January 2027 Salary Update: How Much Will Employees Actually Receive? Check the Calculation

One of the most talked about topics these days is, when will the 8th Pay Commission be implemented? When will DA, salary increase? Amidst all these questions, a big update has come to the fore for government employees. The government has issued a formal notification regarding the 8th Pay Commission, which has raised the hopes of lakhs of employees and pensioners. If it is implemented in 2027, which will be effective from January 2026, then the salary hike due can reach lakhs.

The central government issued a notification on November 3, 2025, through a government proposal, to establish the 8th Central Pay Commission. Minister of State for Finance Pankaj Choudhary gave this information in a written reply in the Rajya Sabha. This notification has been published in the Gazette, which officially establishes the commission. This commission has been formed almost 10 years after the formation of the 7th Pay Commission. It will directly impact lakhs of central government employees, defense personnel, All India Service officers and pensioners.

When will the new salary be effective?

The government has indicated that the Commission’s recommendations will be effective from January 1, 2026. However, the actual implementation may start in 2027. If this happens, employees may get arrears of salary for 12 to 15 months and in case of delay, 15 to 20 months. This means that the entire difference between the old and new salary from 2026 till the date of implementation will be paid in one go.

Fitment factor and possible increase

It is believed that the fitment factor in the 8th Pay Commission may be around 2.57, as it was in the 7th Pay Commission. Based on this, a salary increase of 30 to 50 percent is possible. Level-1 employees are estimated to get an arrears of approximately Rs 3.60 lakh to Rs 5.65 lakh. In the case of Level-2 employees, the amount may go up to Rs 3.98 lakh to Rs 6.25 lakh. Level-4 employees are expected to get an arrears of Rs 5.10 lakh to Rs 8.01 lakh. These estimates are based on probable calculations and the final amount will depend on the recommendations of the Commission and the decision of the government.

How will the arrears be fully calculated?

The basis for calculating arrears is quite simple. First, the difference between the old basic pay and the new basic pay is calculated. Then, this difference is multiplied by the number of months till implementation. Moreover, the effect of Dearness Allowance (DA) is also added to the arrears. Since DA is based on the basic pay, the amount of DA will also increase with the increase in the new basic pay. Thus, the arrears will include not only the difference in the basic pay but also the additional DA benefit.