As on 31 January 2026, the Department of Public Enterprises (DPE) has released consolidated guidelines for the distribution of Performance Related Pay (PRP) in Central Public Sector Enterprises (CPSEs). These instructions rationalize the calculation method based on the Memorandum of Understanding (MoU) ratings and individual performance appraisals for the financial year 2025-26.
PRP Calculation Rules 2026
Performance Related Pay (PRP) is a variable component of the salary structure for executives in CPSEs. It is directly linked to the profits of the CPSE and the performance rating of the employee. The new consolidated order emphasizes that PRP is payable only if the CPSE generates a profit.
Restriction: The total PRP distributed cannot exceed 5% of the CPSE’s profit before tax (PBT). For loss-making CPSEs, no PRP is payable.
✅ Payment Timeline: DPE has instructed that PRP for the fiscal year should be disbursed only after the accounts are audited and the MoU score is officially notified by the task force.
PRP Ceiling Limits (Grade-Wise)
The percentage of Basic Pay payable as PRP varies by grade. The consolidated guidelines reiterate the following caps based on the 2017 pay revision structure:
| Grade / Level | Designation Example | Max PRP (% of Basic Pay) |
|---|---|---|
| E1 to E3 | Junior Executive / AM | 40% |
| E4 to E5 | Manager / Sr. Manager | 50% |
| E6 to E7 | DGM / GM | 60% – 70% |
| E8 to E9 | ED / Director | 80% – 100% |
| CMD | Chairman & MD | 150% |
The actual payout depends on the “Bell Curve” grading in your Annual Performance Appraisal Report (APAR). Executives rated as “Fair” or “Poor” may not receive PRP. For those looking into wage revisions in other sectors, check the Psgic Nabard Wage Revision 2026 Arrears Pension Rules.
📄 OFFICIAL DOCUMENT REFERENCE
- 📂 Authority: DPE (Wage Cell)
- 📅 Date: January 2026
- 📌 Subject: Consolidated Guidelines on PRP Distribution
View DPE Circular
Impact of Inflation on Pay
While PRP is performance-based, your monthly salary depends heavily on the Industrial Dearness Allowance (IDA). With inflation rising, the DA component is crucial. You can compare this with the Central DA trends in the Expected Da January 2026 Aicpin Update Jan 31 Rules.
Calculation Factors
The formula for PRP is:
PRP = Basic Pay × Physical Performance Score × Financial Performance Score
Ensure your APAR is submitted on time to avoid delays. Any discrepancies in pay fixation should be checked against standard rules, such as the Pay Fixation On Promotion Rules 2026 Option 1 Vs Option 2 Calculator Rules.
Is PRP paid monthly or annually?
PRP is an annual payment. It is distributed only after the financial year closes and profits are audited.
Do all employees get 100% PRP?
No. It is subject to the CPSE’s affordability (5% PBT cap) and the individual’s performance rating.
हिंदी सारांश
लोक उद्यम विभाग (DPE) ने CPSE कर्मचारियों के लिए परफॉरमेंस रिलेटेड पे (PRP) के वितरण पर नए निर्देश जारी किए हैं। यह भुगतान कंपनी के मुनाफे और कर्मचारी की रेटिंग पर निर्भर करता है। E1 से लेकर CMD स्तर तक PRP की सीमा 40% से 150% तक तय की गई है। घाटे में चल रही कंपनियों में यह भत्ता नहीं दिया जाएगा। भुगतान ऑडिट के बाद ही किया जाएगा।
