8th Pay Commission: Fitment factor may be between 1.83 and 2.46, says report

3 min read | Updated on July 11, 2025, 12:40 IST

SUMMARY

8th pay commission salary hike latest news: The report estimates that the 8th Pay Commission may result in a minimum salary hike of 14% and a maximum of 54%.

A report projects minimum 14% hike in salaries. | Representational image source: Shutterstock

While the 8th Central Pay Commission (CPC) is yet to be set up, a report expects that the new pay panel will recommend a fitment factor between 1.83 and 2.46.

The prediction by Ambit Capital, a financial services firm, is based on the back-of-the-envelope calculations after taking the salary growth seen in previous pay commissions.

"As per back-of-the-envelope calculations, depending on the salary growth seen over different Pay Commissions, the range of fitment factors that the government could be looking at lies between 1.83 and 2.46," the firm said in a report.

How will the salaries increase?

The report estimates that the 8th Pay Commission may result in a minimum 14% real hike in pay (including Basic Pay+DA) and a maximum of 54%. However, the maximum 54% hike in real pay is highly unlikely as the Government could face significant financial challenges in implementing the same.

"While the government might consider a higher increase, potentially using it as a consumption stimulus, expecting a substantial 54% jump (as seen during the 6th Pay Commission) seems unlikely, since it could face significant financing challenges," the report said.

8th CPC may consider a 34% hike

The middle case scenario for real salary hikes is 34%, which the 8th CPC may be considering. However, a minimum 14% hike is likely to be considered in the worst case.

"Our estimates suggest hikes around 30-34% could be under consideration in the 8th Pay," the report said.

For fitment factor calculations, the report has assumed real income growth of 14.3% (worst case) and 54% (best case). The middle case fitment factor is just the average of the 2 fitment factors.

Historically, pay commissions have enabled real salary hikes of 14% to 54%.

How much will salaries increase?

The report has projected salary hikes in three fitment factor scenarios: 1.83, 2.15, and 2.46, assuming the current basic salary of an employee is ₹50,000.

Fitment factor 1.83: The employee's total salary will rise to ₹1,15,297 if the current basic salary is ₹50,000 and the fitment factor recommended by the 8th CPC is 1.82.
Fitment factor 2.15: The employee's total salary will rise to ₹1,36,203 if the current basic salary is ₹50,000 and the fitment factor recommended by the 8th CPC is 2.15.
Fitment factor 2.46: The employee's total salary will rise to ₹1,51,166 if the current basic salary is ₹50,000 and the fitment factor recommended by the 8th CPC is 2.46.

"Assuming a current basic pay of ₹50,000 and with Dearness Allowance (DA) projected to reach 60% by the end of 2025 (up from the current ~55% with one more likely increment), salaries are expected to increase by at least 14% under the 8th Pay Commission. This growth at about 14% represents the lowest threshold seen across the last four Pay Commissions (including the current one)," the report said.