In the current study salt tolerant‐plant growth‐promoting rhizobacteria (ST‐PGPR) Pseudomonas atacamensis KSS‐6, selected on the basis of prominent plant growth‐promoting (PGP) and stress tolerance properties was tested as bioinoculant to improve yield of rice grown in saline soil. The ST‐PGPR KSS‐6 was capable of maintaining the PGP traits up to 200 mM NaCl, however, higher salt stress conditions affected these activities. The study was designed to determine the effect of developed talc‐based bioformulation using KSS‐6 along with organic manure (OM) on growth and yield of paddy under saline conditions. Bioformulation broadcasting was also done to examine the effect on soil properties. It was found that the combinatorial treatment showed positive impact on growth and yield of rice under saline conditions. Co‐application of KSS‐6 with OM showed maximum increment in growth, chlorophyll content, plant fresh weight, and dry weight as compared to untreated control plants. Furthermore, the combinatorial treatment improved the nutrient content (P, K, Zn, Fe, Mg, and Mn) by more than 35% and enhanced the biochemical parameters such as proline, flavonoids, carbohydrates, protein, dietary fiber, and antioxidant content of rice grains by more than 32%. Soil parameters including pH and electrical conductivity (EC), moisture content, total organic carbon, OM, sodium, and chloride ions were also improved upon treatment. There was significant lowering of EC from 7.43 to 4.3 dS/m when combination of OM and bacteria were applied. These findings suggest that the application of KSS‐6 in the form of bioinoculant could be a promising strategy to mitigate negative impacts of salt stress and enhance the yield and nutritional properties of rice grown in degraded and saline soil.