8th Pay Commission update: The government is considering continuing with the pay matrix of the 7th Pay Commission. With a new fitment factor of 1.92, the minimum basic salary could increase from ₹18,000 to ₹34,200. Read the full details here.
8th Pay Commission update: There’s some important news for government employees. According to reports from sources close to the matter, the 8th Pay Commission is unlikely to introduce a new salary calculation formula. In other words, the pay matrix used in the 7th Pay Commission will likely form the basis for the 8th as well. The only difference will be the addition of updates such as a new fitment factor and level merging.
Why is the 7th Pay Commission formula being repeated?
The pay matrix introduced by the 7th Pay Commission was designed to be so simple and easy to understand that it eliminated all the complexities of the old pay bands and grade pay system. This 18-level matrix clearly showed every employee the range of their potential basic salary. Now, the government is preparing to implement a similar structure with the 8th Pay Commission as well.
Dr. Ackroyd’s ‘magic’ formula
This entire pay structure is based on a well-known formula—the Dr. Wallace Aykroyd Formula. This formula determines the minimum wage an average Indian employee should receive to meet their basic needs. The minimum wage is calculated using this formula, and the entire pay scale is built upon it.
How much will the salary increase? (The role of the Fitment Factor)
Now, let’s address the most important question—how much will the salary increase?
- Current minimum basic pay: ₹18,000
- New fitment factor (expected): 1.92
- New basic pay = ₹18,000 × 1.92 = ₹34,560
This means a direct jump of ₹16,560 in the basic salary alone. Adding Dearness Allowance (DA), House Rent Allowance (HRA), Travel Allowance (TA), and other benefits will further increase the take-home salary.
Pay Level Merging – Easier Promotions, Salary Boost
There are also reports that some pay levels may be merged this time. For example:
- Level 1+2 = New Level A
- Level 3+4 = New Level B
- Level 5+6 = New Level C
If this happens, the salaries of employees at lower levels will increase immediately, and promotions will be more frequent.
Impact on HRA and TA
With the salary increase, the HRA and TA will automatically be recalculated based on the new basic salary. The HRA slab will vary according to the city category (X, Y, Z), and the TA allowance may also increase.
Considering an increase in insurance coverage
Currently, the insurance coverage provided in case of death while on duty is very low. According to sources, the 8th Pay Commission is considering increasing this coverage to ensure adequate financial security for the family.
When will the benefits be available?
The 8th Pay Commission has not yet been officially constituted, but it is expected to be implemented from 2026. If the government issues a notification by the end of 2025, employees could receive both the revised salary and arrears from January 1, 2026.
Conclusion
This move by the government can be considered a “balanced” approach—it avoids the hassle of creating a new pay scale and provides a clear salary increase for employees. If the proposed fitment factor of 1.92 is implemented, the minimum salary will rise above ₹34,000. Ultimately, the ball is in the government’s court, and millions of employees are now eagerly awaiting the official announcement.
