8th Pay Commission: Lakhs of central government employees and pensioners are looking forward to an increase in their salaries and pensions under the 8th Pay Commission, which the Narendra Modi-led cabinet approved in October.
The government has already appointed the members of the 8th Central Pay Commission (CPC), and the new salary and pension rules it recommends will take effect from 1 January 2026.
Central government employees and pensioners are likely to see a major salary hike and an increase in pension from 1 January 2026, as the 7th Pay Commission is set to expire on 31 December 2025.
The Centre sets up a Pay Commission every 10 years to revise basic pay and allowances of employees, as well as pensions for retired workers, impacting lakhs of lives across India.
Alongside salary hikes, the Commission will also adjust the Dearness Allowance (DA) to factor in inflation.
Will all salary hikes be the same?
Under the Centre, there are 18 levels of employees. The 8th Pay Commission salary hike will depend on the level of the employee or pensioner. The basic pay of these employees differs from level to level.
What are the 18 levels of government employees?
- Level 1: Entry-level / Group D employees
- Levels 2–9: Group C employees
- Levels 10–12: Group B employees
- Levels 13–18: Group A employees
Group A employees include top-level government officials, including Cabinet secretaries.
An important factor in determining the 8th Pay Commission salary hike is the fitment factor, which dictates how much overall pay will increase.
What is fitment factor?
The fitment factor is the multiplier the new CPC uses to calculate the new basic pay. The 8th Pay Commission will take into account several factors, including inflation, to determine the fitment factor.
The current Pay Commission used a fitment factor of 2.57. However, this does not mean that the entire salary hike was by 2.57 times, since it was only added to the basic pay, Mint previously reported.
As per a report by Times Now, experts are discussing three possible fitment factors: 1.92 (conservative), 2.15 (moderate), and 2.57 (optimistic). The higher the fitment factor, the bigger the salary hike.
How much will salaries increase under the 8th Pay Commission for each level of employee?
8th Pay Commission salary hike will be calculated using the following formula —
Revised Basic Pay = Current Basic Pay x Fitment Factor
This is the lowest that the salaries are likely to increase.
This is reportedly the most an employee can expect to see their salary increase.
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