8th Pay Commission salary hike: How much can Level 1 and 2 employees’ gross salary rise at 2.0, 2.38 and 2.57 fitment factors?

8th Pay Commission salary: The fitment factor is expected to play a key role in determining salary revisions under the 8th Pay Commission. While it directly increases an employee's basic pay, the actual rise in gross salary may be much lower because several allowances are calculated differently. Based on illustrative calculations by BankBazaar, a 2.0 fitment factor could result in around a 31% increase in gross salary for Level 1 and Level 2 employees, even though the basic pay can double. Here's a look at how gross salary could change at 2.0, 2.38 and 2.57 fitment factors for Level 1 and 2 central government employees under the 8th Pay Commission.

Looking at previous Central Pay Commissions’data, the increase in employees' gross salary has varied widely. The 4th Pay Commission resulted in an estimated 27.6% increase in gross pay, with the minimum basic salary fixed at Rs 750.

The 5th Pay Commission raised the gross salary by around 31%, taking the minimum basic pay to Rs 2,550.

The 6th Pay Commission, which introduced a 1.86 fitment factor, saw the gross salary increasing by about 54% and the minimum basic pay rising to Rs 7,000.

Under the 7th Pay Commission, a 2.57 fitment factor was adopted, but the increase in the gross salary was relatively lower at around 14.29%, while the minimum basic pay was revised to Rs 18,000.

Salary components vary depending on work, status of job, risk in job, place of posting, etc. But the basic components of salary for most employees are basic pay, dearness allowance (DA), house rent allowance (HRA) and transport allowance (TPTA).

Current the 7th CPC, the basic salary for Level 1 employee= Rs 18,000
Gross salary of Level 1 employee= Basic salary+DA (60% of basic pay)+HRA (24% of basic pay for X category cities)
8th CPC revised basic salary particulars for calculations (As per Bankbazaar)
Revised basic salary= Current basic pay X fitment factor
New gross salary= Revised basic salary+ 24% HRA of revised basic salary (for X category city) (DA will set at 0 in a new pay commission)
Basic pay hike (%)= Revised basic-current basic pay (%)
Gross salary hike (%)= % hike of new vs old gross salary
Growth ratio= Gross salary hike/basic pay hike

For easy understanding of readers, Bankbazaar has left out transport allowance and other allowances and has taken just basic pay and HRA for gross salary calculations.

For an employee with a current basic pay of Rs 18,000, the current gross salary will be around Rs 34,200, assuming 60% DA and 24% HRA

If the 8th Pay Commission recommends a 2.0 fitment factor, the basic pay would increase to Rs 36,000, while the estimated gross salary would rise to about Rs 44,640. This means that the basic pay would double, but the estimated gross salary would increase by around 31%.

For a Level 2 employee with a current basic pay of Rs 19,900, the current gross salary is Rs 37,810, assuming 60% DA and 24% HRA.
If the 8th Pay Commission recommends a 2.0 fitment factor, the basic pay would increase to Rs 39,800, while the estimated gross salary would rise to around Rs 49,352. This means the basic pay would double, but the estimated gross salary would increase by around 31%.

Under a 2.38 fitment factor, the revised basic pay would become Rs 47,362, taking the estimated gross salary to approximately Rs 58,729. This works out to an estimated 138% increase in basic pay and a 55% rise in gross salary.

If the fitment factor is fixed at 2.57, the basic pay would increase to Rs 51,143, while the estimated gross salary would rise to about Rs 63,417. In this scenario, the basic pay would be 157% higher than the current level, while the estimated gross salary would increase by around 68%.

Disclaimer: Illustrative estimates based on assumed fitment factors; final pay and allowances may vary. Source: BankBazaar.com