8th Pay Commission: The Narendra Modi government announced in January this year the formation of a new pay panel to replace the 7th Pay Commission, whose term is scheduled to be completed in December 2025. As a next step, the government will announce the names of the three members, including the chairman, of the 8th Pay Commission.
Ever since the government announced the 8th Pay Commission, there has been speculation about the likely fitment factor, determining the extent of the salary hike for government employees. Apart from the fitment factor, everyone is keen to know whether the basic pay will be merged with the dearness allowance (DA) before a fitment factor is applied.
The fitment factor and DA (Dearness Allowance) merger with basic pay are crucial concepts in understanding how central government salaries are restructured during pay commission revisions.
Also read: Will central govt employees retiring before January 1, 2026 lose out on 8th Pay Commission benefits?
What is fitment factor?
The fitment factor is a multiplier used to revise basic pay during pay commission implementations. It ensures a uniform hike across all pay scales by factoring in inflation and previous allowances, especially DA.
Role of DA in pay revision
Past pay commissions — especially the 5th, 6th, and 7th — have effectively considered DA as merged with the basic pay before applying the fitment factor, even if not explicitly stated.
When the 7th Pay Commission was implemented in January 2016, central government employees were drawing 125% DA on their basic pay. The Commission recommended a fitment factor of 2.57, which essentially accounted for:
The fitment factor of 2.57x used in the 7th Central Pay Commission was not arbitrarily decided. It was derived from a structured calculation that effectively included 100% of the basic pay, 125% DA, and a real increase of around 14.22% over the merged amount of basic and DA.
So, the revised salary was based on a consolidated figure of basic pay and accumulated DA until 2016.
Calculation example:
If a government employee had a basic pay of Rs 10,000,
125% DA = Rs 12,500 (Rs 10,000 x 1.25),
Subtotal = Rs 22,500
14.22% hike = Rs 3,199.5
New pay = Rs 25,699.5 ~ rounded to Rs 25,700
Fitment factor = Rs 25,700 / Rs 10,000 = 2.57
This means the revised salary wasn’t based just on the old basic,
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