8th Pay Commission: The most discussed topic among government employees at present is the 8th Pay Commission. The government has released its Terms of Reference (ToR). This is important news for more than 1 crore employees and pensioners waiting for the 8th Pay Commission. This commission will benefit the salaries of approximately 50 lakh central employees and 69 lakh pensioners. Employees are now curious to know how much their salaries will increase and what the fitment factor could be. Now the biggest question is what will happen in the 8th Pay Commission.

In simple words, fitment factor is a multiplier that is used to convert the old basic salary into the new salary. It is noteworthy that during the Seventh Pay Commission it was fixed at 2.57. The new basic pay was determined by multiplying the old basic pay by 2.57.

Fitment factor is the number by which the old basic pay is multiplied to get the new basic pay. For example, if the fitment factor in the Seventh Pay Commission was 2.57, then if one’s basic pay was ₹10,000, the new basic pay would be ₹25,700.

How is basic pay determined?

Formula of Fitment Factor:

New Basic Pay = Current Basic Pay × Fitment Factor

If your salary is ₹25,500 and fitment factor is 2.86, then the minimum salary can increase from ₹25,500 to ₹72,930.

First, inflation data from the last wage revision is collected. It includes CPI (Consumer Price Index) or AICPI index, DA percentage (Dearness Allowance) and salary hike. Next, it is assessed whether the minimum wage is enough to comfortably support an average employee’s family. Based on this, the target minimum salary is determined, which means an amount sufficient to meet the basic needs of the family.

Now the formula comes: Fitment Factor = Target Minimum Salary ÷ Current Minimum Salary. This means that the higher the target minimum wage, the higher will be the fitment factor and corresponding increment.

According to media reports, the fitment factor can be between 1.83 to 2.46. If this happens, the minimum basic pay of Rs 18,000 will increase as follows: