8th Pay Commission Allowance Hike: Check Which Allowances Will Increase and By How Much

Before knowing how the government will increase the salary of employees under the 8th Pay Commission, it is important to understand how the salary of government employees is structured in India. This becomes even more important when a new pay scale is going to be implemented.

Experts say that the salary of any government employee is made up of many parts. These include Basic Pay, Dearness Allowance (DA), House Rent Allowance (HRA), Travel Allowance (TA), and other allowances. Also, the pension after retirement is an important part of the salary structure.

Basic Pay

This is the main and fixed part of a government employee’s salary. It is decided based on the employee’s promotion and seniority. The rest of the allowances are calculated on the basis of basic pay. Earlier, basic pay made up about 65% of the total salary, but now it is around 50%.

Dearness Allowance (DA)

Dearness Allowance is given to help employees deal with inflation. It is a percentage of the basic pay and is calculated using the Consumer Price Index (CPI). DA is revised two times a year — in January and July.
For example, if an employee’s basic pay is ₹18,000 per month and the DA rate is 50%, then the DA will be ₹9,000 per month. So, the total salary will be ₹27,000.

House Rent Allowance (HRA)

HRA is given to employees to help them pay rent for living in a rented house. It can be 27%, 18%, or 9% of the basic pay. The rate depends on the city where the employee is posted — in X, Y, or Z category cities. Metro cities have higher HRA rates.

Travel Allowance (TA)

This allowance covers travel or commuting expenses. It is a fixed amount and depends on the employee’s salary level and the category of the city. In some cases, DA is also added to the TA, depending on inflation.

How will the increase be calculated?

RK Verma, General Secretary of the Joint Employees Council, says that if an employee’s basic pay is ₹20,000, and the DA is 55%, then the DA will be ₹11,000 per month. In the 8th Pay Commission, the fitment factor will be increased first. This will directly raise the salary.
If the fitment factor increases from 2.57 to 3, then the new salary will be about ₹29,000. This means the employee’s total salary can go from ₹31,000 to ₹60,000 per month, including the new basic pay and DA.