PA spokesman Yousif al-Mahmoud said on Tuesday that the decision, which would affect 6,145 public sector employees, was only a temporary measure aimed at applying pressure on Hamas to relinquish control of the besieged Gaza Strip and to reconcile with the PA.
In comments to Anadolu Agency, Mahmoud said the decision had technically come into force on July 1.
There are concrete reconciliation plans, which include the dissolving of Hamas' "administrative committee" controlling Gaza, implementing a national government with full sovereignty over the Strip and a plan for general elections across Palestine, Abbas told the Anadolu Agency.
Hamas has been ruling the Gaza Strip since 2007. Despite mediation efforts by several Arab states, Fatah and Hamas fail to reconcile since the near civil war a decade ago.
Analysts say moves like the PA's are designed to create animosity towards Hamas in Gaza while slightly easing the PA's financial woes.
Hamas spokesperson Fawzy Barhoum called the announcement "immoral and inhumane", adding that it "only serves to tighten the ongoing siege of the Gaza Strip".
Hazem Qassem, another Hamas spokesman, called the decision "a continuation of the policy of collective punishment imposed by the government of Rami Hamdallah [PA prime minister]".
The PA has continued to pay its former civil servants regular salaries since 2007 but reduced them earlier this year.
But the 70,000 PA employees, paid meagre and irregular wages, are now at risk of poverty.
Under the economic conditions in the besieged territory, about 40 percent of the population lives below the poverty line. More than 80 percent would starve without food from international aid agencies.
The latest attempt to pressure the Hamas movement follows last month's move by Abbas to cut PA funding for Israeli-supplied electricity to Gaza by at least 40 percent, leaving the Strip's two million people with just three hours of electricity a day.
Gaza has long struggled with electricity and water supply, relying on feeder lines from Israel and Egypt.
Gaza's only power plant closed in April after running out of fuel. Since then all electricity in Gaza comes from Egypt and Israel.
Thousands of Palestinians have demonstrated in Gaza's streets and along its borders with Israel since April in protest against the pay and electricity cuts.
Source: Al Jazeera and news agencies