Big shock or good news for central government employees? When and by how much will the 8th Pay Commission increase the salary?

Now the waiting hours have started for lakhs of central government employees and pensioners. The 7th Pay Commission will formally end on 31 December 2025 and after this the discussions about the 8th Pay Commission have gained momentum. When will the new salary structure be implemented, how much will be the increase in salary and what will be the change in pension – these questions are revolving in the mind of every employee.

Terms of Reference gets green signal

A major step towards the 8th Pay Commission was taken in October 2025. The Union Cabinet approved its Terms of Reference. The Commission will have to submit recommendations related to salaries, allowances and pensions to the government within about 18 months from November 2025. That means now the work of the commission is about to start.

The new salary structure may come into effect from January 1, 2026, but it will take time for the salary to increase.

Considering past experiences, January 1, 2026 is being considered as the effective date of the new pay structure. But this does not mean that more salary will start coming into the employees’ accounts from the same day. Prateek Vaidya, MD and Chief Vision Officer, Karma Management Global Consulting Solutions, says that there is always a difference between implementation on paper and actually getting the money.

Big lesson learned from 7th Pay Commission

Prateek Vaidya gave the example of 7th Pay Commission. Its effect was expected from January 2016, but cabinet approval was received in June 2016. After that the outstanding amount (arrears) was given in installments. The same is likely to happen in the 8th Pay Commission also. The actual salary increase and payment of arrears may take place in the financial year 2026-27.

How much can the salary increase?

No official figures have been revealed yet, but initial estimates are being made on the basis of previous pay commissions and the current situation.

• There was an average increase of about 40% in the 6th Pay Commission.
• In the 7th Pay Commission, it was around 23 to 25%, in which fitment factor of 2.57 was applied.

It is expected that the salary will increase by 20% to 35% in the 8th Pay Commission. The fitment factor may remain between 2.4 to 3.0, which will bring a good increase in the basic salary especially of the lower and entry level employees.

The final decision depends on these things

According to Prateek Vaidya, the final decision on salary increase depends on many economic and financial factors. This will include aspects like inflation in the coming 12-18 months, financial position of the government after the 16th Finance Commission, tax collection and political balance. The government will try to bring such an increase which will provide relief to the employees and also maintain financial discipline.

Overall, the 8th Pay Commission is going to bring a big change for the central employees, but the wait may be a little long.