8th Pay Commission: Expected Salary Hike and Latest Updates

The 8th Pay Commission is the much-awaited salary revision mechanism for central government employees in India. Expected to be implemented from January 1, 2026, it aims to revise salaries, allowances, and pensions based on Inflation and living costs. In this detailed article, we will cover the expected pay hike, fitment Factor, latest news, expert predictions, DA increments, arrears, and other key benefits regarding the 8th Pay Commission.

What is the 8th Pay Commission?

The Pay Commission is constituted by the Government of India every 10 years to revise the pay structure of central government employees. The last 7th pay commission was implemented in 2016, and now the 8th Pay Commission is expected to come into effect in 2026.

The key objectives of the 8th Pay Commission are:

• Revising basic salaries and grade pay of central government employees
• Adjusting dearness allowance (DA), house rent allowance (HRA), and other benefits
• Increasing pension benefits for retired employees
• Ensuring that the revised pay structure keeps up with inflation and cost of living
• Addressing demands for rationalisation of salary structures across different pay levels
• Introducing new allowances or modifications to existing ones for better financial security

Expected Fitment Factor in the 8th Pay Commission

The fitment factor is a crucial multiplier that determines how much the basic salary will increase.

Current vs. Expected Fitment Factor

• Minimum fitment factor expected: 2.86x

• Maximum fitment factor being discussed: 3.00x

If 3.00x is approved, salaries will see an even bigger hike than estimated.

Example Salary Hike with 2.86x Fitment Factor

Dearness Allowance (DA) Hike and Arrears

Dearness Allowance (DA) is another key component that increases salary along with the basic pay. The DA is expected to be revised significantly under the 8th Pay Commission due to rising inflation.

• Current DA (2024): 50%
• Expected DA post 8th Pay Commission: 60%-65%
• DA arrears from July 2025 to January 2026 likely to be provided.

Additionally, employees may receive DA arrears from the implementation period, which could result in a lump sum payout for government employees.

When Will the Government Appoint the 8th Pay Commission?

As of 2025, the government has approved the formation of the 8th Pay Commission, and its recommendations are expected to be submitted by mid-2025. The final report will be reviewed by the Union Cabinet, and the revised salaries will likely be implemented from January 1, 2026.

Key Government Updates:

• Union Cabinet approved the formation of the 8th Pay Commission.
• The report will be submitted within 18 months.
• Implementation expected from January 2026.

What is the Aykroyd Formula?

The Aykroyd Formula is used to calculate the minimum salary required for an individual based on food costs, inflation, and essential needs. This formula is a key factor in determining the revised minimum salary under the 8th Pay Commission.

How the Aykroyd Formula Works:

• It calculates the cost of a balanced diet (food, pulses, dairy, etc.).
• It considers the percentage of Income spent on food (usually around 50%).
• It adjusts for inflation and cost of living.

Example Calculation:

• 1. Minimum Food Cost per Month: ₹7,000

This represents the monthly cost for a balanced diet (food, pulses, dairy, etc.).

• 2. Food Expenses as a Percentage of Total Expenses: 50%

In this example, food expenses make up 50% of the total expenses.

3. Formula to Calculate Total Expenses:

Since food makes up 50% of the total, you can calculate the total expenses by dividing the food cost by the percentage:

4. Other Expenses

This includes housing, healthcare, education, etc., which are added to the basic total expenses.

In your example, other expenses lead to a projected minimum salary of ₹41,000 under the 8th Pay Commission.

This suggests that, after factoring in housing, healthcare, and education costs, the revised minimum salary would be ₹41,000.

Additional Pension Benefits for Pensioners:

• The pension amount for pensioners will be revised based on the new fitment factor, dearness allowance (DA) rates, and inflation adjustments.
• Experts suggest pensioners could see an increase of up to 50% in their pension once the 8th Pay Commission is implemented.

Conclusion: What to Expect from the 8th Pay Commission?

The 8th Pay Commission will bring substantial salary hikes and improved benefits for central government employees and pensioners. While the final salary structure will be based on the government’s approval, key expectations include:

• A fitment factor between 2.86x and 3.00x
• Minimum salary increase from ₹18,000 to ₹41,000
• Higher allowances and better pension benefits
• Implementation likely from January 1, 2026
• Significant DA hikes and arrears payments

Stay tuned for the latest updates on the 8th Pay Commission.