8th Pay Commission: Pay Band, Grade Pay, Fitment, Level to Index; key terms to know before 8th CPC

3 min read | Updated on June 06, 2025, 08:50 IST

SUMMARY

It is expected that the 8th Pay Commission may revise key terms like Pay Matrix, fitment factor, minimum basic pay etc. In the lead-up to the 8th CPC, understanding these terms will help employees interpret the recommendations of the 8th CPC.

Knowing key terms will help in understanding the recommendations. | Image source: Shutterstock

Understanding the salary structure of Government employees is difficult for many due to the usage of complex terms such as grade pay, pay band, fitment factor, pay level, etc.

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As the excitement grows around the constitution of the 8th Central Pay Commission (CPC), we take a look at some of the key salary-related terms that may find a lot of mention in the new panel's report.

Pay Band: Pay bands were recommended by the 6th Pay Commission and removed by the 7th Pay Commission. A pay band is a range of basic salaries for a group of posts. Each pay band covers multiple grades and posts, and an employee moves through the band based on their seniority and promotion.

Fitment factor: It is a multiplier applied to the existing basic pay to arrive at the revised pay under a new pay commission. For example, the fitment factor under the 7th Pay Commission was 2.57.

Grade Pay (GP): It is an additional salary component introduced by the 6th CPC. Grade Pay reflects the hierarchy and responsibility of a post. It is added to the basic pay to determine the total salary. The 7th CPC replaced the Grade Pay with Pay Matrix, but it is relevant for employees still receiving their salaries under the 6th CPC.

Pay Matrix Level: The 7th CPC introduced the Pay Matrix, which is a single chart showing all pay levels for Central Government employees. The Pay Matrix subsumed the Grade Pay. Each row in the 7th CPC's Pay Matrix represents a Pay Level, which corresponds to a specific post or grade. Due to annual increments, employees move horizontally in the pay matrix. However, employees move vertically in the table due to promotions.

Index: The index in the pay matrix refers to the position or cell within a Pay Level in the Pay Matrix. Each level has several indices, representing incremental stages of pay progression within that level. Annual increments enable employees to move to higher indices. The 7th CPC had introduced the index of rationalisation for enhancing levels from Pay Band 1 to 2 to 3, and onwards on the premise that role, responsibility, and accountability increase at each step in the hierarchy.

Entry Pay (EP): It is the starting basic pay for a new employee in a specific post or pay level. Entry pay is the maximum pay an employee receives upon joining at a specific level defined in the Pay Matrix.

It is expected that the 8th CPC may revise key terms like Pay Matrix, fitment factor, minimum basic pay etc. In the lead-up to the 8th CPC, understanding the above terms will help employees interpret the recommendations of the 8th CPC.