Seventh Pay Commission: Dress allowance rule changed for new govt recruits

Employees joining work after July 2025 will not get the full annual amount, under the revised 7th Pay Commission rules

The central government has revised the dress allowance policy for all new recruits joining Central Government services after July 1, 2025. The Finance Ministry issued a formal order on March 24 and it was sent to government departments on June 16.

 

What’s the new rule?

 

New Central Government employees who join after the annual disbursement of the dress allowance in July will no longer receive the full annual amount. Instead, they will receive a proportionate dress allowance, calculated based on the number of months they will serve till June of the following year.

 

Key points:

 

The dress allowance is typically paid in July each year.

 

For recruits joining after July, the allowance will be prorated.

 

Formula used:

 

Annual Dress Allowance × (Number of months served from joining month till June) ÷ 12

 

Example for clarity

 

If the annual dress allowance is Rs 10,000 and an employee joins in November, they will receive the allowance for 8 months (November to June):

 

Rs 10,000 × 8 / 12 =  Rs 6,667

 

No change for existing employees

 

This revised rule does not affect existing employees who continue to receive the full annual dress allowance in July, as per the earlier guidelines issued in 2017.

 

Rule on retiring employees Under Review

According to the notification, for employees retiring after July 2025, the Department of Posts has sought clarification from the Ministry of Finance.

 

Until a final decision is issued, the current rule remains in place:

 

Those retiring after December are eligible for full dress allowance.

 

Those retiring before December will receive half the allowance.

 

Dress allowance is granted to employees in various departments, such as postal workers, railway staff, and security personnel, who are required to wear uniforms. The new move is seen as a rational way to align allowances with actual service periods and avoid overpayments.