8th Pay Commission Updates Expected Salary Increase, Fitment Factor, and Pension Revision
A total of 50.14 lakh central government employees and around 69 lakh pensioners are eagerly awaiting the recommendations of the 8th Central Pay Commission (CPC), wondering how much their salaries and pensions will increase and when the new pay structure will be implemented.
The 8th Pay Commission, headed by retired Justice Ranjana Desai, has been examining wage revisions, allowances, pension adjustments, retirement benefits, and service conditions. The panel is expected to submit its report with recommendations on basic pay, allowances, and pension revisions.
A key component of any Pay Commission is the fitment factor, which is a multiplier used to calculate revised basic pay and pensions when moving from one pay structure to the next.
New Basic Pay = (Current Basic Pay + Grade Pay, if any) × Fitment Factor
For context, the 7th Pay Commission applied a universal fitment factor of 2.57, which resulted in an approximate 14.3% real increase in salaries, after merging the Dearness Allowance (DA) at that time.
The fitment factor ensures a uniform salary hike for all employees and pensioners. It is finalized only after the Union Cabinet approves the Pay Commission’s recommendations.
Reports suggest that the 8th Pay Commission’s fitment factor may range from 1.86 to 2.57, though the exact figure will be officially announced later.
The Terms of Reference (ToR) for the 8th CPC were notified on October 28, 2025. The panel is expected to submit its report within 18 months, i.e., by April 2027. Once submitted, the government usually takes around six months to review and implement the recommendations. This means the revised pay structure may realistically come into effect by late 2027 or early 2028.
Minister of State for Finance Pankaj Chaudhary said, “The 8th Central Pay Commission (CPC) has already been constituted. The Terms of Reference (ToR) of the 8th CPC have been notified vide Ministry of Finance Resolution dated 03.11.2025. The date of implementation of the 8th CPC shall be decided by the government. Government will make appropriate provision of funds for implementing the accepted recommendations of 8th CPC.”
According to Ambit Capital, assuming a fitment factor between 1.83 and 2.46, the minimum basic salary for central government employees could rise from ₹18,000 to between ₹32,940 and ₹44,280 per month.
Fitment factor 1.83: ₹18,000 → ₹32,940
Fitment factor 2.46: ₹18,000 → ₹44,280
The final increase will depend on the fitment factor approved by the government. The 8th Pay Commission will benefit over 50 lakh employees and over 65 lakh pensioners. Ambit Capital also estimates a real salary increase of 14% to 54%, including Basic Pay + DA. However, the higher end (54%) is unlikely, as the government may face financial constraints. “While the government might consider a higher increase, potentially using it as a consumption stimulus, expecting a substantial 54% jump (as seen during the 6th Pay Commission) seems unlikely, since it could face significant financing challenges,” the report said.
The 8th Pay Commission will revise salaries, pensions, and allowances for central government employees and pensioners.
Fitment factor is the main determinant of the revised pay, bridging current pay with the new structure.
Employees can expect the recommendations by April 2027, with possible implementation in late 2027 or early 2028.
Salary hikes will depend on the approved fitment factor and the government’s financial feasibility.
