Mumbai, February 2: As of February 2026, the Central Government has officially approved the 8th Central Pay Commission (8th CPC), initiating a comprehensive review of the pay, allowances, and pensions for over 1.1 crore employees and retirees. A critical component of this transition is the "fitment factor," the multiplier used to recalculate basic salaries. With the commission's Terms of Reference now notified, speculation is growing that the new pay structure - expected to be implemented retroactively from January 1, 2026 - could lead to the most significant salary hike in a decade.

What Is the Fitment Factor?

The fitment factor is a uniform multiplier used to convert an employee's existing basic pay into the new pay matrix. It acts as a standardised "bridge", ensuring that salary increases are applied equitably across all government ranks, from entry-level staff to senior officers. 8th Pay Commission News: Nirmala Sitharaman’s Budget 2026 Speech Leaves Central Government Employees Waiting Over Implementation of 8th CPC.

Beyond just basic pay, the fitment factor is the foundation for the entire salary structure. Since allowances like Dearness Allowance (DA), House Rent Allowance (HRA), and future pensions are calculated as a percentage of the basic pay, a higher fitment factor results in a compounding increase in total take-home earnings.

Current Rate Under the 7th Pay Commission

Under the current 7th Pay Commission framework, which has been in place since 2016, the fitment factor is fixed at 2.57. This multiplier was used to revise the older 6th Pay Commission scales, effectively raising the minimum basic salary for a Level 1 employee to INR 18,000. While the 7th CPC simplified the salary structure by replacing "grade pay" with a single pay matrix, employee unions have long argued that the 2.57 rate has not kept pace with the actual cost of living. Currently, the DA has crossed the 60 per cent threshold, highlighting the widening gap between base pay and inflationary costs.

Expected Rates for the 8th Pay Commission

While the government has yet to announce the official figure, several projections are currently being discussed based on union demands and historical inflation trends:

Conservative Projection (1.92x to 2.15x): Some analysts suggest a lower multiplier if the government chooses to prioritise fiscal consolidation. A 1.92 factor would move the minimum basic pay to roughly INR 34,560.

Moderate Projection (2.86x): This is widely cited as a likely balanced option. A 2.86 fitment factor would increase the minimum basic pay from INR 18,000 to INR 51,480.

Employee Union Demands (3.00x to 3.68x): Major employee federations are pushing for a multiplier between 3.00 and 3.68. If a 3.00 factor is adopted, the minimum basic salary would jump to INR 54,000. 8th Pay Commission Arrears Calculation: How Delayed Salary Hikes May Be Calculated and Paid.

Timeline and Background Context

Pay Commissions in India are typically constituted every ten years to adjust government compensation. The 8th Pay Commission was officially approved in early 2025, and the recent Union Budget 2026 discussions suggest the government is bracing for a financial impact estimated between INR 2.4 lakh crore and INR 3.2 lakh crore. Experts indicate that while the commission may not submit its final report until mid-2027, the revisions will likely be backdated to January 1, 2026, meaning employees would receive significant arrears for the intervening period.

(The above story first appeared on LatestLY on Feb 02, 2026 03:35 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).