Federal government lowers the General Provident Fund profit rate from 12.46% to 12.05% for the 2025-26 financial year.
ISLAMABAD: The federal government has reduced the profit rate on balances deposited in the General Provident Fund (GPF) accounts of government employees for the financial year 2025-26.
According to a notification issued by the federal government, the annual profit rate on the General Provident Fund has been fixed at 12.05% for 2025-26, compared with 12.46% during the previous financial year, 2024-25.
The new rate represents a reduction of 0.41 percentage points from the rate applicable during the previous financial year.
Under the notification, the 12.05% annual profit rate will apply to amounts deposited in the GPF and the credit balances of subscribers for the financial year 2025-26. The rate will be used to calculate the annual profit on the accumulated balances of eligible federal government employees.
The notification also refers to various provident funds administered by the Ministry of Railways and the Ministry of Defence. According to the announcement, the two ministries will issue separate instructions regarding the applicable profit rates for the balances held in provident funds under their respective administrations.
The General Provident Fund is a compulsory savings arrangement for federal government employees. Under the system, a prescribed amount is regularly deducted from employees’ salaries and credited to their GPF accounts.
The accumulated amount remains in the account during the employee’s service and earns annual profit at a rate determined by the government. Upon retirement or in other circumstances allowed under the relevant rules, employees receive the accumulated balance along with applicable profit.
The reduction in the profit rate means government employees holding larger GPF balances will receive comparatively lower annual returns than they would have received under the previous 12.46% rate.
For example, an employee with a substantial balance in a GPF account will have profit calculated at 12.05% under the new rate instead of 12.46%. The actual difference in the amount earned will depend on the balance maintained in each employee’s account.
The revised rate has been set specifically for the 2025-26 financial year, and eligible GPF accounts will be calculated accordingly.
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