8th Pay Commission: Expected Changes in HRA Rates and Salary Hike for Central Employees

Big Salary Boost Likely as 8th Pay Commission Prepares for Implementation from 2026

Central government employees could soon receive a significant salary hike, with the 8th Pay Commission expected to come into force from January 1, 2026. The current 7th Pay Commission will conclude on December 31, 2025, paving the way for the new structure. Key areas likely to witness changes include basic salary, dearness allowance (DA), fitment factor, and house rent allowance (HRA).

According to early estimates, employees could see a 30% to 50% salary increase, depending on the final fitment factor and HRA revision.

How Much Will Salary Increase Under the 8th Pay Commission?

One of the most critical factors in the upcoming pay commission will be the fitment factor, which directly determines the new basic salary. In the 7th Pay Commission, the fitment factor was fixed at 2.57, resulting in a sharp rise in basic pay from ₹7,000 to ₹18,000.

For the 8th Pay Commission, projections suggest the fitment factor could range between:

• 1.92

• 2.28

• 2.86

If the fitment factor is set at 2.86, the minimum basic salary could increase to ₹51,480. For example:

• Current Basic Pay: ₹18,000

• New Basic Pay (with 2.86 factor): ₹18,000 × 2.86 = ₹51,480

Even with a moderate 1.92 fitment factor, employees would see their salaries rise by 92%, increasing the basic pay from ₹18,000 to ₹34,560.

Will HRA Rates Be Revised in the 8th Pay Commission?

House Rent Allowance (HRA) has traditionally been revised with each Pay Commission:

• In the 6th Pay Commission, HRA rates were 30%, 20%, and 10% for X, Y, and Z cities respectively.

• In the 7th Pay Commission, these were revised to 24%, 16%, and 8%.

Following the precedent, it is expected that HRA rates will again be adjusted based on the new basic pay and DA structure in the 8th Pay Commission. Historically, when DA crosses 50%, HRA rates are restored to the 30%-20%-10% structure.

Example:

• Basic Salary: ₹30,000

• New Salary (with 1.92 fitment factor): ₹30,000 × 1.92 = ₹57,600

• HRA Calculations:

  • Type X city: ₹17,280

  • Type Y city: ₹11,520

  • Type Z city: ₹5,760

Thus, with the expected salary revisions, employees can anticipate a significant boost in HRA amounts as well.

Impact on Pensioners and Future Financial Planning

Besides active employees, central government pensioners will also benefit from these changes, as pension revisions are linked to basic salary adjustments. The anticipated increase in salaries and allowances under the 8th Pay Commission will substantially improve financial security for millions of families associated with government service.

Final recommendations and official figures will be announced once the 8th Pay Commission submits its report, expected in late 2025 or early 2026.