Dearness Allowance hiked by 5-8% under 5th and 6th Pay Commissions: How will salaries increase?

The central government has increased the Dearness Allowance (DA) for employees who continue to draw their pay as per the 5th and 6th Central Pay Commissions.

The rate of DA for employees, who are continuing to draw their pay in the pre-revised pay scale/Grade Pay as per the 5th Central Pay Commission (CPC), has been increased from the existing rate of 466% to 474% of Basic Pay with effect from July 1, 2025, the Ministry of Finance said in a release on October 6, 2025.

Further, the DA rate for employees who are still drawing salary under the pre-revised pay scale/Grade Pay of the 6th CPC has been increased to 257% from 252% with effect from July 1, the finance ministry said in a separate release on October 6.

How does this affect the salary of employees?

Dearness Allowance (DA) is the extra money that employees and pensioners get to offset the impact of inflation on their salaries. As some employees are still being paid according to the older pay structure, like the 6th and 5th CPC, the hiked DA will help them cope with rising prices of goods and services.

Let’s say a central government employee’s basic pay is ₹18,000 per month and is drawing his/her salary in the pre-revised pay scale as per the 5th CPC:

• Earlier, the DA rate was 466%, so the DA of the employee was:

₹18,000 × 466% = ₹83,880

• Now, after the latest revision, the DA has been increased to 474%:

₹18,000 × 474% = ₹85,320

This means that his/her DA has increased by ₹1,440 per month, making it a considerable rise.

Similarly, for a central government employee with a basic pay of ₹50,000 per month who draws his/her salary in the pre-revised pay scale as per the 6th CPC:

• Earlier, at a DA rate of 252%, his/her DA was:

₹50,000 × 252% = ₹1,26,000

• After the hike, the DA is now 257%:

₹50,000 × 257% = ₹1,28,500

This means his/her DA will increase by ₹2,500 per month.

The Union Government revises DA twice every year, in January and July. While the revised DA was announced in October, it will apply retrospectively. This means that the difference between the pre-revised and revised DA will be paid as arrears, as the hiked DA will come into effect from July 1.

Notably, dearness allowance varies from employee to employee on the basis of factors like basic pay, employment sector and job location, among other things.