Salary hike for Level 1 govt employees after 8th Pay Commission 2026 — how much will your pay exactly rise?

8th Pay Commission: Central government employees are closely monitoring developments related to the new pay commission, which is expected to begin work on revising salaries and pensions for over 1 crore serving staff and pensioners. Once the panel is constituted and starts functioning, it may take at least a year to submit its report to the government. Given the current pace of progress, the 8th Pay Commission’s recommendations are likely to be implemented by the end of next year.

The government forms a Pay Commission every 10 years, which decides what changes should be made in things like salaries, allowances, and pensions of employees. The pay commission not only looks at salary but also at the terms of government service so that employees can get better financial security over time.

So far, seven pay commissions have been formed since 1947, in which the last i.e. 7th Pay Commission came into effect from 1 January 2016. Its tenure is till 31st December 2025. Now, it is expected that the 8th Pay Commission will be implemented from 1st January 2026. Going by the progress so far, however, it is highly unlikely that this timeline will be met.

Also read: 8th Pay Commission implementation may get delayed till 2027 – Here’s why

Ever since the 8th Pay Commission was announced earlier this year, the biggest talking point has been the fitment factor that will determine the hike in salaries and pensions of government employees and pensioners. There is widespread speculation suggesting that the fitment factor could range between 1.92 and 2.86. However, these are merely assumptions, as there has been no official confirmation yet. The government is still in the process of finalising the Terms of Reference (ToR) and appointing members to the commission.

ToR, in fact, are the rules and guidelines under which the commission will work.

Former Finance Secretary Subhash Chandra Garg is of the view that the government might settle for a fitment factor of around 1.92 for the revision of salary under the 8th Pay Commission. Even if a fitment factor of 1.92 is finalised, the actual salary hike will vary based on several other factors such as the pay band, and the specific pay level (ranging from Level 1 to Level 18).

What are the levels in the government?

The 7th Pay Commission, which came in 2016, implemented a new system called Pay Matrix in place of the old grade-pay system. In this, the salary is divided on the basis of posts from level 1 to 18.

Level 1: Initial posts like peon, clerk, MTS

Level 18: Highest posts like Cabinet Secretary

Also read: 8th Pay Commission Pay Matrix: Central govt employees’ expected salaries at Level 1-10 – Details inside!

Key Changes Introduced by the 7th CPC

Fitment Factor: A uniform multiplication factor of 2.57 was applied to the existing basic pay (including Grade Pay) to arrive at the new basic pay .

Pay Matrix: Replaced the Pay Band and Grade Pay system with a simplified Pay Matrix, assigning levels based on the post and years of service .

Dearness Allowance (DA): Adjusted periodically to compensate for inflation. As of May 2025, DA is 55% of the basic pay .

House Rent Allowance (HRA): Revised based on city classification:

X Class (Metro Cities): 24% of Basic Pay

Y Class (Tier-2 Cities): 16% of Basic Pay

Z Class (Rural Areas): 8% of Basic Pay

These rates are subject to change when DA crosses certain thresholds.

Transport Allowance (TA): Fixed amounts based on pay level and city classification. For example, employees in metro cities receive higher TA compared to those in smaller towns.

Also read: 8th Pay Commission: Govt employees’ basic salary may not be doubled as expected – Know why!

What are the benefits apart from salary?

The speciality of a government job is not just the salary but also the allowances and facilities that come with it:

Dearness Allowance (DA) – Increases every 6 months

House Rent Allowance (HRA) – Depends on the category of the city

Transport Allowance (TA) – According to the post and city

Other benefits – Expenses for children’s education, LTC, contribution to NPS, Government Health Scheme (CGHS) etc.

How much was the salary increased last time?

When the 7th Pay Commission was implemented, the basic salary of level 1 employees increased significantly. At that time the fitment factor was kept at 2.57.

How salary increased under the 7th Pay Commission:

Note: HRA rates under the 7th Pay Commission were reduced to 24%, 16%, and 8% for X, Y, and Z class cities (from 30%, 20%, and 10% under the 6th Pay Commission). The 7th CPC, however, also introduced minimum HRA amounts to protect lower-level staff.

Also read: 8th Pay Commission: Employees’ 15 big demands – Interim relief, at least 5 promotions and more!

How much salary increase a Level 1 govt employee can expect in 8th Pay Commission?

This time it is expected that the fitment factor can be between 1.92 to 2.86. If we assume it to be 1.92, then the current salary can increase to this:

The salary increase for Level 1 government employees may be 39.74% under the 8th Pay Commission. This is based on the DA expectation at 57%. There will be one more hike in DA in July this year. We assume that the next hike will remain at 2%. Currently, the DA stands at 55%.

Preparation of 8th Pay Commission – What has happened so far?

On 16 January 2024, the government officially announced the 8th Pay Commission. The process of forming the commission is likely to be completed soon. Employees’ unions are demanding interim relief from the government. Although the commission has been announced, its Terms of Reference (ToR) have not been issued yet.