The 8th Pay Commission is set to bring groundbreaking reforms for central government employees and pensioners. Beyond the usual salary hikes, a major structural change in pay levels is being proposed—merging six existing pay levels into just three. If implemented, this could lead to significant salary increases and faster career growth for employees.

Here’s everything you need to know about the proposed Pay Level Merger and its potential impact.

Key Highlights of the 8th Pay Commission

✅ Cabinet Approval Granted: The 8th Pay Commission was approved on January 16, 2025, with recommendations expected to take effect from January 1, 2026.

✅ Who Benefits? Over 50 lakh central government employees and 65 lakh pensioners will be directly impacted.

✅ Expected Salary Hike: The fitment factor (used to calculate basic pay) could be 1.92 or higher, potentially raising the minimum basic salary from ₹18,000 to ₹34,560 for Level-1 employees.

✅ Pay Level Merger Proposal: A game-changing suggestion has been made to merge six pay levels into three, simplifying the pay structure and boosting salaries.

What is the Pay Level Merger Proposal?

The proposal suggests combining the first six pay levels into three broader categories:

  • New Level A: Merge Level-1 & Level-2

  • New Level B: Merge Level-3 & Level-4

  • New Level C: Merge Level-5 & Level-6

This restructuring aims to:
✔ Increase basic salaries for lower-level employees
✔ Speed up promotions by reducing hierarchical steps
✔ Reduce pay anomalies and simplify administration

How Will Employees Benefit?

1. Big Jump in Basic Salary

  • If Level-1 (₹18,000) and Level-2 (₹19,900) merge, the new starting salary could be ₹19,900 or higher.

  • Similarly, merging Level-3 (₹21,700) and Level-4 (₹25,500) could push the new base to ₹25,500+.

  • Level-5 (₹29,200) and Level-6 (₹35,400) employees may also see a direct salary boost.

2. Faster Promotions & Career Growth

  • Fewer pay levels mean quicker promotions.

  • Employees will skip intermediate steps, moving to higher pay scales faster.

  • More responsibilities and higher positions in a shorter time.

3. Reduced Pay Discrepancies

  • Eliminates minor gaps between close pay levels.

  • Creates a more logical salary structure.

Who Gains the Most?

  • Level-1, Level-3, and Level-5 employees will see immediate salary hikes.

  • Level-2, Level-4, and Level-6 employees will benefit from better career progression.

Challenges & Next Steps

While the proposal is promising, some hurdles remain:

  • Financial burden on the government due to higher salaries.

  • Seniority rules need clarity after merger.

  • Role adjustments for employees in merged levels.

The 8th Pay Commission will finalize recommendations after reviewing these factors. An official announcement is expected soon.

Final Thoughts

The 8th Pay Commission could bring the biggest salary and structural reforms in years. If the Pay Level Merger is approved, it will be a major win for government employees, ensuring higher pay, faster growth, and a simplified system.

Stay tuned for official updates!