8th Pay Commission Salary hike: Understanding the Fitment Factor & HRA

New Delhi: In a huge relief to the central government employees and pensioners, the Union Cabinet chaired by Prime Minister Narendra Modi on Tuesday approved the Terms of Reference (ToR) of the 8th Pay Commission. Approximately 50 lakh government employees and 65 lakh pensioners will be directly benefited from this decision. Taking the example of fitment factor and city category, let us try to understand from different examples whose salary can increase by how much.

The most important thing is related to the fitment factor, which the commission will review. It is a multiplier i.e. multiplier, from which the existing basic pay is multiplied to decide the new basic salary. Since there is no information about the fitment factor yet, we are using the last 7th pay commission as a base, which was 2.57 times. However, with regard to the 8th Pay Commission, it is being speculated that the Commission can keep the fitment factor between 1.92x and 2.46x. However, grade pay level also plays an important role in knowing the number of salary increases. Know that there are a total of 18 grades and accordingly its pay is decided.

8th pay Commission How much will the salary increase?

This formula can be very useful in getting a knowledge of how much will the salary increase.

8th Pay Commission Salary Formula: New Salary = (Current Basic Pay × Fitment Factor) + HRA + Other Allowances. This formula will tell how much salary can be increased by which employee. In the formula here-

Fitment Factor: Can be fixed between 1.83 to 2.46

Dearness Allowance (DA): After the implementation of the 8th Pay Commission, it will be reset and start from 0 percent

HRA (House Rent Allowance): It will depend on the class of the city i.e., in which-

X Class (metro city): 30 percent

X Class (Tier-II City): 20 percent

Z Class (Tier-3 City): 10 percent

Example 1:

If the current basic salary of a government employee is Rs 50,000 and the fitment factor is 2.46, then the new basic salary can be 50,000 × 2.46 = Rs 1,23,000. If he lives in a metro city (HRA 30 percent), then his HRA will be Rs 36,900. That is, the total estimated salary will be Rs 1,59,900 per month.

Example 2:

If the basic pay of an officer is Rs 100,000, the fitment factor is 2.26 and the city is Y class (20 percent), then the new salary can be = (100,000 × 2.26) + 20,000 = Rs 2,46,000 per month.

How much can the minimum salary increase

According to media reports, the minimum basic pay can increase from Rs 18,000 rupees to Rs 30,000. This can lead to an increase in salary and pension by an average of 30-34 percent. Its estimated expenditure on the government will be around Rs 1.8 lakh crore. If we calculate different basic salaries according to 1.92x fitment factor, then-