8th Pay Commission: What is Fitment Factor and How much will the Salary Increase?

As part of the process to form the 8th Central Pay Commission (CPC) to revise pay structures for nearly 50 lakh central government employees and 62 lakh pensioners, the central government has started consulting with key stakeholders, including the Ministry of Defence, the Ministry of Home Affairs, the Department of Personnel and Training, and state governments. The main focus of this whole exercise is on a crucial aspect of salary calculation: the fitment factor.

According to media reports, the basic pay increase of a government employee under a new pay commission system is primarily determined by the fitment factor.

What is a Fitment Factor?

A numerical multiplier called the fitment factor is used to determine the updated pay of the central government employees. The Pay Commission determines the new basic salary by applying it to the current basic pay. A greater salary corresponds to a larger fitment factor.

How much will Salary be increased in 8th Pay Commission?

For instance, the fitment factor under the 7th salary Commission was 2.57, which meant that the new structure was reached by increasing the basic salary by 2.57 times. According to preliminary estimates given in publications, the pay increase might be between 30% and 34% if the 8th Pay Commission proposes a larger amount. The new multiplier has not yet been officially announced, but any upward increase will have a big effect on take-home income and pension calculations.

Additional benefits, such as dearness allowance (DA), house rent allowance (HRA), and travel allowance, are also increased by a greater base pay. This indicates that a greater fitment factor will not only raise the base pay of the employees but also the total earnings.

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8th Pay Commission Process Underway

According to a PTI report, the establishment of the 8th Pay Commission was authorized by the Union Cabinet in the month of January 2025 to update the compensation of over 50 lakh central government workers and the benefits of approximately 65 lakh retirees.

Although there hasn't been a formal announcement yet, Minister of State for Finance Pankaj Chaudhary stated in a written response to the Lok Sabha that "inputs have been sought from major stakeholders, including the Ministry of Defense, Ministry of Home Affairs, Department of Personnel & Training, and from states." He further stated that following the official notification of the commission, the chairperson and members of the 8th CPC will be nominated.

When will the 8th Pay Commission be Implemented?

In response to a question on when the updated pay scales will be put into effect, Chaudhary explained: "Once the 8th CPC's recommendations are made and approved by the government, the implementation would begin."

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