8th Pay Commission Effective Jan 01, 2026: Will Central Govt Employees’ Salary Really Increase?

8th Pay Commission: Central government employees are widely expecting a salary hike from January 1, 2026, as the 8th Pay Commission is slated to take effect from that date. However, the reality is a bit different. There will be no immediate increase in monthly salary from January 2026.

The actual revision in pay will come only after the 8th Pay Commission submits its recommendations and the Union Cabinet approves them, which is expected after May 2027.

“Going by this trend, the effect of the 8th Central Pay Commission recommendations would normally be expected from 01.01.2026,” an old PIB press note said.

Employees and pensioners don’t need to get upset about it. The arrears will begin to accumulate from January 01, 2026 onward. Once the 8th Pay

Commission approval, the revised salary will be paid going forward, and employees will also receive the arrears for the period starting January 1, 2026.

This gap between the effective date and the final implementation follows past pay commission trends, where benefits are given retrospectively but paid after formal approval.

A source in the employee unions told news18.com that the date of effect is not given under the terms of reference (ToR) of the 8th Pay Commission. They added that revised salaries under the 8th Pay Commission should become due with effect from January 1, 2026, as the 7th CPC’s term ends on December 31, 2025. Previously, salary arrears (basic pay and dearness allowance) were paid to the employees after the new pay panel was implemented.

“Generally, pay commissions are implemented with retrospective effect. Under the 8th Pay Commission also, we demand that the revised salaries should become due from January 1, 2026, as the term of the 7th Central Pay Commission ends on December 31, 2025. Accordingly, employees should receive arrears once the new pay panel is implemented. However, no date of effect is mentioned in the ToR. The 8th Pay Commission is expected to be implemented only by late 2027 or early 2028,” the source said.

He, however, mentioned that previous pay commissions’ ToR had clearly specified the date from which revised salaries would take effect. However, the terms of reference of the 8th Pay Commission do not mention any such salary revision date. He said the Confederation of Central Government Employees and Workers (CCGEW) has raised this concern with Prime Minister Narendra Modi through a letter last month.

8th Pay Commission Fitment Factor: How Much Will Salaries Increase?

The staff side of National Council-Joint Consultative Machinery (NC-JCM), earlier, told NDTV Profit that it is expected that 8th pay commission to recommend a fitment factor that could be similar to 7th pay panel.

Ambit report in July suggested that the fitment factor is expected to be fixed in the range of 1.83 to 2.46.

“As per back-of-the-envelope calculations, depending on the salary growth seen over different Pay Commissions, the range of fitment factors that the government could be looking at lies between 1.83 and 2.46,” financial services firm Ambit Capital said in a report.

Going by Ambit Capital’s expectation of a fitment factor between 1.83 and 2.46, the minimum salary of central government employees may be fixed between Rs 32,940 and Rs 44,280, compared with the current Rs 18,000 a month.

A fitment factor of 1.83 would raise the basic salary from Rs 18,000 to around Rs 32,940, while a factor of 2.46 would raise it to Rs 44,280.

The final increase in salaries will depend on the fitment factor decided. The 8th Pay Commission will revise salaries, pensions, and allowances, directly benefiting over 50 lakh central government employees and over 65 lakh pensioners.

Ambit Capital in the report estimates that the 8th Pay Commission may result in a minimum 14% real hike in pay (including Basic Pay+DA) and a maximum of 54%. However, the maximum 54% hike in real pay is highly unlikely as the government could face significant financial challenges in implementing the same.

“While the government might consider a higher increase, potentially using it as a consumption stimulus, expecting a substantial 54% jump (as seen during the 6th Pay Commission) seems unlikely, since it could face significant financing challenges,” the report said.

No DA Merger With Basic Pay

Earlier, the government denied reports suggesting the merger of Dearness Allowance (DA) with the basic pay, stating ‘no proposal in consideration’.

Union Minister of State for Finance Pankaj Chaudhary earlier this month said the central government has notified the constitution of the 8th Central Pay Commission, and there is no proposal as of now to merge the existing dearness allowance (DA) or dearness relief (DR) with the basic pay.

“No proposal regarding merger of the existing dearness allowance with the basic pay is under consideration with the government at present. In order to adjust the cost of living and to protect basic pay/ pension from erosion in real value on account of inflation, the rates of DA/ DR are revised periodically every six months on the basis of the All India Consumer Price Index for Industrial Workers (AICPI-IW) released by Labour Bureau, Ministry of Labour and Employment,” Chaudhary said in response to a query in the Lok Sabha.