8th Pay Commission Salary Calculation Formula: When the 7th Pay Commission recommended a fitment factor of 2.57, the minimum basic salary increased from ₹7,000 to ₹18,000 (7,000 x 2.57) in 2016. Now, let's understand the 8th Pay Commission's calculations.

8th Pay Commission: How much will the salaries of government employees increase? Here's a calculation and explanation.

8th Pay Commission Salary Calculator: Nearly 5 million government employees and 6.5 million pensioners across the country are awaiting the 8th Pay Commission. Various speculations are circulating regarding the salary increase (8th Pay Commission Salary Hike News) of government employees under the 8th Pay Commission. The fitment factor for salary and pension calculations (8th Pay Commission Salary) is also being widely discussed. Government employees are expecting a significant increase. Brokerage firms and other experts have expressed their expectations regarding the potential fitment factor and the resulting salary increases. According to a research report released a few months ago by Ambit Capital and Kotak Institutional Equities, the effective salary increase could range from 13% to 34%. Let's understand the complete calculation.

What can be the fitment factor?

Ambit Capital recently released a report stating that the fitment factor for salary revisions can range from 1.83 to 2.46. Salary and pension calculations are based on this. Salary increases can range from 14% to 54% depending on the circumstances.

1. Base Case: If the fitment factor is kept at 1.83, then the salary can increase by 14%.
2. Median Case: If the fitment factor is kept at 2.15, then the salary can increase by 34%.
3. Upper Case: If the Commission recommends keeping the fitment factor at 2.46, then the salary can increase by up to 54%.

Also understand the calculation of salary increase

If the fitment factor is 1.8, it means that the existing basic salary will be multiplied by 1.8. However, the effective salary increase is lower because the dearness allowance (DA) also becomes zero upon implementation of the new pay commission. However, the government has clarified that DA will not be merged into the basic salary.

When the 7th Pay Commission recommended a fitment factor of 2.57, the minimum basic salary increased from ₹7,000 to ₹18,000 (7,000 x 2.57) in 2016. The dearness allowance was zero at that time, so the actual salary increase was very small. Consider this example:

Minimum Wage under 6th Pay Commission

7,000 (Basic Pay) + 8,750 (DA) + 2,100 (HRA) + 1,350 (TA) = Rs 19,200.

Minimum Wage under 7th Pay Commission

18,000 (Basic Pay) + 4,320 (HRA) + 1,350 (TA) + 0 (DA) = Rs 23,670.

This is how it was revised in 2016. Thus, nine years ago, after the implementation of the 7th Pay Commission, the minimum wage saw an effective increase of 14.3% from Rs 19,200 to Rs 23,670.

If the salary is 50 thousand then how much will it increase?

Here we are doing the calculation for a government employee whose current basic salary is around Rs 50,000.

• Basic Pay: Rs 50,000
• HRA (at 24%): Rs 12,000
• TA: Rs 2,160
• DA (at 55%): Rs 27,500
• Total Salary: Rs 91,660

(It is worth noting that DA is calculated at 55%)

If the fitment factor is 1.82, what will be the salary?  

• New basic pay (50,000 x 1.82) = Rs 91,000
• New HRA (91,000 x 24%) = Rs 21,840
• TA = Rs 2,160
• New Total Salary: Rs 1,15,000 (approx. 25.46% increase)

If the fitment factor is 2.15, how much will the salary increase?

New Basic Pay (50,000 x 2.15) = Rs 1,07,500
New HRA (1,07,500 x 24%) = Rs 25,800
New TA = Rs 2,160
New Total Salary: Rs 1,35,460 (approx. 47.78% increase)

Also understand the calculation of different basic salaries.

 Most importantly, the government or the 8th Pay Commission must note that the calculations provided above are based on estimates. The 8th Pay Commission, constituted by the central government, will recommend the actual fitment factor after discussions and reviews with all stakeholders.  

PC: NDTV India