8th Pay Commission DA Hike 2025: The 8th Pay Commission is set to significantly impact the salaries and pensions of over 50 lakh central government employees and around 65 lakh pensioners in India, with its recommendations expected to come into effect from January 1, 2026. A key feature of this pay revision is the fitment factor.
which experts estimate will range between 1.83 and 2.46, potentially resulting in a salary hike of 30-34%, considerably improving the take-home pay of government employees.
Additionally, the Dearness Allowance (DA), which currently stands at 58% of the basic pay as of July 2025, will be reset to zero with the implementation of the new pay commission and subsequently revised biannually to offset inflation.
8th Pay Commission DA Hike 2025 – Salary Impact Table
| Pay Matrix Level | Current Basic Pay (₹) | Estimated Fitment Factor | Revised Basic Pay (₹) | DA (%) (Reset to 0 Jan 2026) | Estimated DA After 6 Months (%) | Revised Gross Salary (₹) Approximate |
|---|---|---|---|---|---|---|
| Level 1 | 18,000 | 1.83 – 2.46 | 32,940 – 44,280 | 0 | 5 – 20 (gradual increments) | 34,600 – 53,000 |
| Level 5 | 32,000 | 1.83 – 2.46 | 58,560 – 78,720 | 0 | 5 – 20 | 61,500 – 94,500 |
| Level 10 | 56,000 | 1.83 – 2.46 | 1,02,480 – 1,37,760 | 0 | 5 – 20 | 1,07,600 – 1,65,000 |
Key Highlights of 8th Pay Commission DA Hike 2025
Fitment Factor: The multiplying factor to revise basic pay, expected between 1.83 and 2.46, directly affecting pay matrix levels.
DA Reset: The current DA, which adds to basic pay, will be reset to zero on implementation, simplifying pay structure and recalculations.
Revised DA: Post-reset, DA increases gradually every six months based on inflation as measured by the All India Consumer Price Index for Industrial Workers (AICPI-IW).
Allowances Impact: House Rent Allowance (HRA) and other linked allowances will increase commensurate with upward basic pay, whereas fixed allowances like Transport Allowance may be revised separately.
Pensioners: Pensions will be recalculated using the new pay matrix and fitment factor, ensuring a proportional rise in retirement benefits.
Implementation: Recommendations are scheduled for rollout from January 2026, likely accompanied by arrears due to delayed effect.
The Impact on Government Employees and Pensioners
The 8th Pay Commission’s recommendations aim to address rising living costs by streamlining pay and allowances with inflation trends, thereby enhancing financial security for employees and pensioners.
This restructuring promises higher disposable income through increased basic pay and renewed DA cycles while also simplifying previous complex allowances structures. Moreover, the incorporation of performance-linked pay and possible pension scheme reforms is under consideration to modernize government compensation further.