8th Pay Commission Salary Hike: The central government approved a 2% increase in the dearness allowance (DA) of its employees last week. After this increase, the DA of the employees will now increase from the current 53% to 55%. Dearness Allowance is revised every 6 months, which also increases other parts of the employees' salary such as House Rent Allowance (HRA) and Travel Allowance (TA).

Central government employees will be given the increased dearness allowance for January and February 2025 as arrears. At the same time, this new DA will be implemented to them with the salary of March 2025.

When will the next DA revision happen?

The next review of the dearness allowance will be in November 2025, which will be considered effective from July 2025. This will be the last DA revision under the 7th Pay Commission, as the government has announced the implementation of the 8th Pay Commission from January 2026. DA is an important part of the salary, as it helps in reducing the impact of inflation.

PM Modi approved the formation of the 8th Pay Commission.

Union Minister Ashwini Vaishnaw announced in January that Prime Minister Narendra Modi has approved the formation of the 8th Pay Commission. However, there was no mention of the expenses to be incurred by the government for the 8th Pay Commission in the Union Budget 2025-26 document.

What is the Fitment Factor?

The Fitment Factor is a multiplier used to calculate the revised basic salary of central government employees and pensioners. The 7th Pay Commission had proposed to apply a fitment factor of 2.57 equally to all employees. Whereas the fitment factor in the 6th Pay Commission was around 1.86. Given this, experts believe that the 8th Pay Commission can recommend a fitment factor between 2.28 to 2.86, which can increase the basic salary of employees by 40-50 percent. Please note that the fitment factor is applied to the basic salary of the employee, not the gross salary.

How much will the salary of central employees increase in the 8th Pay Commission?

According to a report by ET NOW, experts say that the basic salary of government employees can increase significantly in the 8th Pay Commission. This will happen due to an increase in the fitment factor. TeamLease Digital CEO Neeti Sharma said that the basic salary of government employees is likely to increase by 25-30 percent and the pension may also increase in this proportion.

He said, "The basic minimum salary is expected to be more than 40,000, along with perks, allowances, and performance pay are also likely to increase." Dr. Vishal Sarin, Professor and Assistant Dean at LPU, said that the 8th Pay Commission is expected to bring a lot of changes in the salary of central government employees, in which the fitment factor is expected to be between 2.28 to 2.86. This may increase the basic salary of employees by 40-50 percent.

He said that for example, an employee currently earning a basic salary of Rs 20,000 can see an increase in his salary between Rs 46,600 and Rs 57,200.

How will DA be decided in the 8th Pay Commission?

At present, the government has not clarified on what basis the dearness allowance will be calculated from January 1, 2026. Till now it is decided based on the All India Consumer Price Index for Industrial Workers (AICPI-IW). But it will be interesting to see whether any change is made in the new formula of DA in the 8th Pay Commission or not.

8th Pay Commission Fitment Factor Calculator

Suppose the 8th Pay Commission recommends a fitment factor of 2.86, then the basic salary of government employees will increase from Rs 18,000 to Rs 51,480, which is calculated using a simple formula - 2.86 x current basic salary. With a fitment factor of 2.86, the minimum pension will increase from Rs 9,000 to Rs 36,000.

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