8th Pay Commission: The likelihood of the 8th Pay Commission being implemented in 2028 is increasing. If its recommendations are implemented from 2026, employees could receive substantial arrears for two years. Understand the complete calculation of arrears.
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8th Pay Commission: The 7th Pay Commission’s 10-year term ends on December 31, 2025. Therefore, the focus is now on the 8th Pay Commission: when it will be implemented and how much the salary increase will be. The government has already issued its Terms of Reference (ToR). The commission, led by Justice Ranjan Desai, has begun work. However, the official implementation date has not yet been revealed. Estimates suggest that the recommendations may be implemented in early 2028 instead of January 2026.
Delayed implementation will increase arrears.
The government has notified the 8th Pay Commission and its ToR has also been approved. The Commission has been given 18 months to prepare its report. Past experience shows that the government takes 3-6 months to review and approve the report after it is submitted. Therefore, its implementation is most likely to take place in late 2027 or early 2028.
If the 8th Pay Commission recommendations are implemented with a delay and are considered backdated, effective January 1, 2026, employees could face significant arrears. This delay could also result in monetary benefits for employees.
How much could salaries increase?
Many market experts, including Ambit Capital, estimate that the 8th Pay Commission could result in a 30-34% increase in salaries and pensions for central government employees. This increase will be based on the fitment factor, the multiplier used to determine the new basic pay. Reports suggest that the new fitment factor could be between 1.83 and 2.46, with most estimates focusing on 2.28. It’s normal for DA to be merged into the basic pay before the new pay fixation.
If an employee’s current basic pay is ₹18,000, their gross salary, including DA, is approximately ₹35,000. If there is a 34% increase, the new gross salary will be approximately ₹46,900 per month, representing an increase of ₹11,900 per month.
So, how much arrears will be received?
If the 8th Pay Commission recommendations are implemented in January 2028 and are considered effective from January 2026, employees will receive 24 months’ arrears.
Monthly increase: ₹11,900
Duration: 24 months
Total arrears: ₹2.85 lakh
This means that even an employee with the lowest basic pay could receive arrears of around ₹2.8-3 lakh. This amount will be several times higher at higher pay levels.
Why are arrears important?
Every pay commission has brought significant financial benefits to employees, with arrears. Even in the 7th Pay Commission, employees received a substantial lump sum. Therefore, even though the recommendations are implemented late, backdated arrears compensate for the delay.
What will the 8th Pay Commission review?
The scope of the 8th Pay Commission is quite broad. It is not limited to basic pay increases, but will also review key policies such as HRA and other allowances, pension and dearness relief, gratuity and retirement benefits, as well as pay parity and incentive structures. The government will make a final decision on all these changes only after the Commission submits its report and a detailed evaluation is complete.
What should employees keep an eye on now?
Fitment Factor: What final fitment factor does the Commission recommend in its report? This will determine the actual calculation of the pay increase.
Implementation Date: From which date does the government implement the recommendations – immediately or retrospectively? This will change the entire calculation of arrears.
Budget allocation: The amount allocated in the Union Budget for salary revisions and arrears payments. This reflects the government’s preparedness and priorities.
DA reset: How will dearness allowance (DA) be merged or reset into the new salary structure? This directly impacts the basic pay and overall salary structure.
Till the time the recommendations of the Commission are implemented, DA and DR will continue to be given as per the existing rules.
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