Looking Forward To 8th Pay Commission? Know How 'Fitment Factor' Decides Your Paycheck

8th Pay Commission: The Union Cabinet chaired by Prime Minister Narendra Modi had given nod for the 8th Py Commission that impacts salaries of central administration employees, as per Union Minister Piyush Goyal's earlier announcement.

However, an official notification to this effect has not been issued yet. The Pay Commission, which  usually formed every 10 years, leads to revised salaries, allowances, and on the fitment factor.

How Does Fitment Factor Impact 8th Pay Comission?   

The revised pays, allowances, and salaries for central government employees will be calculated utilising the fitment factor. This comes into effect basis factors like growing needs of employees,  government spending ability, and inflation. 

The present salary structure is falls under the 7th Pay Commission fitment factor, which has been determing salaries since 2016. 

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Currently, the Pay Commission applies a fitment factor of 2.57 per cent. However, this does not mean salaries hiked by 2.57 times, as it's only applicable to the basic pay, raising it to a minimum amount of Rs 18,000. The actual increase in the salary component was 14.3 per cent. Notably, DA is reset to zero at the beginning of the new Commission, as the index is re-based. This is expected to happen under the 8th Pay Commission as well.

Salary Structure Under 8th Pay Commission

The salary of a central government employee is inclusive of dearness allowance (DA), house rent allowance (HRA), basic pay, and transport allowance. 

This Pay Commission is expected to benefit close to 50 lakh central government employees, including defence personnel. The revision in pay structure impacts close to 65 lakh central government pensioners, including defence retirees.