8th Pay Commission: When Are Arrears Likely to Be Paid and How Much Can Central Government Employees Expect?

New Delhi, December 31: The long-awaited 8th Pay Commission is scheduled to take effect from January 1, 2026, aligning with the end of the 7th Pay Commission. While the effective date is fixed, central government employees and pensioners should be prepared for a delay in actual salary disbursement. This gap between the effective date and rollout is expected to result in arrears, paid as a lump sum once the revised pay structure is notified.

Delayed Implementation and Arrears Timeline

Traditionally, central pay commissions are revised every 10 years. Although the 8th Pay Commission becomes applicable from early 2026, experts indicate that the final notification on revised pay slabs may come much later. 8th Pay Commission News: Massive Salary Hikes for Level 1–5 Employees Expected From 2026, Check Details.

The commission was approved with its Terms of Reference in 2025 and is expected to take around 18 months to submit its report. As a result, implementation could slip to late 2026 or even the 2027–28 financial year. Since the revision is backdated to January 1, 2026, employees will receive arrears for the intervening months. 8th Pay Commission: What Is Fitment Factor? Know How It Is Determined As Central Government Employees Await Implementation of New Pay Commission.

Arrears will be calculated based on the difference between existing pay and the revised salary.

For example, if an employee’s monthly salary rises by INR 5,000 and implementation is delayed by 15 months, total arrears would amount to INR 75,000. Importantly, arrears apply to the full pay package, including allowances, not just basic pay.

Tax Implications for Employees

While arrears offer a significant one-time financial gain, they are fully taxable. With higher salaries under the 8th Pay Commission, many employees may move into the 30% income tax bracket, meaning a sizeable portion of the arrear payout could be taxed at a higher rate.

Background and Current Status

The 8th Pay Commission is expected to revise pay, allowances and pensions for over one crore central government employees and pensioners, factoring in inflation and rising living costs. Although the government has confirmed January 1, 2026, as the effective date, the much-awaited fitment factor, the key multiplier determining the hike, has yet to be announced.

(The above story first appeared on LatestLY on Dec 31, 2025 03:32 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).