8th Pay Commission: Big news has come for more than 1 crore employees and pensioners of the Central Government. The Terms of Reference (ToR) of the 8th Pay Commission has been approved in the Union Cabinet meeting chaired by Prime Minister Narendra Modi. Now the Commission will submit its recommendations to the government within 18 months from the date of its formation.
Actually, the 8th Pay Commission was announced in January itself, but due to the delay in finalizing its rules, there was confusion among the employees about when it would be implemented. Now the government has given formal approval, which has brought relief to all the employees. Know here how much salary can be increased in the 8th Pay Commission.
What is Pay Commission?
The Central Pay Commission is constituted periodically to review the salary structure, allowances, and service conditions of central government employees and pensioners and recommend necessary changes. A new Pay Commission is typically established every 10 years.
How much will the salary increase?
The most important basis for salary increases is the Fitment Factor. This is a multiplier used to multiply the old basic salary to determine the new basic salary. Other allowances are also determined based on the basic salary. In the 7th Pay Commission, this fitment factor was kept at 2.57, due to which the minimum basic salary of the employees increased from Rs 6,000 to Rs 18,000.
Now, if a fitment factor of 2.47 is applied in the 8th Pay Commission, a basic salary of Rs 18,000 could increase to approximately Rs 44,460. If the fitment factor is set at 1.83, the basic salary could reach approximately Rs 32,940, and if it is set at 1.86, the basic salary could reach approximately Rs 33,480.
Understand with an example
Suppose your current basic salary is Rs 18,000.
If the fitment factor is 1.83, the new salary will be Rs 32,940.
If the fitment factor is 2.47, the new salary can increase to Rs 44,280.
How will the gross salary be calculated?
Gross salary includes basic pay along with dearness allowance (DA) and house rent allowance (HRA).
HRA 30% of basic for metro cities
20% for Tier-2 cities
For Tier-3 cities it is 10%.
At present, if DA is assumed to be 0% and basic is Rs 44,460, then the gross salary of an employee living in metro cities will be.
44,460 + 13,338 (HRA) = Rs 57,798.
