.
The recommendation is part of PIDE’s Policy Viewpoint No. 62, titled “Reforming Minimum Wage Determination in Pakistan: From Wage Announcements to Wage Governance.” The report outlines a framework designed to support transparent, evidence-based wage setting while considering economic conditions, labour market realities, and provincial implementation requirements.
According to the study, the proposed model is aligned with internationally recognized labour standards and seeks to balance worker welfare, business sustainability, productivity growth, and broader economic stability.
Dr. Nadeem Javaid, Vice Chancellor of PIDE and Member of the Planning Commission of Pakistan, emphasized the importance of a structured wage governance system that promotes transparency, predictability, and long-term economic development.
The proposed framework is built around four key components:
- Evidence-based wage determination
- Provincial flexibility within a national benchmark
- Improved compliance and enforcement mechanisms
- Regular reporting and performance monitoring
Under the proposed approach, provinces would retain the authority to set minimum wages according to their economic circumstances while using the national benchmark as a reference point.
Indicative benchmarks suggested in the report include:
- Punjab: Rs. 45,000
- Khyber Pakhtunkhwa: Rs. 45,000
- Sindh: Rs. 46,000
- Balochistan: Rs. 45,500
The report notes that wage policy plays an important role in household income, labour market participation, productivity, and economic activity. Researchers argue that an effective wage governance framework can contribute to improved living standards while supporting sustainable economic growth.
PIDE researchers also highlighted the importance of practical implementation measures, particularly given the large share of workers employed in the informal sector. The study recommends a phased compliance strategy, beginning with public procurement projects, outsourced government services, and larger registered businesses before expanding to other sectors.
Among its key recommendations, the report proposes:
- Adoption of a Rs. 45,000 national reference wage benchmark for FY2026-27
- Inclusion of minimum wage compliance requirements in public procurement and service contracts
- Gradual expansion of enforcement mechanisms across different sectors of the economy
- Annual provincial implementation reports to improve transparency and accountability
PIDE has submitted the proposed framework to the Planning Commission of Pakistan for review as part of ongoing discussions on labour market reforms and wage governance policies.
