The central government on October 1 gave a festive gift to employees and pensioners, announcing the DA hike for the July-December 2025 period. The government increased the Dearness Allowance (DA) and Dearness Relief (DR) by 3%, taking the rate from 55% to 58%. This decision has brought cheers to over 1.2 crore employees and pensioners who were eagerly awaiting the announcement ahead of Diwali.
How much increase will a Level-1 employee receive?
The minimum basic salary of central government employees at Level-1 is Rs 18,000. The 3% DA increase will result in an increase of Rs 540 per month. This means that a Level-1 employee will now receive a total DA of Rs 10,440 per month on their basic salary (58% of Rs 18,000).
Similarly, pensioners with a minimum basic salary of Rs 9,000 will receive an additional pension of Rs 270 per month, bringing the total DR to Rs 5,220.
Arrears from July will be available
The government implemented this increase effective July 1, 2025. This means that the salary and pension received in October will include arrears from July to September. Level-1 employees will receive three months’ arrears of Rs 1,620 (Rs 540 x 3).
Bonus announcement for govt employees
The government has also announced a bonus. The Finance Ministry has issued an order stating that central government Group C and non-gazetted Group B employees will receive an “ad-hoc bonus” equivalent to 30 days’ salary for the year 2024-25. This amount has been fixed at Rs 6,908.
However, not all employees will receive this bonus. Only employees who are in service as of March 31, 2025, and have worked continuously for at least six months will be eligible for this bonus. Employees who have not worked for the entire year will receive the bonus on a pro-rata basis.
What is the total benefit for a Level-1 employee?
If we consider only Level-1 employees, in October they will receive an additional benefit of Rs 8,528, consisting of DA arrears of Rs 1,620 and a bonus of Rs 6,908. Additionally, their salary will receive a permanent increase of Rs 540 per month.
Last DA hike of 7th Pay Commission
This hike is the last DA hike of the 7th Pay Commission, as its term ends on December 31, 2025. Now, employees are looking towards the 8th Pay Commission. The government announced the 8th Pay Commission in January 2025, but neither its terms of reference nor the appointment of its members have been finalised.
It is believed that the 8th Pay Commission, which is scheduled to be implemented from January 1, 2026, will not be able to begin work on time, and its recommendations may take at least two years to be implemented. However, whenever the Commission’s report is implemented, it will be considered effective from January 2026, and employees will receive arrears.
Summing up…
Overall, the increase in DA/DR at all levels, from Level 1 to Level 18, will directly benefit salaries and pensions. Meanwhile, Group C and non-gazetted Group B employees will receive the additional bonus. Now, employees are awaiting the next major announcement: the formal launch of the 8th Pay Commission.