8th CPC Salary Calculator: What will happen to ‘Level Change’ of Stage-40 central employees? Know the complete mathematics of promotion, stagnation and big jump in salary.

There is immense curiosity among more than 48 lakh serving central employees and more than 68 lakh pensioners of the country regarding the 8th Central Pay Commission. Along with the formation of the Pay Commission and the possible fitment factor, the biggest discussion is being held about those senior employees who are in the last stage of their respective pay levels in the pay matrix of the 7th Pay Commission (7th CPC). Stage-40 (Cell-40) Have reached or are about to reach. The big question in the minds of many employees is whether their pay level will change automatically after the salary reaches the 40th stage? Will they automatically get promotion to the next level, or what will be the method of calculation of pay under the new pay matrix and MACP rules of the 8th Pay Commission?

In the structure of the 7th Pay Commission, the old system of pay-band and grade-pay was abolished and a unified ‘pay-matrix’ of 1 to 18 levels was prepared. In this matrix, most of the lower and middle levels (Level 1 to Level 10) have exactly 40 cells (index stages). After getting annual increment at the rate of 3% every year, an employee moves down to the lower cell. But when an employee reaches the last step of his level i.e. 40th cell, he has to face salary stagnation i.e. ‘Stagnation’. Let us understand what is the actual rule of level change for Stage-40 employees and how big a jump will be recorded in their basic salary and in-hand pay after the implementation of the 8th Pay Commission.

There is a common misconception in employee circles that as soon as an employee reaches the 40th stage of his level, his pay level will automatically change to the next higher level. This assumption is technically not entirely correct as per the official rules of the Department of Personnel and Training (DoPT) and 7th Pay Commission:

1. Automatic level change does not occur: The pay level of a post does not automatically change merely by reaching Cell-40. Change in pay level is possible only in two circumstances—first, when the employee receives formal departmental promotion (Regular Promotion), or second, when he becomes eligible for financial upgradation on 10, 20 or 30 years of service under the Modified Assured Career Progression (MACP) Scheme.

2. Law of Stagnation Increment: If an employee has reached Cell-40 and has not received promotion or MACP, he reaches the ‘maximum’ of that level. According to the old rules, there was a provision to give a stagnation increment to such employees every two years, but the annual increment stops.

3. Big relief expected from 8th Pay Commission: The biggest issue that the employee unions have raised before the 8th Pay Commission is that the limit of 40 cells in the pay matrix should be increased to 45 or 50 cells, or the employees stuck at the 40th stage for more than 2 years should be given a legal way to automatically ‘upgrade’ to the next pay level (Automatic Stage-to-Level Migration).

The figures for maximum basic pay (cell 40) from Level 1 to Level 10 in the pay matrix of the 7th Pay Commission show the pay that senior employees have reached at the top of their career:

• Level 1 (MTS/Group ‘D’ posts): Starting from as low as ₹18,000 ₹56,900 on Stage-40.

• Level 2 (LDC etc): Starting from as low as ₹19,900 ₹63,200 on Stage-40.

• Level 4 (UDC etc): Starting from as low as ₹25,500 ₹81,100 on Stage-40.

• Level 6 (Grade Pay ₹4200): Starting from as low as ₹35,400 ₹1,12,400 on Stage-40.

• Level 7 (ASO, Inspector, Grade Pay ₹4600): Starting from as low as ₹44,900 ₹1,42,400 on Stage-40.

• Level 10 (Group ‘A’ entry, GP ₹5400): Starting from as low as ₹56,100 ₹1,77,500 on Stage-40.

Thus, employees who have reached Cell-40 after decades of service are holding the highest basic pay of their level. When the new fitment factor will be implemented on these maximum basic pay in the 8th Pay Commission, then the biggest jump will be seen in their salary.

According to the historical tradition of pay commissions, in the new pay commission, the old basic salary is multiplied by a fixed ‘fitment factor’ to fit into the new pay matrix. A fitment factor of 2.57 was given in the 7th Pay Commission. Employees’ organizations are demanding a fitment factor of 2.86 for the 8th Pay Commission, while the estimates of economists and government analysts are believed to be between 1.92 to 2.28.

If we are realistic 1.92 fitment factor and proposed by unions 2.28 Fitment Factor If we consider this as the basis, then there will be a huge jump in the basic salary of stage-40 employees:

(Note: The new basic pay is rounded to the nearest multiple of ₹100 as per the pay matrix rules).

Whenever a new pay commission is implemented, the first step is to merge the existing Dearness Allowance (DA) with the basic pay and reset the DA again to 0%.

For example, if a Level 7 employee is currently working at Stage-40 (Basic ₹1,42,400):

• Current Status in 7th Pay Commission: By adding 60% DA on the basic of ₹ 1,42,400, the total pay comes to ₹ 2,27,840.

• Changes in 8th Pay Commission (at 1.92x fitment): go straight to his new basic ₹2,73,400 It will be done.

• Restructuring of Allowances: Even though DA will be 0% initially, the House Rent Allowance (HRA) which is 30% in ‘X’ class cities and 20% in ‘Y’ class cities, will now be calculated on this new hefty basic pay (₹2,73,400). Along with this, an increase of more than 1.6 times in Transport Allowance (TA) is also considered certain.

• Net take-home salary: Even after the NPS deduction (10% basic + DA), the monthly net in-hand salary will see a direct net increase from a minimum of ₹25,000 to ₹45,000 per month.

The biggest complaint of the employees who have reached stage 40 is that they do not get the actual benefit of increment after crossing the 40th stage. Employees unions of Railways, Postal Department, Defense Civilian and Central Secretariat Service (CSS) have put forward major demands in the terms of reference of the 8th Pay Commission:

1. Expansion of Cells: Increase the number of cells in all pay levels from 40 to at least 50 so that non-promoted employees with long service receive regular annual increments of 3% per annum.

2. MACP time interval reduction: Currently MACP benefits are available for 10, 20 and 30 years of service. The unions demand that it should be reduced to 8, 16 and 24 years so that the employees can shift to the next pay level before reaching the 40th stage.

3. Increase in the limit of gratuity and leave encashment: Due to increase in basic pay from 90% to 120%, there will be a historic increase in the amount of gratuity received on retirement and 300 days leave encashment.

Although reaching Stage-40 does not immediately change the official designation or level of an employee, Stage-40 employees are sure to get the biggest financial benefits once the new pay matrix of the 8th Pay Commission is implemented. Due to their accumulated service and highest basic pay, the new fitment factor will take their salary and pension to a level which till now only higher administrative officers were entitled to. Till the final recommendations of the Pay Commission are approved by the Cabinet, employees should keep their service records and Annual APAR (APAR) in order so that the benefits of the new matrix can be availed without any hindrance.