The Central Government had given the green signal to the formation of the Eighth Pay Commission in January 2025, and now the 10-month wait of the employees is over! Last week the government has approved all the conditions of the Eighth Pay Commission. The good news is that the commission has been constituted, and its official notification has also been issued.

This new pay commission is expected to lead to a significant increase in the salaries of government employees and pensioners. But, we will have to wait a little longer for the salary increase. Come, let us know about this commission in detail.

How many members are included in the commission?

According to the latest information, three members have been included in the Eighth Pay Commission. According to the notification of the Department of Expenditure of the Finance Ministry, Justice Ranjana Prakash Desai has been appointed as the chairperson of the commission. Additionally, Professor Pulak Ghosh of IIM Bengaluru will be a part-time member, while Pankaj Jain, current secretary of the Ministry of Petroleum and Natural Gas, will take up the role of member-secretary.

When will the Eighth Pay Commission be implemented?

The central government implements a new pay commission every 10 years. The last Seventh Pay Commission was constituted in 2014, whose recommendations came into effect from January 2016. This time the tenure of the Seventh Pay Commission is ending in December 2025. In such a situation, the Eighth Pay Commission is likely to be implemented from January 1, 2026. However, the new commission may take 2-3 years to be fully setup and implement the recommendations. That means, it may extend till 2028 also.

Who will take advantage?

About 50 lakh central employees and 65 lakh pensioners will benefit from the implementation of the Eighth Pay Commission. Overall, increase in salary and pension of about 1 crore people is certain. This commission will bring changes not only in salary but also in pension and other allowances.

On which allowances will the sword hang?

The Eighth Pay Commission will review the existing allowances. If some allowances are found non-essential, they can be eliminated or merged with other allowances. This may include travel allowance, special duty allowance, small regional allowances, and old departmental allowances. Additionally, the bonus scheme will also be monitored.

What will be the impact on pension and gratuity?

Pension and gratuity rules will also be reviewed under the Eighth Pay Commission. The death-cum-retirement gratuity of employees covered under the National Pension System (NPS) will be examined. Apart from this, new rules can also be made for employees and pensioners with the old pension system.

Recommendations in 18 months, interim report also possible

The commission will have to submit its recommendations to the government within 18 months. But if any immediate recommendation is needed, the Commission can also send an interim report. This means that efforts may be made to implement necessary changes soon.

What is the fitment factor and how will the salary increase?

Fitment factor is a multiplier through which the new salary of the employees is decided. It calculates the revised salary by multiplying the basic salary. For example, if the basic salary of an employee is Rs 10,000 and the fitment factor is 2.57, then the new salary will be Rs 25,700. Overall, the salary may increase by 30-34%. If the basic salary of a level-1 employee is Rs 18,000, then it can increase up to Rs 51,480.

What will happen to DA?

When the new pay commission is implemented, DA (dearness allowance) will start from zero, because inflation is already taken into account in the new basic salary. However, removal of DA may have some impact on the total salary.

How long will it take to implement?

If we look at the past pattern, the Seventh Pay Commission was constituted in 2014, and its recommendations were implemented in 2016. Similarly, the Eighth Pay Commission may come into effect from 2026, but the entire process may take till 2028. Employees will get 17-18 months of arrears in lump sum or in installments.