8th Pay Commission: How much pay hike can central govt employees and pensioners expect?

8th Pay Commission: The central government on Thursday announced plans to set up the 8th Pay Commission  — with the salary and pension of more than 100 lakh people set to go up. Experts indicate that senior-level employees can expect their basic pay to rise by approximately 20 per cent while workers up to level five see a 25 per cent increase.

“Employees belonging to levels 6 to 12 can expect around 20 per cent basic pay hike. And according to that, they can expect an increase in HRA and transport allowance,” said Harishankar Tiwari, former president of AG Office Brotherhood.

He also explained that employees between level 1 and level 5 can expect a basic pay hike of approximately 25 per cent alongside an increase in HRA and transportation allowance.

According to a PTI report quoting sources, around 50 lakh central government employees — including defence personnel — will benefit from the decision. Another 65 lakh pensioners are also slated to see an uptick in their benefits. The pay commission also typically recommends the formula for revising dearness allowance and dearness relief for central government employees and pensioners to compensate them for inflation.

According to details shared by ClearTax, level one employees are likely to see their basic pay rise from ₹18,000 to ₹21,600. An increase between 20% to 35% is expected in basic salary for all eligible government employees — with the highest ranked level 18 workers seeing their base pay rise from ₹2,50,000 to ₹3,00,000 with the 8th pay commission.

Experts suggest that pension and other retirement benefits such as EPF and gratuity may also see some changes in the coming weeks. The 8th Pay Commission may also prompt some changes in the salary structure of government employees. Meanwhile, performance-based pay hikes reportedly remain under deliberation and may also be introduced.

This article has been updated to add new information.