8th Pay Commission: What will be the fitment factor and how will central government employees’ new salary levels be calculated? Explained
8th Pay Commission salary hike calculation: Central government employees and pensioners can soon look forward to getting higher salaries and pensions respectively, with the Terms of Reference for the 8th Central Pay Commission being approved by the Cabinet this week.The 8th Central Pay Commission has been tasked with submitting a report in 18 months and the recommendations, once approved by the government, will likely be effective retrospectively from January 1, 2026.
8th Pay Commission : What is fitment factor & why is it important for salary hike calculation?
According to an ET report, the 7th Pay Commission saw a fitment factor of 2.57 being implemented. The fitment or multiplier factor for the 8th Pay Commission will be known after the commission’s report and government’s approval.Manjeet Singh Patel, who heads the All India NPS Employees Federation as National President, told ET that calculation of new basic pay involves multiplying the existing basic salary with the fitment factor assigned by the latest pay commission. To understand this better: take an example where an individual has a basic pay of Rs 35,000. This when multiplied by a fitment factor of 2.11, results in a new basic salary of Rs 73,850.Also Read | 8th Pay Commission: How much salary & pension hike should central government employees, pensioners expect? Top things to knowNexdigm’s Director of Payroll Services, Ramachandran Krishnamoorthy, said that percentage-based allowances like HRA will increase proportionally with the revised basic pay upon notification. He was quoted as saying that fixed benefits such as transport allowance undergo separate reviews and their revisions typically follow several months after the implementation of the 8th Pay Commission’s recommendations.
8th Pay Commission: The role of Dearness Allowance
Whilst dearness allowance isn’t the direct determinant of fitment factor, pay commissions tend to consider the DA rate, which is calculated based on basic pay, as one of the crucial elements whilst establishing the fitment factor.To illustrate, Patel explains that with the current DA at 58% and a projected 12% increase by the time the 8th Pay Commission’s recommendations take effect, DA could possibly reach 70%. The government then assesses the growth factor, which previously stood at 24%. The pay commission’s calculations also incorporate family units, earlier set at 3 but potentially rising to 4 this time. A shift to 4 family units could result in an additional 13% increase. The fitment factor takes into account all of these things.
8th Pay Commission: What will be the impact of fitment factor on salary?
Patel told ET that whilst the fitment factor influences the basic salary and HRA, the DA resets to zero under a new pay commission. As a result, the overall salary increase for central government employees may typically range between 20-25%.In the context of the 7th Pay Commission, a standard factor of 2.57 was implemented uniformly for all positions, Krishnamoorthy said. Whilst the government might maintain this consistent approach for ease of administration, there exists a possibility of introducing a marginally higher multiplier for lower salary bands to reduce income gaps.Also Read | Husband missing for over 7 years: How wife won a case in Chhattisgarh High Court to get central government pension – ruling explainedAccording to Patel, senior-level staff have increased opportunities for career advancement compared to junior staff. Therefore, the commission could potentially allocate higher fitment factors to lower-ranking staff and lower factors to senior positions. Additionally, consideration might be given to consolidating certain pay levels to streamline the pay structure.Currently, central government employees are classified across 18 distinct pay levels.For a central government employee with basic pay of Rs 50,000, the revised salary calculation under a 2.0 fitment factor is straightforward.Krishnamoorthy says if the fitment factor is fixed at 2, then the employee’s current basic pay of Rs 50,000 under the 7th Pay Commission would be multiplied by it.Also Read | Income Tax department doubts Rs 10 lakh gift – brother gets tax notice for cash received from sisters; how he appealed & won the caseThis calculation results in a new basic pay of Rs 1,00,000. The employee would be positioned at the nearest higher cell in the revised pay matrix. Additional benefits such as DA, HRA and transport allowance would then be computed based on this new basic salary.According to Krishnamoorthy, pension revisions for central government retirees typically follow the same fitment factor. Using the 2.0 factor as an example, a pensioner currently receiving Rs 30,000 would have their basic pension increased to approximately Rs 60,000, pending final approval and adjustments.
