8th Pay Commission: How Government Employees' New Salary Structure Could Change from January 2028

Introduction: A Major Step Toward the 8th Pay Commission Implementation
The Central Government has officially approved the Terms of Reference (ToR) for the 8th Pay Commission, setting the stage for a significant revision in the salaries and pensions of central government employees. Along with this, former Supreme Court judge Justice Ranjan Desai has been appointed as the chairperson of the commission. The panel has been given 18 months to submit its report, after which it will be reviewed and approved by the Union Cabinet.

This development marks the beginning of a crucial process that could impact millions of central government employees and pensioners across India. While the final recommendations will take time, discussions have already begun around how the new salary structure will be calculated and what kind of hikes can be expected once the 8th Pay Commission comes into effect.

Understanding the Fitment Factor: The Core of Salary Revision

One of the most important elements of any Pay Commission is the fitment factor — a multiplier used to calculate the new basic pay based on the existing salary structure. In simple terms, this factor determines how much your base pay will increase under the new system.

For instance, in the 7th Pay Commission, the fitment factor was set at 2.57. This means if an employee’s basic pay was ₹35,000, the revised basic pay became ₹35,000 × 2.57 = ₹89,950.

For the 8th Pay Commission, experts expect the fitment factor to be between 2.0 and 2.5, depending on inflation rates, cost of living, and government fiscal conditions.

How Will Salaries Be Calculated?

The new salary will be determined by multiplying the current basic pay with the proposed fitment factor.

For example:

• If your current basic pay is ₹35,000 and the fitment factor is 2.11, your new basic pay will be ₹73,850 (35,000 × 2.11).

• After this revision, HRA (House Rent Allowance) and DA (Dearness Allowance) are also recalculated as a percentage of the new basic pay, which further increases the overall monthly salary.

Will Dearness Allowance (DA) Affect the Fitment Factor?

Although the DA doesn’t directly determine the fitment factor, it does influence the calculations. For example, if DA currently stands at 58% and is expected to rise by another 12% in the coming two years, it could reach 70% by the time the new pay structure is implemented.

Additionally, the government considers factors such as family size, inflation, and pay level structure before finalizing the factor. In the last commission, calculations were based on three family units; this time, it may rise to four units, which could result in an additional 13% increase in the overall pay matrix.

Will Salaries Double Under the 8th Pay Commission?

Many employees are hopeful that their salaries will double, but that’s unlikely. While the basic pay and allowances will increase significantly, the overall hike is expected to be around 20–25%, not 100%.

It’s also important to note that when a new pay commission is implemented, Dearness Allowance (DA) resets to 0%, and the new increment cycle begins afresh.

Uniform Fitment Factor or Pay-Level Based?

In the 7th Pay Commission, a uniform fitment factor of 2.57 was applied to all pay levels to maintain simplicity. The government may follow the same approach again, though there is speculation that lower pay levels might get a slightly higher factor to provide relief to employees in the lower income brackets.

Currently, there are 18 pay levels in the central government salary structure, and the same framework may continue under the new system with revised multipliers.

Illustration: Impact of a 2.0 Fitment Factor

Let’s take an example. If an employee’s current basic pay is ₹50,000 and the new fitment factor is set at 2.0, the revised basic pay will become:
₹50,000 × 2.0 = ₹1,00,000.
When HRA, DA, and other allowances are added, the total monthly salary will increase further, providing a substantial boost to take-home income.

Timeline and Implementation Date

With the commission already constituted and its ToR approved, the panel is expected to submit its report by early 2027. Once the recommendations are examined and approved by the Union Cabinet, the 8th Pay Commission is likely to be implemented from January 1, 2028.

This timeline aligns with the government’s typical five-to-seven-year revision cycle, following the implementation of the 7th Pay Commission in 2016.

Conclusion: What Employees Can Expect

The 8th Pay Commission is set to play a pivotal role in shaping the financial future of India’s central government workforce. While the final numbers will depend on economic conditions, the commission’s recommendations are expected to bring a moderate yet meaningful salary boost and greater transparency in pay structures.

Employees should expect an overall increase of around 20–25%, along with adjustments in allowances and pension benefits, ensuring that their income keeps pace with the rising cost of living.