8th Pay Commission update: What is Fitment Factor and how it will determine salary hike? 8th CPC to have…

Akin to previous Pay commissions, the salary hike under the 8th Pay Commission will depend upon the fitment factor.

8th Pay Commission fitment factor: The Union Cabinet led by Prime Minister Narendra Modi 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, who are likely to a significant hike to their salary and pension, respectively.

But how much salary hike can central government employees expect under the 8th Central Pay Commission (8th CPC)? Well, akin to previous pay commissions, the salary hike and pension revision will depend on the fitment factor, which is used to determine salary structure for employees and pensioners.

What is fitment factor?

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, and is expected to be between the range of 1.83-2.57 for the 8th Pay Commission.

How fitment will determine salary hike?

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 somewhere around 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.

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.

When will govt implement 8th Pay Commission?

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.