8th Pay Commission: There will be a bumper increase in the salary of central employees, if HRA increases then the budget will increase.

Are you also eagerly waiting for the 8th Pay Commission? If yes, then this news will bring a smile on your face. The coming time is going to bring great happiness for crores of central government employees and pensioners. Employee unions are continuously demanding a huge increase in basic salary, pension and allowances, and now experts estimate that this could lead to a huge jump in the monthly income of employees.

Not only basic salary, there will be big benefit in HRA also

The impact of the 8th Pay Commission will not be limited to your basic salary only. Banking and finance experts believe that this will also have a direct impact on House Rent Allowance (HRA). Since HRA is directly linked to basic pay, even a small increase in the fitment factor means a big increase in the total money in your pocket. According to Adil Shetty, CEO, BankBazaar, employees should consider not only the basic salary but also the impact of allowances like HRA, which can take your total monthly income to new heights.

How will the mathematics of HRA work?

At present, central employees get HRA based on their city category (X, Y, Z). In X-category cities (metro cities) it is 30% of the basic pay, in Y-category it is 20% and in Z-category it is 10%. If the fitment factor increases, the basic salary will automatically increase and the HRA amount will automatically increase. Employees living in metro cities are going to benefit the most from this.

Effect of fitment factor: at a glance

If we look at the example, the current basic salary of a Level-1 employee is Rs 18,000. If the fitment factor is 2.0, then the basic salary will be Rs 36,000 and HRA in X-category can reach around Rs 10,800.

If the fitment factor is fixed at 2.57, then the basic salary of a Level-1 employee will be Rs 46,260. In such a situation, HRA in X-category can be Rs 13,880, in Y-category it can be Rs 9,250 and in Z-category it can be Rs 4,630. At the same time, the basic salary of level-10 employees, which is currently Rs 56,100, can cross Rs 1.44 lakh, due to which their HRA can increase to Rs 43,250 (X-category). However, the final decision will be clear only after the government takes the decision on fitment factor and allowance structure.