With the tenure of the 7th Pay Commission coming to an end on December 31, 2025, anticipation is building among central government employees and pensioners
over what the 8th Pay Commission may deliver. While expectations of a 20–35% salary hike are doing the rounds, the reality will depend on timelines, policy decisions and the final recommendations of the commission. The prospect of a fresh pay revision has once again put salary structures under the spotlight. In October 2025, the Union Cabinet cleared an important hurdle by approving the Terms of Reference for the 8th Pay Commission. This marked the formal beginning of the process. The commission has been given around 18 months from November 2025 to examine pay scales, allowances and pensions, and to submit its recommendations to the government. This indicates that while preparatory work has begun, employees may need to wait before seeing concrete outcomes. When will the 8th Pay Commission be implemented? Technically, the 8th Pay Commission is expected to take effect from January 1, 2026, immediately after the conclusion of the 7th Pay Commission period. However, actual disbursement of revised salaries may not happen immediately. According to CA Manish Mishra, Founder of GenZCFO, although January 1, 2026 is the notional effective date, higher salaries are unlikely to reflect in employees’ bank accounts until late 2026 or even during FY 2026–27. He points out that such delays are common and were also seen during previous pay commission implementations. What about salary arrears? Despite the expected delay in payouts, employees are not likely to lose financially. Experts indicate that salary arrears will most likely be calculated from January 1, 2026. Mishra explains that even if the revised pay structure is implemented later, arrears will be paid from the effective date once the government approves the commission’s recommendations. This ensures that employees receive compensation for the interim period. How much salary hike is expected? While official figures are yet to be announced, most projections suggest a salary hike in the range of 20–35%. The final increase will depend on several variables, including changes in the pay matrix, revisions in allowances and the fitment factor adopted by the government. The overall hike could be similar to, or slightly higher than, increases seen under previous pay commissions, though much will depend on fiscal considerations and policy priorities at the time. What government employees should keep in mind For now, employees and pensioners should balance optimism with patience. Although the government has initiated the process, implementation will take time. Past experience shows that the gap between announcement and actual payout can run into several months. That said, with arrears expected to be safeguarded and a meaningful salary increase likely, the 8th Pay Commission remains a crucial financial milestone for millions of government employees and pensioners in the coming years.
