8th Pay Commission Salary Hike: Expected Impact And Latest Updates

The Central government has already announced the formation of the 8th Pay Commission, which will revise salaries and pensions for central government employees and pensioners. The commission’s recommendations are expected to benefit around 45 lakh employees and 68 lakh pensioners.

A key aspect of the pay commission is the fitment factor, which determines the extent of salary and pension increases. The fitment factor is applied to an employee’s existing basic pay to calculate their new basic pay under 8th Pay Commission.

Here are the key highlights of the 8th Pay Commission:

Approval & Implementation: 

• Announced on January 17, 2025. 
• Effective from January 1, 2026. 
• Commission formation and report submission to precede implementation.

Beneficiaries: Approximately 49 lakh employees and 65 lakh pensioners.

Fitment Factor & Salary Hike: 

• Expected fitment factor: 2.6 to 2.85. 
• Anticipated salary increase: 25-30%. 
• Example: Basic pay of Rs 20,000 may rise to Rs 46,600-Rs 57,200.

Pension Revisions: 

• Minimum pension could increase from Rs 9,000 to Rs 22,500-Rs 25,200. 
• Proportional hikes aligned with salary revisions.

Historical Context: 

• The 7th Pay Commission implemented in 2016 with a 2.57 fitment factor. 
• The 6th Pay Commission in 2006 had a 1.86 fitment factor.
• The 5th Pay Commission was declared in April 1994 and established in June 1994.

Impact on NPS and CGHS Contributions (Estimated)

National Pension System (NPS) Contributions: Government employees contribute 10% of their basic pay and dearness allowance (DA) to NPS, while the government contributes 14%. These contributions will increase following salary revisions. Central Government Health Scheme (CGHS): Charges under CGHS will be updated based on revised salary levels.