8th Pay Commission: Will DA Rise to 60%? Know Salary Impact

8th Pay Commission update: Central employees are eagerly awaiting the recommendations from the 8th Pay Commission. It typically takes about 18 to 20 months for these recommendations to be put into action, but central employees have already begun to calculate their salaries and dearness allowance.

Right now, it’s unclear if the 8th Pay Commission will use a fitment factor-based formula like the 7th Pay Commission did. If they follow the same approach, the dearness allowance (DA) rate might once again serve as the foundation for determining the fitment factor. Let’s take a look at the pattern so far.

What’s the pattern?

The 7th Pay Commission set the minimum wage at Rs 18,000, which was 2.57 times higher than the Rs 7,000 minimum wage established by the 6th Pay Commission on January 1, 2006 (this included Pay Band 1 and Grade Pay of Rs 1,800). Out of this 2.57 fitment factor, around 2.25% was specifically allocated for neutralizing the DA (Dearness Allowance). The rest was related to actual pay hikes and structural adjustments. If we apply the same reasoning to the 8th Pay Commission, the new fitment factor might be based on the anticipated 60% DA on January 1, 2026.

Current projections suggest that the dearness allowance for central employees could hit 60 percent for the January-June half-year. While the government hasn’t made a final decision on this, it seems likely based on the 2025 AICPI-IW data. It’s still too soon to determine what the fitment factor will be or what the minimum wage will be set at. However, it’s clear that if the previous method of using DA as a base continues, a 60 percent DA could significantly influence the salary calculations in the 8th Pay Commission.

The Pay Commission has launched a website for central government employees and pensioners. It has also sought suggestions from employees, pensioners, and other stakeholders. However, it will take time for recommendations regarding salary and pension revisions to be received. The government announced the formation of the Pay Commission in January last year. The Pay Commission’s team was formed in November. It is also important to note that the term of the 7th Pay Commission ended on December 31, 2025.

Under the 7th Pay Commission, the new basic salary is determined by applying the fitment factor approved under the 7th Pay Commission to the existing basic pay. The monthly difference between the old and new salaries is then calculated and multiplied by the number of months of delay. Arrears typically include the difference between the basic pay and the dearness allowance (DA) based on the revised pay.