Arrear payouts that Level 1-5 employees can get under 8th Pay Commission: Calculations at 2.0, 2.15, 2.28 and 2.57 fitment factors

The revised payouts from 8^th Pay Commission will kick in from January 1, 2026, following the end of the 7^th Pay Commission’s term on December 31, 2025. Central government employees and pensioners will receive arrears starting from January 1, 2026, until the revised payouts for the 8^th Pay Commission are officially announced.

Pratik Vaidya, MD & chief vision officer, Karma Management Global Consulting Solutions, told ET Wealth online: “The 8th Pay Commission is expected to be implemented around mid-2027, but salary revision is likely to take retrospective effect from 1 January 2026, resulting in arrears of around 12–24 months. The 7th Pay Commission tenure ended on December 31, 2025, making January 1, 2026, the logical effective date for the 8th CPC.”

If you are a Level 1-5 employee according to the 7^th Pay Commission pay matrix, you might be wondering how much arrears you could receive with the 8^th Pay Commission. Let’s see what the experts have to say about it.

How arrears for a central government employee can be calculated under the 8th Pay Commission

Ramachandran Krishnamoorthy, director – payroll services, Nexdigm, says arrears can be calculated as:

Monthly pay difference × number of delayed months

The revised pay is derived by applying the approved fitment factor to the existing 7th CPC basic pay.

Krishnamoorthy further says arrears typically include:

•Difference in basic pay

•Difference in dearness allowance (DA) on the revised basic pay

•The total arrears depend on: Length of delay (e.g., 18–24 months)

How Level 1-5 employees can benefit from different fitment factors in the 8th Pay Commission?

Vaidya says the 7th CPC fitment factor was 2.57, while estimates for the 8th CPC range between 1.83 and 2.46.

At the lower end (1.83), the minimum basic pay of a Level 1 employee could rise from Rs 18,000 to Rs 32,940, while at the upper end (2.46), the minimum basic pay of the same employee could reach Rs 44,280.

Krishnamoorthy says the fitment factor is the single most important determinant of arrears.

Formula of revised basic pay:

Revised basic pay = Existing basic pay × fitment factor

Krishnamoorthy shows how the basic pay of a Level 1 employee can rise in the 8^th Pay Commission under 1.92, 2.15 and 2.57 fitment factors.

Example (Level 1, basic pay Rs 18,000):

1.92× → Basic = Rs 34,560

2.15× → Basic = Rs 38,700

2.57× → Basic = Rs 46,260

Can central government employees also get arrears for allowances such as house rent allowance (HRA) and transport allowance (TA) in the 8th Pay Commission?

Krishnamoorthy says based on past CPC practices-

• DA arrears are paid, recalculated month-wise on the revised basic pay.

• HRA arrears are usually not paid, as HRA is revised prospectively.

• Transport allowance arrears are generally not paid, since it is a fixed amount.

“Employees should not expect arrears on fixed or policy-driven allowances unless explicitly notified,” says Krishnamoorthy.

Vaidya says allowances such as DA, HRA and TA are linked to basic pay and typically increase automatically.

Sample calculation of arrears for Level 1–5 employees under different fitment factors

Krishnamoorthy provided arrear calculations for Level 1–5 central government employees under the 8th Pay Commission, using fitment factors of 2.0, 2.15, 2.28 and 2.57.

Assumptions used for the Calculation

• Effective date: January 1, 2026

• Arrear period: For 20 months

• Basis of arrears: Difference in basic pay only (DA impact explained separately)

• Allowances (HRA, TA, etc.): Not included

• Existing pay: As per the 7th CPC starting basic pay for Levels 1–5

Sample Arrear Calculation (Levels 1–5) – 20 Months

Step 1: Existing (7th CPC) basic pay

Level	Basic Pay (₹)
Level 1	18,000
Level 2	19,900
Level 3	21,700
Level 4	25,500
Level 5	29,200

Step 2: Revised basic pay at different fitment factors

Level	2.0×	2.15×	2.28×	2.57×
L1	36,000	38,700	41,040	46,260
L2	39,800	42,785	45,372	51,143
L3	43,400	46,655	49,476	55,769
L4	51,000	54,825	58,140	65,535
L5	58,400	62,780	66,576	75,044

Step 3: Monthly increase in basic pay (Rs)

Level	2.0×	2.15×	2.28×	2.57×
L1	18,000	20,700	23,040	28,260
L2	19,900	22,885	25,472	31,243
L3	21,700	24,955	27,776	34,069
L4	25,500	29,325	32,640	40,035
L5	29,200	33,580	37,376	45,844

Step 4: Arrears for 20 months (Rs lakh, Basic Pay Only)

Level	2.0×	2.15×	2.28×	2.57×
L1	3.60	4.14	4.61	5.65
L2	3.98	4.58	5.09	6.25
L3	4.34	4.99	5.56	6.81
L4	5.10	5.87	6.53	8.01
L5	5.84	6.72	7.48	9.17

Key takeaways for readers

• The fitment factor has a direct and compounding impact on arrears

• Moving from 2.0× to 2.57× can increase arrears by Rs 2–3 lakh or more over 20 months

• Levels 4 and 5 benefit the most in absolute terms due to a higher base pay