The Papua New Guinea government attributed the pay cut to an administrative glitch.
An additional 180 defence personnel flew into Port Moresby on Thursday.
Tensions in the country have risen amid high unemployment and increased living costs.
Papua New Guinea Prime Minister James Marape said Port Moresby was “under stress and duress” but that violence had eased.
“Police were not at work yesterday in the city and people resorted to lawlessness — not all people, but in certain segments of our city,” Marape said in a news conference on Thursday.
“(The) situation report as of this morning shows tension in the city has subsided.”
Many shops and banking services were closed today as business owners repaired damage.
Papua New Guinea is a diverse, developing nation of mostly subsistence farmers where some 800 languages are spoken. It is in a strategically important part of the South Pacific.
With 10 million people, it the most populous South Pacific nation after Australia.
Prime Minister Anthony Albanese appealed for calm. He said his government had not received any requests for help from its closest neighbour.
Papua New Guinea and Australia last month signed a bilateral security pact.
“Our high commission in Port Moresby are keeping a very close eye on what is occurring there, making sure Australians are looked after,” Albanese said today.
Papua New Guinea struggles to contain escalating tribal violence and civil unrest in remote regions and has a long-term aim to increase its police numbers from 6000 officers to 26,000.