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New Delhi: The Central Government has approved the terms of reference (ToR) for the 8th Pay Commission. Consequently, significant changes are expected in the salaries, pensions, and allowances of approximately 55 lakh serving employees and 69 lakh pensioners. The Commission has been granted an 18-month timeframe to submit its recommendations.
The fitment factor is a multiplier used to revise the basic salary of central government employees and pensioners. It plays a crucial role in determining the new salary structure.
A fitment factor of 2.57 was implemented under the 7th Pay Commission, effective from 2016. Under this, an employee’s basic salary of Rs 15,000 increased to Rs 38,550.
Central employee unions and associations have primarily demanded an increase in the fitment factor and a substantial hike in the minimum basic pay for the 8th Pay Commission. Some unions have proposed raising the fitment factor to between 3 and 5, or even higher. However, pension experts believe that such significant demands may not align with financial realities.
According to pension experts, the Commission might alter the method used to calculate the minimum wage. This could involve increasing the number of family consumption units from three to five and considering a fitment factor of 2.64.
The final salary hike will depend on the Commission’s recommendations and the government’s subsequent approvals. This can be understood through two separate examples…
First example (based on 60% DA): Suppose an employee’s basic pay is Rs 100. Including a 60% Dearness Allowance (DA), their total earnings amount to Rs 160. If the basic pay doubles to Rs 200 following the new fitment factor, their effective salary would see an increase of approximately 25% compared to the current Rs 160.
Second example (with a fitment factor of 3): If the government raises the current fitment factor from 2.57 to 3.0, the entry-level basic pay could see an increase of over 15–20%. In this scenario, a basic salary of Rs 15,000 would jump directly to Rs 45,000.
Experts state that even if the government sets a fitment factor lower than what employee unions are demanding, there would still be a significant rise in government expenditure, and employees would see a respectable hike in their salaries.
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The Central Government approved the Terms of Reference (ToR) for the 8th Pay Commission in October 2025 and granted the panel an 18-month timeframe to submit its report. Although the 8th Pay Commission is slated to come into effect from January 1, 2026—replacing the 7th Pay Commission—the commission is expected to take about 18 months to complete its work.
The commission has extended the deadline for submitting memoranda to June 15, 2026. Following this, suggestions from all stakeholders will be examined, and final recommendations will be prepared.
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