8th Pay Commission: The biggest question in the minds of employees is how much their salary will increase and what will be the role of ‘fitment factor’ in it? This time there are also discussions that while deciding the fitment factor, the current dearness allowance (DA) will also be taken into account, possibly by merging it in the basic salary.
8th Pay Commission: Lakhs of central government employees and pensioners are eagerly waiting for the 8th Pay Commission. The government has also started its preparation, the formation of the panel is under consideration. The biggest question in the minds of employees is how much their salary will increase and what will be the role of ‘fitment factor’ in it? This time there are also discussions that while deciding the fitment factor, the current dearness allowance (DA) will also be taken into account, possibly by merging it in the basic salary. Let us understand what is fitment factor and what is the real mathematics of salary increase.
What is Fitment Factor?
Fitment factor is a multiplier. When the new pay commission is implemented, the new basic salary is decided by multiplying the existing basic salary by this fitment factor. Its purpose is to ensure that all employees get salary hike on an equal basis and it includes inflation of the previous period (which was received in the form of DA) and a real increase. For example, understand that the fitment factor in the 7th Pay Commission was 2.57. This meant that the new basic pay of the 7th Pay Commission was decided by multiplying the basic pay (pay in pay band + grade pay) under the 6th Pay Commission by 2.57.
What is the matter of DA merger? (The Dearness Allowance Merger)
Usually, whenever a new pay commission is implemented, the total dearness allowance (DA) being received till that time is merged into the existing basic salary. After this, the first basic salary of the new pay structure is decided on the basis of this ‘revised basic salary’ or by directly applying the fitment factor on the old basic and the DA counter starts again from zero.
What happened in the 7th Pay Commission? When the 7th Pay Commission was implemented on 1 January 2016, the DA had become 125% by then. This 125% DA was subsumed in the old basic pay, and then the fitment factor (2.57) was used to decide the new basic pay.
What is expected in the 8th Pay Commission? (Expectations from 8th Pay Commission)
DA Merger: There is every possibility that whatever DA (approximately above 60%) will be there till 1 January 2026 (when the 8th Pay Commission is expected to be implemented) will be merged in the basic salary.
Fitment Factor: Employee unions are demanding a much higher fitment factor (eg. 3.68) than the 7th Pay Commission’s 2.57. How much the government will keep it will depend on the Commission’s recommendations, but it is expected that it will be more than 2.57 (possibly 2.8 to 3.0 or more).
How can your new salary be calculated? (The right way)
Formulas like “Basic + DA = Fitment Factor” running on social media are misleading. The right way is:
Determining new basic pay
New basic pay = Existing (7th CPC) basic pay * 8th CPC fitment factor
This fitment factor will include the merger of existing DA and the actual increase.
Example
Suppose your current basic pay (Level 1) = ₹ 18,000.
Suppose the fitment factor of 8th Pay Commission is fixed at 3.0 (this is just an example, the actual factor will be different).
Then your new basic pay will be: ₹18,000 * 3.0 = ₹54,000 (this is for example, the actual figure may be different).
(Note: This will be the new basic pay, on which allowances like DA, HRA etc. will be applicable. This ₹54,000 will include both DA till 1 January 2026 and the actual increase.)
Avoiding Incorrect Calculations
Many types of calculations are going on in the media. Basic + DA = Sub Total, then 18% hike, then new salary/old basic = Fitment Factor 1.90), it does not show the correct way to calculate the fitment factor. The fitment factor is first decided (based on recommendations), and then applied to the old basic, and not calculated from any estimated salary. A factor as low as 1.90 does not match the previous pattern.
