8th Pay Commission update: How much salary hike can central employees expect? Fitment factor likely to be…

While the 8th Pay Commission is unlikely to be implemented before mid-2027, employees and retirees are wondering how much salary and pension hike they can expect when the 8th CPC recommendations come into force.

8th Pay Commission Salary Hike: Prime Minister Narendra Modi-led Union Cabinet approved the Terms of Reference (ToR) for the 8th Pay Commission earlier this month, which is expected to benefit over 50 lakh central government employees and more than 69 lakh pensioners.

While the 8th Central Pay Commission (8th CPC) is unlikely to be implemented before mid-2027, employees and retirees are wondering how much salary and pension hike they can expect when the 8th CPC recommendations come into force.

How much salary hike is expected?

Akin to previous Pay commissions, the salary hike under the 8th Pay Commission will depend upon the fitment factor, which was 2.57 in the 7th Pay Commission, and based on various estimates, will be 1.92 for the 8th Pay Commission. For example, based on the fitment factor, the new basic pay for Level 6 central employees will be Rs 67,968, (current basic pay Rs 35,400 x 1.92 = Rs 67,968).

So, the basic pay of Level 6 central employees will increase to nearly Rs 68,000, and various allowances will be added which will be the net monthly salary for this pay scale.

What is the expected fitment factor?

According to various estimates, the fitment factor for the 8th Pay Commission is expected to be between the range of 1.83 to 2.57, with the Staff Side of the National Council-Joint Consultative Machinery (NC-JCM), saying that it believes the fitment factor may be 2.57, similar to the 7th Pay Commission.

In its report, Kotak Institutional Equities, said the 8th Pay Commission is likely to adopt a fitment factor of 1.8, which would raise the minimum basic salary of central government employees from Rs 18,000 to Rs 30,000 per month. On average, central employees are expected to receive a 13% real salary hike, it noted.

Similarly, a report by Ambit Capital noted that the fitment factor is expected to be fixed in the range of 1.83 to 2.46. “As per back-of-the-envelope calculations, depending on the salary growth seen over different Pay Commissions, the range of fitment factors that the government could be looking at lies between 1.83 and 2.46,” the firm said in its July report.

However, all of these are mere calculated speculations as the fitment factor will only be confirmed after the 8th Pay Commission recommendations are approved by the Union Cabinet.

How fitment factor is calculated?

Fitment factor, which is used to restructure the salary structure of employees in every Pay commission, is arrived upon after taking into to account various factors such as inflation, cost of living index, and Dr. Wallace R. Aykroyd’s formula, which was originally designed to calculate a need-based minimum wage.

The formula accounts for essentials like food, clothing, and housing for an employees plus family, often a spouse and two children, based on consumption units.

The fitment factor for the 7th Pay Commission was fixed at 2.57.

When will 8th Pay Commission be implemented?

Earlier this month, on November 3, Prime Minister Narendra Modi-led Union Cabinet approved the terms of reference (ToR) of the 8th Pay Commission, which will benefit 50 lakh central government employees and 69 lakh pensioners and will have implications on the emoluments of the staff of state governments.

If we go by the implementation of previous pay commissions, the government usually takes about 18 to 24 months to implement the recommendations of the commission. Thus, its unlikely that 8th Pay Commission would be implemented before mid-2027, while reports suggest that the next CPC implementation might be pushed back to early 2028.

Meanwhile, amid the controversy surrounding the ToR for the 8th CPC,  several employee bodies, such as the All India Defence Employees Federation (AIDEF), Confederation of Central Government Employees & Workers (CCGEW) and Bharat Pensioners’ Samaj (BPS) have written to Prime Minister Narendra Modi and Finance Minister Nirmala Sitharaman, demanding that the 8th Pay Commission should be implemented from January 1, 2026.