8th Pay Commission: All you need to know

Since 1st January 2026 is approaching in 4 days, there is hype about 8th pay commission in about 1 crore (10 million) people of india. And it is a very good time to start a discussion about the pay commission like what is pay commission, what is fitment factor, and what all other factor is includes. In this article, we are going to disucss everything about pay commission from ground up.

What is a Pay Commission?

The Pay Commission is a body set up by the Central Government that reviews and recommends changes to the salary structure of employees. Think it as a “Salary Review Committee”.

• Purpose: Prices of food, rent, and clothes (inflation) go up every year. To make sure government employees can still afford a good life, the government reviews their salaries every few years.
• Time Period: A new Pay Commission is setup every 10 years almost. It is not a fixed number.

Current News: The 8th Pay Commission

The 7th Pay Commission was started in 2016 and is coming to an end on December 31, 2025. Here is the latest update on the 8th Pay Commission:

A. Officially Approved

After much waiting, the Union Cabinet officially approved the formation of the 8th Central Pay Commission (CPC) in late October 2025. The government issued the official “Terms of Reference” (the list of rules they must follow) on November 3, 2025.

B. Who is in charge?

The commission was headed by Justice (Retd.) Ranjana Prakash Desai, a former Supreme Court judge. This is historic because she is the first woman to lead a Pay Commission. She is joined by experts from IIM Bangalore and senior government secretaries.

C. When will the money reach people?

• Official Start Date: The new salary structure is expected to be effective from January 1, 2026.
• The Delay: The committee has been given 18 months to finish its study. This means they will submit their final report around mid-2027.
• Arrears: Don’t worry—even if the decision is made in 2027, the government usually pays the “extra” money from January 2026 onwards in one big lump sum (called arrears).

How Much Will Salaries Increase?

While the final numbers aren’t out yet, here is what experts and employee unions are discussing:

Details	Current (7th Pay Commission)	Expected (8th Pay Commission)
Minimum Basic Salary	₹18,000	₹21,600 to ₹34,000 (Estimated)
Minimum Pension	₹9,000	₹10,000 to ₹20,000 (Estimated)
Estimated Hike	—	20% to 35% increase in total pay

Key Terms You Will Hear

To better understand the news, remember these three terms:

• Fitment Factor: This is the “Magic Multiplier.” If the government sets it at 2.5, they will multiply your current basic pay by 2.5 to get your new salary. Unions are currently demanding a factor between 2.64 and 3.68.
• Pay Matrix: A big table that shows the salary levels from a Peon (Level 1) to a Cabinet Secretary (Level 18). The 8th Pay Commission will redesign this table.
• DA (Dearness Allowance): This is a small “extra” payment given every 6 months to handle inflation. When a new Pay Commission starts, the old DA is usually merged into the basic salary to give a fresh start.

Check out: How to Improve CIBIL Score?

What is Fitment Factor?

Think of the Fitment Factor as a bridge. It is a single number used to jump from your old salary (7th Pay Commission) to your new salary (8th Pay Commission).

How it works:

The government takes your Current Basic Pay and multiplies it by this factor. The result becomes your New Basic Pay.

• Current (7th CPC) Factor: 2.57
• Expected (8th CPC) Factor: This is the big debate! Estimates range from 1.92 (conservative) to 2.86 (what unions want). Some even hope for 3.0.

The Calculation Example:

If an entry-level employee earns ₹18,000 today, here is how different Fitment Factors would change their life:

If the Factor is…	The Math	New Basic Salary
1.92 (Low)	$18,000 x 1.92	₹34,560
2.28 (Mid)	$18,000 x 2.28	₹41,040
2.86 (High)	$18,000 x 2.86	₹51,480

What is Pay Matrix?

Before the 7th Pay Commission, salaries were a confusing mess of “Pay Bands” and “Grade Pay.” The Pay Matrix simplified this into a single, easy-to-read table. I call it a “career ladder” for government servants.

Imagine the Pay Matrix as a giant grid (like a spreadsheet):

• The Horizontal Rows (Levels 1 to 18): This shows your Rank.
  • Level 1-5: Support staff, clerks, junior technicians.
  • Level 6-9: Mid-level officers, inspectors, engineers.
  • Level 10-18: Senior officers (IAS/IPS), top scientists, and the Cabinet Secretary.
• The Vertical Columns (Stages/Cells): This shows your Experience. Every year you stay in the same job, you move one step down the column. This usually gives you a 3% annual increment.

Download the Pay Matrix here : Click Here

Salary Calculation Example

If your Current Basic Pay (under the 7th CPC) is ₹50,000, here is how your new salary might be calculated starting January 2026.

Since the final number isn’t fixed yet, we will look at two popular scenarios being discussed by experts:

A: The “Conservative” Fitment Factor (2.15)

If the commission keeps the hike moderate to save government costs:

• New Basic Pay: ₹50,000 x 2.15 = ₹1,07,500
• DA (Dearness Allowance): Starts at 0% (It merges into the new basic).
• Estimated HRA (27% for Metro): ₹1,07,500 x 0.27 = ₹29,025
• Total Estimated Gross: ₹1,36,525

B: The “Optimistic” Fitment Factor (2.86)

If the government accepts the full demand of the employee unions:

• New Basic Pay: ₹50,000 x 2.86 = ₹1,43,000
• DA (Dearness Allowance): Starts at 0%.
• Estimated HRA (27% for Metro): ₹1,43,000 x 0.27 = ₹38,610
• Total Estimated Gross: ₹1,81,610

Important Note: While the Gross salary looks much higher, remember that the 50% or more DA you are currently receiving is “consumed” or merged into this new Basic Pay. This is why it’s called a “Fitment” – it fits your old total pay into a new, higher base.

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