8th Pay Commission: The tenure of the Seventh Pay Commission is ending on 31st December 2025, the last date of this month, hence lakhs of central employees and pensioners of the country are now eagerly waiting for the implementation of the Eighth Pay Commission. Questions are constantly arising in the minds of employees that when will the new pay commission be implemented, what will be its process and how much increase will they see in their salaries.

Taking the first important step in this direction, the government has approved the Terms of Reference of the Eighth Pay Commission through the Union Cabinet in October. After this, the Commission has been given 18 months time from November 2025 to prepare its recommendations, during which an in-depth study will be done on the pay structure, fitment factor, revision of allowances and other financial aspects.

When will the 8th Pay Commission be implemented?

Although it is officially expected that the Eighth Pay Commission may be implemented from January 1, 2026, but in reality it may take some more time for the increased salary to reach the accounts of the employees. According to economic experts, it seems difficult to start the payment of revised salaries probably before the end of 2026 or the financial year 2026-27.

This will not be the first time, because even before this, delays have been seen in implementing the recommendations of many pay commissions. If there is a delay, the government can generally pay the arrears considering January 1, 2026 as the date.

How much will the money increase?

As far as salary increase is concerned, it will completely depend on the fitment factor, revision in basic pay and restructuring of allowances. It is believed that this time the salary increase may be slightly higher than the previous pay commission, although its final decision will depend on the recommendations of the commission and the approval of the government.

Overall, the Eighth Pay Commission may bring a big change for central employees and pensioners, but they may have to wait a little longer to get its real benefits.

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The attraction of a government job in India lies not only in its stability but also in the excellent salary structure, which may seem simple but is actually as technical. Often people consider pay scale and in-hand salary to be the same, whereas there is a big difference between the two. The pay scale only gives a range of where the salary will start and what it can reach, but the actual income is much more than this, because the government adds many allowances on top of the basic pay which increases the total income many times.

How is the pay scale decided?

The salary of government employees is not decided directly by the government, rather there is a separate committee for this. Pay commission on the basis of whose recommendations the salary is decided. At present all government employees get salary according to the 7th Pay Commission. This pay scale is based on several factors-

• Employee position
• Job responsibilities
• His qualifications and experience
• In which department is the job

On the basis of all these, the pay level is decided – like Level 1, Level 3, Level 6, Level 10, Level 12. Every level has a fixed salary range.

Salary structure of some major levels

Level 1 (Peon, Helper etc.): Rs 18,000-56,900

Level 3 (Clerk, Assistant etc.): Rs 21,700-69,100

Level 4 (LDC, Steno): Rs 25,500-81,100

This is where people often get confused, because this is just a range, not the actual earning. Then, despite the pay scale being Rs 25 thousand, how come one gets Rs 70-80 thousand in-hand? The key to this secret is hidden in the allowances, which are imposed on top of the basic salary and sometimes they reach more than the basic salary.

Major allowances that increase salary manifold

DA- dearness allowance

This can be 50% or more of the basic salary. At present the DA of most government employees is around 50–60%.

HRA- house rent allowance

It ranges from 9% to 27% depending on the city. This happens most in metro cities.

TA- transport allowance

It is decided according to the post and location of the job.

Medical Facility

Every government employee and family gets medical coverage, the value of salary increases further when added to the separate costs.

Pension / NPS / PF Contribution
Provides financial security during employment and after retirement.

a common example

If the basic pay of an employee is Rs 25,500 then-
• DA (50%) = Rs 12,750
• HRA (18%) = Rs 4,590
• TA + others = around Rs 5,000

Total income is approximately = Rs 47,000- Rs 55,000. And in many departments, including special allowance, it even reaches Rs 70-80 thousand.

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Haryana Government has approved increase in Dearness Allowance (DA) for those state employees who are drawing salary as per the pay structure of 5th Pay Commission. According to the revised rate, DA has been increased from the existing 466 percent to 474 percent, which will be effective from July 1, 2025.

Chief Secretary Anurag Rastogi, who holds the responsibility of Additional Chief Secretary of the Finance Department, has issued an order in this regard. The increased DA will be provided with the salary of November 2025, while the arrears from July to October 2025 will be given in December 2025.

As per financial rules, if the DA amount contains fractions of 50 paise or more, it will be rounded off to the next whole rupee, and fractions of less than 50 paise will be ignored.

Justice Ranjana Desai: There is big news for more than one crore central salaried employees and pensioners. The Central Government has given formal approval to the formation of the much awaited Eighth Pay Commission in the Union Cabinet meeting chaired by Prime Minister Narendra Modi on Tuesday. It has been approved about 10 months after the announcement of the Commission.

The government has given the commission 18 months time to submit its recommendations. On the basis of these recommendations, the increase in salary and pension of government employees can be implemented from the year 2027.

Who is Justice Ranjana Prakash Desai?

Former Supreme Court judge Justice Ranjana Prakash Desai has been appointed as the chairperson of the Eighth Pay Commission. At the same time, IIM Bangalore Professor Pulak Ghosh and Petroleum and Natural Gas Secretary Pankaj Jain have been included as member-secretaries.

Justice Ranjana Prakash Desai had earlier been the chairperson of the Delimitation Commission. Apart from this, she was also appointed as the head of the committee formed on the draft of Uniform Civil Code.

Since her retirement from the Supreme Court in 2014, she has served in various constitutional and administrative roles. Born on 30 October 1949, Ranjana Desai completed her graduation in Arts from Elphinstone College in 1970 and LLB degree from Government Law College, Mumbai in 1973.

When will the Eighth Pay Commission become effective?

Keeping in mind the rising inflation and cost of living in the country, a new pay commission is constituted every 10 years, under which the salaries, allowances and other facilities of the central employees are revised. According to this tradition, the Eighth Pay Commission will be considered effective from January 1, 2026. However, considering the time taken by the Commission to submit its recommendations, the actual pay and pension hike is likely to be implemented from the year 2027.

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Eighth Pay Commission Updates: More than one crore government employees and pensioners across the country are eagerly waiting for the Eighth Pay Commission and are keeping a close eye on every development taking place on it. Although, the government had approved the formation of the Eighth Pay Commission in January 2025, but the official notification has not been issued yet nor has the chairman and members of the commission been appointed.

One crore employees-pensioners waiting

The formation was expected by Diwali, but the Central Government has clarified that intensive discussions are going on with the state governments on this subject. Minister of State for Finance Pankaj Chaudhary had told in the Rajya Sabha that the notification regarding the commission is yet to be issued. However, he also said that the final decision on this has not been taken yet, but preparations are going on.

As soon as the notification is issued, the chairman and members of the commission will be appointed. The formal announcement of the formation of the Eighth Pay Commission was made on 16 January 2025. Its objective is to review the pay structure, allowances and pension of central employees. But according to sources, its implementation is not considered possible before 2026.

What is fitment factor?

Fitment factor plays the most important role in the new pay structure, because it directly affects the calculation of basic salary and pension. In the Seventh Pay Commission, the fitment factor was kept at 2.57. At that time the minimum salary was fixed at Rs 18,000 and minimum pension at Rs 9,000, while DA and DR were 58 percent.

If the government increases the fitment factor to 1.92 in the Eighth Pay Commission, then the minimum salary will be Rs 34,560 and the minimum pension will be Rs 17,280. At the same time, if it is increased to 2.08, then the basic salary can reach Rs 37,440 and pension can reach Rs 18,720. Moreover, as soon as the new pay commission comes into effect, DA and DR will automatically become zero (0%).

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India vs us salary system: The ways of increasing the salary of government employees in India and America are quite different. India has dependence on the Pay Commission, while Personal Management Office and Federal Law in the US handle salary, dearness allowance and job grades.

Pay Commission in India

The salary commission of central government employees and pensioners in India decides the pay commission. This commission is formed in a few years. Its role is to review the existing salary, allowances and pension and also create the structure of the new salary.

Let us tell you that the Pay Commission uses Fitment Factor. It is a multiplier. This multiplier measures the difference between the current pay structure and the proposed salary hike. For example, the Fitment Factor was kept 2.57 by the Seventh Pay Commission. Now suppose the current salary of an employee is 10 thousand and the fitment factor is 2.57. So not the basic salary will be 10 thousand × 2.57 = 25700.

This simply means that the salary of government employees in India increases only when the new pay commission is formed. This is done every 10 years.

How does salary grow in America?

Unlike India, there is no commission based system in America. In America, the government salary is controlled only through Personal Management Office as well as federal law and departmental rules. Employees in America are divided into different grades and levels. The salary here depends on their work, skill, experience and government grades.

Federal Law and Rules

Non -Labor Standard Act decides minimum wage and overtime rules. Labor Dippering Overn issues rules enhancing salary limits for Chhath. Along with this, the President also affects the salary. For example, the Widen administration had increased the minimum wage of the government contract employee to $ 15 per hour. It also included adjustment according to inflation.

Main difference between India and America

The increase in salary in India is done by the Pay Commission and it is at long intervals. But in the US, salary changes are made only through increases related to inflation, federal rules and performance reviews.

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The Sukhu government has given a big financial blow to thousands of government employees of Himachal Pradesh. According to the recommendations of the Seventh Pay Commission in 2022, the salary of employees was increased, which benefited millions of employees. But now the Sukhu government has withdrawn the notification of that rider and issued orders to fix the salary afresh. After this decision, there can be a cut of 10 to 20 thousand rupees in the salary of employees.

Why the decision was made

The government has said that the salary will be corrected under the new notification, so that the salary structure can be improved. However, no recovery will be done from employees who were earlier getting benefits. But 89 categories of employees will have to suffer losses from this decision.

Resentment among employees after verdict

There is resentment among the employees after this decision. The Secretariat Services Employees Organization has immediately demanded reconsideration of this decision. The organization has decided to meet the Chief Minister on Monday. The organization says that this step is not in the interest of the employees and this will have a big impact on the economic situation of government servants.

Himachal Pradesh Secretariat Services Employees Organization called an emergency meeting. It was decided in the meeting that on September 8, the representative of the organization will meet the Principal Secretary (Finance), Chief Secretary and Chief Minister and urge the government to withdraw the notification immediately. The organization says that any loss on the hard earned money of the employees is unacceptable.

Economic crisis will have to face

Employees say that the salary increase in 2022 was working as a relief for him. They can face financial crisis by withdrawing a sudden notification. The organization has appealed to the government to reconsider this decision keeping in mind the interest of the employees.

This issue will be discussed with the Chief Minister and the officials of the Finance Department in the meeting to be held on 8 September. Employees and organization hope that the government will soon withdraw this decision and stop the cut in their salary.

Eighth pay commission: The Central Employees and Pensioners Eighth Pay Commission across the country are eagerly awaited. Those who are expecting their salary-pension to increase. The recent Ambit Capital report has stressed the speculation that the salary of government employees may increase by about 30 to 34 percent. According to the eighth pay commission applied accordingly, it can be implemented in 2026 or FY 2027. After this, the government will have an additional burden of about Rs 1.8 lakh crore.

Pay Commission every 10 years

Pay Commission is formed by the Central Government at an interval of every ten years. In this, the current salary structure of central employees and pensioners, including the soldiers engaged in defense, is amended on the basis of inflation and other economic aspects. Experts are hoping that in the recommendation on behalf of the Pay Commission, it will be recommended to increase the DA according to inflation along with the basic pay of the central employees. Along with this, pension will also be revised according to the new salary structure.

A fitment factor is installed for the salary revision of government employees. If the report of Ambit Capital is to be believed, then a fitment range of 1.83 to 2.46 can be implemented on it. If this happens, the minimum salary will increase from Rs 32,940 to Rs 44,280. The fitment factor is that, according to the new Pay Commission, it is multiply multiply with the existing basic pay for new salary structure.

How much salary will increase?

If a fitment is applied in this way, 2.46 is implemented, then in this case, if someone’s salary is 50 thousand rupees, then his salary will increase to Rs 1.23 lakh. But if the fitment factor is 1.83, then its salary will increase to Rs 91,500.

It is believed that with the implementation of the Eighth Pay Commission, not only the government employees but also for the Indian economy are going to be very beneficial. The reason for this is that when the salary of the people increases, they will spend on consumption and it will get the speed of growth.

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Last year, the Department of Pension and Pensioners Welfare (DOPPW) increased the maximum limit of gratuity for central government employees to Rs 25 lakh. This change came into effect from January 1, 2024, when dearness allowance (DA) reached 50 percent. However, it is not necessary that every government employee gets this full amount.

How is the calculation of gratuity?

The calculation of gratuity is done on the basis of a particular formula. According to the rule, the employee gets 16.5 times or 25 lakh rupees of his last salary (basic pay + dearness allowance), whatever is low, in the form of gratuity. This means that not every employee will get 25 lakh rupees, but gratuity will be fixed on the basis of their service period and salary.

Gratuity types

Government employees get two types of gratuity – retirement gratuity and death gratuity.

Retirement gratuity

A quarter of basic pay + dearness allowance is added for every 6 months of service.

A maximum of 16.5 times salary or 25 lakh rupees, whichever is less, will be given.

At least 5 years of service is mandatory to get gratuity.

Decath gratuity

If the employee dies during service, then his family will get gratuity according to this formula-

Service less than 1 year: 2 times the salary

1 to 5 years: 6 times the salary

5 to 11 years: 12 times the salary

11 to 20 years: 20 times the salary

More than 20 years: half salary for every 6 months

Will there be gratuity under Unified Pension Scheme (UPS)?

The central government is going to launch a new pension scheme, ‘Unified Pension Scheme (UPS)’ from April 1, 2025. The scheme combines the characteristics of Old Pension Scheme (OPS) and National Pension System (NPS). In this, a minimum pension of Rs 10,000 will be given to employees with at least 10 years and a fixed pension will be given to those who complete the entire service period.

Recently, the government was asked in Parliament whether gratuity would be received under Unified Pension Scheme (UPS), as is found in Old Pension Scheme (OPS) and New Pension Scheme (NPS). The Finance Ministry replied that there is an option under UPS, NPS, and “Gratuity will be given as per Central Civil Services (Payment of Gratuity under the National Pension System) Rules, 2021.”

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