8th Pay Commission - Basic Pay and Allowances News for Central Government Employees

The Indian Government has officially approved the formation of the 8th Pay Commission, marking a significant move toward revising salaries and pensions. This development is set to impact nearly 4.5 million central government employees and about 6.8 million pensioners across the country. If all goes as planned, the new pay structure is expected to come into effect from 01 January 2026.
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20 August 2025

The 8th Pay Commission has become a hot topic among government employees across India. This important development will shape the financial future of millions of central government staff. Prime Minister Narendra Modi recently approved the formation of the 8th Pay Commission. The commission will review and recommend reforms in pay and pensions for central government employees. This article will explore the meaning, latest news, expected salary hikes, and possible pay slabs of the 8th pay commission.

What is the 8th Pay Commission?

The 8th pay commission is a panel set up by the government of India to review and revise the salary structure of central government employees. The commission examines factors like inflation, economic growth, and living standards before making recommendations. The 8th pay commission will replace the 7th Pay Commission, which has been in effect since 2016. It will be implemented from January 1, 2026, as announced by the government.

Information and Broadcasting Minister Ashwini Vaishnaw stated that the government will soon appoint a chairman and two members to the panel. Are you planning to buy a home soon? Check your eligibility for a Bajaj Housing Finance Home Loan by simply entering your mobile number and OTP. You may already be eligible for competitive interest rates starting at 7.45%* p.a.

Key highlights of the 8th Pay Commission

The 8th Pay Commission has generated widespread anticipation among central government employees and pensioners. Here are the most important updates and expectations:

Approval and rollout

  • The Union Government announced the 8th Pay Commission on 17 January 2025.

  • It is scheduled to come into effect from 1 January 2026.

  • Before implementation, the Commission will be formally set up, and its detailed report will be presented to the government for approval.

Beneficiaries

  • Around 49 lakh serving employees and nearly 65 lakh retired pensioners are expected to benefit from the salary and pension revisions.

Fitment factor and salary increase

  • Experts suggest the fitment factor could range between 2.6 and 2.85.

  • This means salaries may rise by 25–30%.

  • For instance, a current basic pay of Rs. 20,000 may rise to between Rs. 46,600 and Rs. 57,200.

Pension revisions

  • The minimum pension, which currently stands at Rs. 9,000, could increase to around Rs. 22,500–25,200, depending on the final fitment factor.

  • Pension hikes will be aligned proportionally with the salary structure.

Historical timeline

  • The 7th Pay Commission (2016) introduced a 2.57 fitment factor.

  • The 6th Pay Commission (2006) had a factor of 1.86.

  • The 5th Pay Commission was constituted in 1994.

Impact on contributions

  • NPS (National Pension System): Employees contribute 10% of their basic + DA, while the government contributes 14%. These contributions will rise once the revised pay is enforced.

  • CGHS (Central Government Health Scheme): Subscription rates will also be revised, as they are linked to salary slabs.

8th Pay Commission: What changes can employees expect in basic pay and allowances?

The 8th Pay Commission has been approved to restructure the pay and pensions of over 1 crore central government staff and retirees, with implementation planned from 1 January 2026.

One of the most significant aspects under review is the fitment factor, which determines how much current pay will be multiplied to arrive at the revised structure. While the 7th Pay Commission used a factor of 2.57, the new one could be set as high as 2.86.

If that happens, the minimum basic salary may increase from Rs. 18,000 to Rs. 51,480, while pensions may rise from Rs. 9,000 to Rs. 25,740.

Impact on salaries and allowances

  • The Commission is expected to revise not just the basic pay, but also allowances such as House Rent Allowance (HRA) and Travel Allowance (TA).

  • These allowances vary depending on job location and duties, which means two employees with the same grade could still have different take-home pay due to differing entitlements.

Effect on NPS and CGHS contributions

  • NPS: Employees currently contribute 10% of basic pay + DA, while the government contributes 14%. As salaries increase, these contributions will also automatically rise.

  • CGHS: Subscription costs are linked to salary levels. With higher basic pay, employees will see changes in CGHS deductions too.

Estimated salary hikes for various grades

  • Grade 2000 (Level 3): Revised basic pay may be Rs. 57,456. With HRA and TA, the gross salary could be Rs. 74,845, with a take-home of around Rs. 68,849.

  • Grade 4200 (Level 6): Revised pay expected to be Rs. 93,708. Gross salary: Rs. 1,19,798, net around Rs. 1,09,977.

  • Grade 5400 (Level 9): New basic pay may reach Rs. 1,40,220. Gross: Rs. 1,81,073, with take-home about Rs. 1,66,401.

  • Grade 6600 (Level 11): Expected pay of Rs. 1,84,452, gross about Rs. 2,35,920, and net salary close to Rs. 2,16,825.

In short, the 8th Pay Commission is projected to deliver substantial increases in both pay and pensions, while also revising allowances and contributions linked to the pay structure.

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Why are pay commissions important?

Pay commissions serve a crucial purpose in the Indian administrative system. They address issues faced by government employees related to their pay and pensions while accounting for the rising cost of living. These commissions ensure that government salaries remain competitive and fair.

Beyond their impact on government employees, pay commissions have broader economic implications. When government employees receive salary increases, their spending power grows. This leads to increased consumption, which stimulates economic growth. The 8th pay commission will likely boost market sentiment and consumer spending across various sectors.

Why is fitment factor crucial?

The fitment factor is the key determinant in calculating revised salaries under the 8th pay commission. It acts as a multiplier used to calculate the new pay structure for government employees. The fitment factor directly influences how much financial benefit employees will receive.

For the 8th pay commission, experts project a fitment factor between 2.28 and 2.86. In comparison, the 7th Pay Commission used a fitment factor of 2.57, while the 6th Pay Commission had a fitment factor of 1.86. The higher the fitment factor, the greater the salary increase for government employees.

Factors influencing the fitment factor

Several key elements determine the fitment factor recommended by the pay commission:

  • Inflation rate: The commission analyses inflation trends and their impact on employees' purchasing power. They consider how price increases affect everyday expenses and major purchases like homes or vehicles. Looking to buy your dream home? Check your eligibility for a Bajaj Housing Finance Home Loan that offers interest rates starting from just 7.45%* p.a. You may qualify for a loan amount of up to Rs. 15 Crore* with a simple mobile verification.

  • Living expenses: Daily and monthly expenses form a critical part of the assessment. The commission examines costs of essential items like food grains, vegetables, milk, oil, and utilities. They also factor in expenses related to education, healthcare, and social obligations.

  • Economic situation: The country's overall financial health significantly influences the recommended fitment factor. A growing economy with strong tax revenues provides more room for generous salary increases.

  • Employee performance: The commission evaluates the overall productivity and effectiveness of government employees. Strong performance metrics support the case for higher salary revisions.

  • Market comparisons: Salaries in the private sector serve as benchmarks for government pay scales. The commission aims to reduce the gap between government and private sector compensation to attract and retain talent.

Fiscal constraints: The government's budget limitations play a practical role in determining the fitment factor. The commission must balance employee needs with fiscal responsibility.

8th CPC revised salary estimates: IAS, IPS, IFS, IRS officers' projected salary hike calculations at 2.0, 2.25, 2.5 fitment factors

The announcement of the 8th Central Pay Commission (CPC) has created a lot of curiosity and expectations among government employees. Civil servants such as IAS, IPS, IFS, and IRS officers, who hold key administrative roles in the country, are keen to know how much their salaries may increase. The final report of the 8th CPC is yet to be released, but salary projections are being discussed widely, mainly based on the likely fitment factors. To provide an idea, calculations have been made using three possible multipliers – 2.0, 2.25, and 2.5. Below is a detailed breakdown of how pay levels may look once the new commission is implemented.

1. Civil services in India

The Union Public Service Commission (UPSC) selects candidates for the civil services through the Civil Services Examination (CSE). There are 24 services in total, but the most sought-after remain the IAS, IPS, IFS, and IRS. These officers work in diverse areas of governance, policy-making, and administration.

2. Salary slabs for IAS, IPS, IFS, IRS officers in 7th CPC

Currently, under the 7th CPC, civil servants in Group A begin at Level 10. Their salaries increase as they gain experience and take up senior positions, with Level 18 being the highest slab, applicable to the Cabinet Secretary.

3. Salary chart for Group A civil servants in India

Group A civil servants’ pay levels run from Level 10 to Level 18. Entry-level officers start at Rs. 56,100, while the Cabinet Secretary, the top post in the hierarchy, currently earns Rs. 2,50,000 as basic pay.

4. Fitment factor for 8th CPC

The fitment factor is the multiplier applied to revise salaries and pensions. While the exact figure will be confirmed only when the 8th CPC report is approved, estimates range between 1.92 and 2.86. For simplicity, calculations here have been made using 2.0, 2.25, and 2.5.

5. Calculations for salary projections

The figures below show how the basic pay of officers at Levels 10 to 18 may change under different fitment factors. The projections use the minimum salary in each level.

6. Estimated pay for Level 10 civil servants

  • Current basic: Rs. 56,100

  • With 2.0 factor: Rs. 1,12,200

  • With 2.25 factor: Rs. 1,26,225

  • With 2.5 factor: Rs. 1,40,250

7. Estimated pay for Level 11 civil servants

  • Current basic: Rs. 67,700

  • With 2.0 factor: Rs. 1,35,400

  • With 2.25 factor: Rs. 1,52,325

  • With 2.5 factor: Rs. 1,69,250

8. Estimated pay for Level 12 civil servants

  • Current basic: Rs. 78,800

  • With 2.0 factor: Rs. 1,57,600

  • With 2.25 factor: Rs. 1,73,300

  • With 2.5 factor: Rs. 1,97,000

9. Estimated Pay for Level 13 civil servants

  • Current basic: Rs. 1,18,500

  • With 2.0 factor: Rs. 2,37,000

  • With 2.25 factor: Rs. 2,66,625

  • With 2.5 factor: Rs. 2,96,250

10. Estimated pay for Level 14 civil servants

  • Current basic: Rs. 1,44,200

  • With 2.0 factor: Rs. 2,88,400

  • With 2.25 factor: Rs. 3,24,450

  • With 2.5 factor: Rs. 3,60,500

11. Estimated pay for Level 15 civil servants

  • Current basic: Rs. 1,82,200

  • With 2.0 factor: Rs. 3,64,400

  • With 2.25 factor: Rs. 4,09,950

  • With 2.5 factor: Rs. 4,55,500

12. Estimated pay for Level 16 civil servants

  • Current basic: Rs. 2,05,400

  • With 2.0 factor: Rs. 4,10,800

  • With 2.25 factor: Rs. 4,62,150

  • With 2.5 factor: Rs. 5,13,500

13. Estimated pay for Level 17 civil servants

  • Current basic: Rs. 2,25,000

  • With 2.0 factor: Rs. 4,50,000

  • With 2.25 factor: Rs. 5,06,250

  • With 2.5 factor: Rs. 5,62,500

14. Estimated pay for Level 18 civil servants

  • Current basic: Rs. 2,50,000

  • With 2.0 factor: Rs. 5,00,000

  • With 2.25 factor: Rs. 5,62,500

  • With 2.5 factor: Rs. 6,25,000

8th Pay Commission salary for assistant professor

Current basic pay (7th CPC)

Speculated fitment factor

Projected basic pay (8th CPC)

Rs. 57,700

2.57 (As per 7th CPC)

Rs. 1,48,289

Rs. 57,700

2.72

Rs. 1,56,944

Rs. 57,700

3

Rs. 1,73,100

 

8th Pay commission salary for contractual employees (expected)

(Contractual workers may see a proportional increase if govt revises minimum wages.)

Skill level

Expected monthly pay (Rs.)

Unskilled worker

25,000 - 40,000

Semi-skilled worker

40,000 - 60,000

Skilled worker

60,000 - 90,000

Highly skilled worker

90,000 - 1,50,000


8th Pay Commission salary for pensioners (expected)

(Pension is usually 50% of last drawn basic pay, adjusted with fitment factor.)

Last rank (pre-retirement)

Expected monthly pension (Rs.)

Lower grade (Group C/D)

30,000 - 60,000

Middle grade (Group B)

60,000 - 1,00,000

Senior grade (Group A)

1,00,000 - 1,80,000

High rank (IAS/IPS/Defence)

1,80,000 - 3,00,000+

 

8th Pay Commission salary for IAS officers (expected)

Rank

Current 7th CPC Pay (Rs.)

Expected 8th CPC Pay (Rs.)

Junior scale (SDM)

56,100 - 1,77,500

1,68,300 - 5,32,500

Senior scale (DM)

67,700 - 2,08,700

2,03,100 - 6,26,100

Joint Secretary

1,18,500 - 2,14,100

3,55,500 - 6,42,300

Additional Secretary

1,31,100 - 2,16,600

3,93,300 - 6,49,800

Secretary (Top)

2,25,000 (Fixed)

6,75,000 (Fixed)



8th Pay Commission salary for army personnel (expected)

Rank

Current 7th CPC Pay (Rs.)

Expected 8th CPC Pay (Rs.)

Sepoy (Level 3)

21,700 - 69,100

65,100 - 2,07,300

Havaldar (Level 5)

29,200 - 92,300

87,600 - 2,76,900

Lieutenant (Level 10)

56,100 - 1,77,500

1,68,300 - 5,32,500

Major (Level 11)

69,400 - 2,07,200

2,08,200 - 6,21,600

Colonel (Level 13)

1,30,600 - 2,15,900

3,91,800 - 6,47,700

Brigadier (Level 14)

1,39,600 - 2,17,600

4,18,800 - 6,52,800


8th Pay Commission salary for bank employees (expected)

(Bank employees follow industry-wise wage settlements, but a hypothetical estimate is given.)

Designation

Current basic pay (Rs.)

Expected 8th CPC basic pay (Rs.)

Clerk

20,000 - 45,000

60,000 - 1,35,000

Probationary officer

36,000 - 63,000

1,08,000 - 1,89,000

Assistant manager

48,000 - 78,000

1,44,000 - 2,34,000

Manager

63,000 - 1,02,000

1,89,000 - 3,06,000

Senior manager

78,000 - 1,30,000

2,34,000 - 3,90,000

 

How was the salary decided in the 7th Pay Commission?

The 7th Pay Commission used a methodical approach to determine salary structures. Under the 6th Pay Commission, the minimum salary was Rs. 7,000 per month. The 7th Pay Commission increased this to Rs. 18,000 monthly.

This revision reflected a fitment factor of 2.57 times the previous basic pay. The increase resulted in an overall 14.2% salary hike for central government employees. The commission also introduced performance-related pay and rationalised allowances.

The implementation of the 7th Pay Commission recommendations benefited approximately 4.8 million central government employees and 5.5 million pensioners. Need funds for home renovation or other expenses? Check your eligibility for a top-up loan of up to Rs. 1 crore from Bajaj Finserv by entering your mobile number and OTP. You may already qualify for this additional financial support.

What is the projected pay under 8th Pay Commission?

Based on current projections, the 8th pay commission is expected to significantly increase the minimum basic pay. Experts predict a rise from the current Rs. 18,000 to between Rs. 41,000 and Rs. 51,480, depending on the final fitment factor approved.

This substantial increase will provide central government employees with much-needed financial relief. The higher salaries will help employees cope with inflation and improve their quality of life. Additionally, the increased spending capacity will contribute to economic growth through higher consumption.

Conclusion: Making the most of the 8th Pay Commission benefits

The 8th pay commission represents a significant opportunity for central government employees to improve their financial position. With projected salary increases of 25-30%, employees can look forward to enhanced purchasing power and better living standards.

This is an ideal time for government employees to consider investing in assets like real estate. A Bajaj Housing Finance Home Loan offers numerous benefits that align perfectly with the upcoming salary revisions:

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With the expected salary increase from the 8th Pay Commission, your dream home is now within reach. Check your eligibility for a Bajaj Housing Finance Home Loan today by providing your mobile number and OTP. You may already qualify for an attractive home loan offer that can be enhanced further with your upcoming salary revision.

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Frequently asked questions

What is the fitment factor?

The fitment factor is a multiplier used to revise the basic salary of central government employees whenever a new pay commission is rolled out. It ensures uniformity in pay hikes across levels. Simply put: New Basic Pay = Old Basic Pay × Fitment Factor.

What was the fitment factor in the 7th Pay Commission?

In the 7th Pay Commission, the fitment factor was set at 2.57. This meant that an employee drawing a basic salary of Rs. 10,000 under the 6th Pay Commission would have seen it revised to Rs. 25,700 (10,000 × 2.57).

What does 2.86 fitment factor mean?

If the 8th Pay Commission adopts a fitment factor of 2.86, it means employees’ basic salary will be multiplied by 2.86. For example, if the current pay is Rs. 20,000, it would be revised to Rs. 57,200 (20,000 × 2.86).

What is the 8th Pay Commission salary?

The 8th Pay Commission is expected to raise salaries significantly from 1 January 2026. For Level 2 employees, estimates suggest a rise of nearly 40% with a fitment factor of 1.92. In such cases, gross pay could increase to about Rs. 70,506 per month.

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How much pension will increase after 8th Pay Commission?

With the fitment factor projected at around 2.86, the minimum pension could see a rise from Rs. 9,000 to nearly Rs. 25,740. As with salaries, pensions will also be revised proportionally, ensuring retirees benefit equally from the new structure.

What is DA after 8th Pay Commission?

The Dearness Allowance (DA) is expected to be merged into the new basic pay. As of January 2025, DA stood at around 55%, revised twice a year. With the 8th Pay Commission, DA will reset after merger, and future increments will continue based on inflation.

Is there any hope for 8th Pay Commission?

Yes, the 8th Pay Commission was officially approved on 16 January 2025. However, the Commission is yet to be formally set up with a chairman and members. If processes are completed on time, implementation from 1 January 2026 is possible, though some delays remain a concern.

What is the DA for January 2025?

From 1 January 2025, the government raised DA by 2%, moving it from 53% to 55%. This was announced in March 2025 and marked the lowest increase in over six years.

What will happen when DA reaches 50?

Once the Dearness Allowance touches 50%, it automatically merges with the basic salary. After merging, DA is reset to zero and begins accumulating again with future inflation-based revisions.

Is fitment factor decided for 8th Pay Commission?

The exact fitment factor for the 8th Pay Commission has not yet been finalised. Current discussions suggest it could be anywhere between 1.92 and 2.86. This number is crucial, as it directly determines the size of the salary and pension hikes.

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