The countdown to the 8th Pay Commission has begun, as the tenure of the 7th Pay Commission officially ends on December 31, 2025. With the government already notifying the commission and approving its Terms of Reference (ToR), attention has now shifted to two critical questions for central government employees and pensioners: when will the 8th Pay Commission be implemented, and how much salary hike and arrears can be expected?
According to current estimates, if the 8th Pay Commission is implemented in 2028 but made effective retrospectively from January 1, 2026, employees could receive a substantial two-year arrears payout. Here is a detailed breakdown of how the calculation works and what employees should realistically expect.
The government has already constituted the 8th Pay Commission under the chairmanship of Justice Ranjan Desai. The commission has been given 18 months to prepare its report. Based on previous pay commissions, once the report is submitted, the government typically takes an additional 3 to 6 months for review, approvals, and final notification.
Following this timeline, the most likely implementation window appears to be late 2027 or early 2028, instead of January 2026. However, if the government decides to apply the recommendations retrospectively from January 2026, employees will become eligible for arrears covering the delay period.
While delays often cause concern, they can work in favor of employees financially. If the recommendations are backdated, employees will receive lump-sum arrears for the entire period between the effective date and the actual implementation date.
This means a delayed rollout could translate into higher one-time payments, similar to what was seen during the 7th Pay Commission.
Market experts, including analysts from Ambit Capital, estimate that salaries and pensions may increase by 30% to 34% under the 8th Pay Commission. The final hike will depend largely on the fitment factor, which determines how the new basic pay is calculated.
Estimated fitment factor range: 1.83 to 2.46
Most common projection: 2.28
Dearness Allowance (DA) is likely to be merged with basic pay before revision, as has been standard practice.
Let’s understand this with an example:
Current basic pay: ₹18,000
Current gross salary (including DA): approx. ₹35,000
If the pay increases by 34%, the revised gross salary would be around ₹46,900 per month.
👉 Monthly increase: ₹11,900
If the 8th Pay Commission is implemented in January 2028 but made effective from January 2026, employees would receive arrears for 24 months.
Monthly salary increase: ₹11,900
Arrears period: 24 months
Total arrears: ₹2.85 lakh (approx.)
This means even employees at the minimum pay level could receive ₹2.8–3 lakh as arrears. For higher pay levels, the arrears amount could run into several lakhs more.
Arrears have historically been one of the biggest financial benefits of every pay commission. During the 7th Pay Commission as well, employees received significant one-time payouts, which helped many manage loans, savings, and major expenses.
Even if implementation is delayed, backdated arrears help offset inflation and lost time, making the overall impact financially rewarding.
The scope of the 8th Pay Commission goes beyond basic salary revision. It will also examine:
House Rent Allowance (HRA) and other allowances
Pension and Dearness Relief (DR)
Gratuity and retirement benefits
Pay parity across services
Incentive and performance-linked structures
Final decisions on these components will be taken only after the commission submits its report and the government completes its evaluation.
Final Fitment Factor: This will determine the exact salary hike.
Effective Date: Whether the government applies recommendations immediately or retrospectively.
Budget Allocation: Indicates the government’s readiness to fund salary hikes and arrears.
DA Reset or Merger: This will directly affect the revised salary structure.
Until the new pay structure is implemented, DA and DR will continue as per existing rules under the 7th Pay Commission.
If the 8th Pay Commission is implemented in 2028 with retrospective effect from 2026, central government employees could receive significant arrears running into lakhs, along with a meaningful salary hike. While the wait may feel long, the eventual financial gain could be well worth it—provided the final recommendations align with current expectations.
