8th Pay Commission salary calculator: Can Level 8 employees get Rs 29 lakh extra pay in 10 years at 7% annual increment rate?

The 8th Pay Commission, after its two-day stakeholders’ consultation meet in Jaipur, is now scheduled to visit Chennai on September 7 and 8. Employee and pensioner bodies and other stakeholders will meet the 8th CPC officials to discuss several issues. However, increasing the annual increment rate from 3% is an issue that almost all leading organisations have prominently raised in the previous meeting and is likely to be discussed again.

The current annual increment rate of 3% for central government employees, they believe, is insufficient to help them meet rising expenses. Organisations have recommended increasing the increment rate to up to 7%. If approved, how will a higher increment rate of 5% or 7% impact the salaries of central government employees?

Recommendations for higher increment rate


The National Council of the Joint Consultative Machinery (NC-JCM), which is the main central government employees’ body, has suggested a 6% annual increment rate in its memorandum submitted to the 8th Pay Commission.

Also Read: Big CGHS relief for families: Lifelong medical cover for married dependent sons, brothers with critical illnesses

The All India Defence Employees’ Federation (AIDEF) and the Federation of National Postal Organisations (FNPO) have also recommended a 6% annual increment rate each. The All India New Pension Scheme Employees’ Federation (AINPSEF), on the other hand, wants a 7% annual increment rate.


8th CPC annual increment rate recommendations by employee bodies

Organisation	Proposed Annual Increment
National Council of the Joint Consultative Machinery (NC-JCM)	6%
All India Defence Employees' Federation (AIDEF)	6%
Federation of National Postal Organisations (FNPO)	6%
All India New Pension Scheme Employees Federation (AINPSEF)	7%
Indian Railways' Supervisors' Association (IRTSA)	5%

How 3% annual increment rate impacts salaries of central government employees

Let’s begin with a Level 1 employee whose starting basic pay as per the 7th Pay Commission is Rs 18,000. At a 3% increment rate, their basic pay would reach Rs 23,500 at the end of the 10th year of the pay commission.

Similarly, a Level 5 employee has a starting basic salary of Rs 29,200 as per the 7th Pay Commission. They would have got approximately Rs 38,100 at the end of the 10th year of the pay commission.

Also Read: 8th Pay Commission for pensioners: DoPT backs pension revision for past pensioners; has this happened before?

Basic pay of Level 1-5 employees at 3% annual increment rate (As per 7th CPC)

Year	Level 1	Level 2	Level 3	Level 4	Level 5
1	₹ 18,000	₹ 19,900	₹ 21,700	₹ 25,500	₹ 29,200
2	₹ 18,500	₹ 20,500	₹ 22,400	₹ 26,300	₹ 30,100
3	₹ 19,100	₹ 21,100	₹ 23,100	₹ 27,100	₹ 31,000
4	₹ 19,700	₹ 21,700	₹ 23,800	₹ 27,900	₹ 31,900
5	₹ 20,300	₹ 22,400	₹ 24,500	₹ 28,700	₹ 32,900
6	₹ 20,900	₹ 23,100	₹ 25,200	₹ 29,600	₹ 33,900
7	₹ 21,500	₹ 23,800	₹ 26,000	₹ 30,500	₹ 34,900
8	₹ 22,100	₹ 24,500	₹ 26,800	₹ 31,400	₹ 35,900
9	₹ 22,800	₹ 25,200	₹ 27,600	₹ 32,300	₹ 37,000
10	₹ 23,500	₹ 26,000	₹ 28,400	₹ 33,300	₹ 38,100

Source: 7th Pay Commission report

Other than basic salary, most employees get dearness allowance (DA), house rent allowance (HRA), and transport allowance (TPTA). However, employee associations believe that even after getting these allowances, employees at low levels struggle to meet expenses, especially if they are posted in Tier I cities. The AINSPEF says that a 7% annual increment rate can nearly double employees’ basic salary in a pay commission.

How employees’ basic pay may be impacted at 5%-7% annual increment rates

Let’s take the example of a Level 8 employee with a basic salary of Rs 47,600. Assuming that the 8th Pay Commission may approve a 2.15 fitment factor, we will compare how the employee’s basic salary will change in 10 years at annual increment rates of 3%, 5%, 6%, and 7%.

Salary calculation assumptions

• Basic salary of Level 8 employee- Rs 47,600
• Estimated revised salary in 8th CPC- Basic pay x 2.15 fitment factor
• Annual increment (at 3%) of revised basic pay
• Total salary in 10 years (at 3% increment)
• Annual increment (at 5%-7%) of revised basic pay
• Total salary in 10 years (at 5%-7% increment)
• Extra salary in 10 years = (Total pay in 10 years at 5-7% annual increment) - (Total pay in 10 years at 3% annual increment)"

Salary benefit in 10 years at 3% vs 5% annual increment rate

Current basic - Level 1	₹ 47,600
Revised basic @ x2.15	₹ 1,02,340

Year	Monthly Basic(with 3% Increment)	Annual Salary (3%)	Monthly Basic(with 5% Increment)	Annual Salary (5%)
1	₹ 1,02,340	₹ 12,28,080	₹ 1,02,340	₹ 12,28,080
2	₹ 1,05,410	₹ 12,64,922	₹ 1,07,457	₹ 12,89,484
3	₹ 1,08,573	₹ 13,02,870	₹ 1,12,830	₹ 13,53,958
4	₹ 1,11,830	₹ 13,41,956	₹ 1,18,471	₹ 14,21,656
5	₹ 1,15,185	₹ 13,82,215	₹ 1,24,395	₹ 14,92,739
6	₹ 1,18,640	₹ 14,23,681	₹ 1,30,615	₹ 15,67,376
7	₹ 1,22,199	₹ 14,66,392	₹ 1,37,145	₹ 16,45,745
8	₹ 1,25,865	₹ 15,10,383	₹ 1,44,003	₹ 17,28,032
9	₹ 1,29,641	₹ 15,55,695	₹ 1,51,203	₹ 18,14,433
10	₹ 1,33,530	₹ 16,02,366	₹ 1,58,763	₹ 19,05,155
Total pay in 10 years		₹ 1,40,78,561		₹ 1,54,46,658
Extra pay in 10 years				₹ 13,68,097

Salary benefit in 10 years at 3% vs 6% annual increment rate

Year	Monthly Basic(with 3% Increment)	Annual Salary (3%)	Monthly Basic(with 6% Increment)	Annual Salary (6%)
1	₹ 1,02,340	₹ 12,28,080	₹ 1,02,340	₹ 12,28,080
2	₹ 1,05,410	₹ 12,64,922	₹ 1,08,480	₹ 13,01,765
3	₹ 1,08,573	₹ 13,02,870	₹ 1,14,989	₹ 13,79,871
4	₹ 1,11,830	₹ 13,41,956	₹ 1,21,889	₹ 14,62,663
5	₹ 1,15,185	₹ 13,82,215	₹ 1,29,202	₹ 15,50,423
6	₹ 1,18,640	₹ 14,23,681	₹ 1,36,954	₹ 16,43,448
7	₹ 1,22,199	₹ 14,66,392	₹ 1,45,171	₹ 17,42,055
8	₹ 1,25,865	₹ 15,10,383	₹ 1,53,882	₹ 18,46,578
9	₹ 1,29,641	₹ 15,55,695	₹ 1,63,114	₹ 19,57,373
10	₹ 1,33,530	₹ 16,02,366	₹ 1,72,901	₹ 20,74,815
Total pay in 10 years		₹ 1,40,78,561		₹ 1,61,87,071
Extra pay in 10 years				₹ 21,08,510

Salary benefit in 10 years at 3% vs 7% annual increment rate

Year	Monthly Basic(with 3% Increment)	Annual Salary (3%)	Monthly Basic(with 7% Increment)	Annual Salary (7%)
1	₹ 1,02,340	₹ 12,28,080	₹ 1,02,340	₹ 12,28,080
2	₹ 1,05,410	₹ 12,64,922	₹ 1,09,504	₹ 13,14,046
3	₹ 1,08,573	₹ 13,02,870	₹ 1,17,169	₹ 14,06,029
4	₹ 1,11,830	₹ 13,41,956	₹ 1,25,371	₹ 15,04,451
5	₹ 1,15,185	₹ 13,82,215	₹ 1,34,147	₹ 16,09,762
6	₹ 1,18,640	₹ 14,23,681	₹ 1,43,537	₹ 17,22,446
7	₹ 1,22,199	₹ 14,66,392	₹ 1,53,585	₹ 18,43,017
8	₹ 1,25,865	₹ 15,10,383	₹ 1,64,336	₹ 19,72,028
9	₹ 1,29,641	₹ 15,55,695	₹ 1,75,839	₹ 21,10,070
10	₹ 1,33,530	₹ 16,02,366	₹ 1,88,148	₹ 22,57,775
Total pay in 10 years		₹ 1,40,78,561		₹ 1,69,67,703
Extra pay in 10 years				₹ 28,89,143

10-year salary increase percentage estimates (3% vs 5-7%)

Annual increment rate	Estimated salary increase in 10 years	Increase vs 3% increment rate
3%	—	—
5%	₹13.68 lakh	9.72% more
6%	₹21.08 lakh	14.98% more
7%	₹28.89 lakh	20.52% more

You can see how a 1% annual increment rate hike can make a big difference in the basic salaries of central government employees. However, these are just estimates, and the real increment rate and salary hike will be known only after the government notifies the 8th Pay Commission report.