8th pay commission: When will it be formed & how govt salary is calculated

The salary revisions will now depend on the 'fitment factor', a multiplier that is applied to the current basic pay

The announcement about the 8th pay commission was made on January 17. The recommendations will help around 4.5 million central government employees and 6.8 million pensioners, including defence personnel.

 

The government has announced that the 8th Pay Commission will come into effect from January 1, 2026. However, this does not imply that the commission will be constituted on that date. Instead, the commission will be formed well in advance, conduct its review, and submit its report. If accepted by the government, the recommendations in the report will be implemented from January 1, 2026.

 

When other pay commissions were approved and implemented?

 

 

The 7th Pay commission was approved on September 25, 2013, and officially constituted on February 28, 2014.

The 6th Pay Commission was announced in July 2006 and formally constituted in October 2006.

The 5th Pay Commission was declared in April 1994 and established in June 1994.

 

How will salaries be calculated in the 8th pay commission?

 

A crucial aspect of every pay commission is the fitment factor, which determines the extent of salary and pension increases. The factor is applied to an employee's existing basic pay (which includes their grade pay) to calculate their new basic pay under the revised pay matrix introduced by a pay commission.

 

“Pay commissions are in most cases established every 10 years to assess and provide changes to the remunerations of central government employees. The last pay commission, i.e. the 7th pay commission took effect in January 2016 and gave a raise on the minimum basic pay from Rs 7,000 to Rs 18,000 using the fitment factor 2.57,” said Rohitaashv Sinha, partner, King Stubb & Kasiva, Advocates and Attorneys.

 

How salary may change in the 8th Pay Commission?

 

“For the eighth pay commission, a fitment factor between 2.6 and 2.85 is speculated, potentially increasing salaries by 25-30 per cent and pensions proportionately,” said Neeti Sharma, chief executive officer, TeamLease Digital.

 

“The basic minimum is expected to rise beyond Rs 40,000, along with perks, allowances and performance pay.

 

“Such revisions are crucial to counter inflation, rising living costs, and the widening gap between public and private sector remuneration. Beyond financial benefits, the revised pay scales will also enhance disposable incomes, stimulating consumption and contributing positively to the economy. Periodic revisions reflect the government’s commitment to a fair and equitable system that values its workforce and ensures they are financially empowered,” said Sharma.

  Let us understand the calculation with example

 

For a central government employee with a basic pay of Rs 40,000, the new basic pay would increase to Rs 91,200 based on a fitment factor of 2.28, according to experts. Suppose dearness allowance is set at 70 per cent of the new basic pay, the DA would amount to Rs 63,840. House rent allowance (HRA) at 24 per cent of the new basic pay would amount to Rs 21,888. If basic pay, DA, and HRA is added, gross salary would come to around Rs 176,000.

 

“The changes are likely to be implemented through the Central Civil Services (Revised Pay) Rules, 2025 and may lead to enhanced pension and other retiral benefits such as EPF, Gratuity etc. and recommend changes in salary structures for government employees,” Sinha said