Historic jump in the salary of Level-4 employees in the Eighth Pay Commission

The murmur among central employees and pensioners regarding the formation of the 8th Central Pay Commission and possible salary increase is continuously increasing. According to the tradition of Pay Commission being implemented every ten years, the year 2026 is being considered very important from the point of view of restructuring the pay structure of central employees. Under the pay matrix of the Seventh Pay Commission (7th CPC), the employees who have reached the last stage of their service i.e. Stage 40 in Pay Level 4, may see a direct jump of about 30.15 percent in their salary after the implementation of the Eighth Pay Commission. After inclusion of new pay formula, fitment factor, adjustment of Dearness Allowance (DA), Enhanced House Rent Allowance (HRA) and Transport Allowance (TPTA), the total gross salary of senior employees working at Level-4, Stage 40 is estimated to increase to ₹ 1,92,710 per month.

To understand this huge salary increase, it is first necessary to analyze the current structure of Level-4 under the Seventh Pay Commission. Level-4 (Grade Pay ₹2,400) in the 7th CPC pay matrix starts with Basic Pay ₹25,500 (Stage 1). This stage progresses along with getting an annual increment of 3 percent every year. The current basic salary of employees who have reached Stage 40 after decades of continuous service is ₹81,100 per month.

At present, by adding 53% to 54% Dearness Allowance (DA) under 7th CPC, 30% HRA for ‘X’ category metros and Prescribed Transport Allowance (TPTA) for Level-4, the current gross salary of these employees comes to around ₹ 1.48 lakh per month.

The main basis for salary increase under the Pay Commission is ‘Fitment Factor’. A fitment factor of 2.57 was implemented in the Seventh Pay Commission, in which the new basic was decided by including the then existing dearness allowance. Experts and employee organizations are demanding a minimum fitment factor of 1.92 to 2.86 for the 8th Pay Commission.

Based on a potentially realistic fitment factor of 1.92 and a balanced model of 50%+ DA merger:

• Current 7th CPC Basic Pay (Stage 40): ₹81,100

• Proposed Fitment Multiplier: 1.92 (approximately)

• New revised basic pay in 8th Pay Commission: About ₹1,26,000 per month

Thus, only the basic basic salary of the employees will directly increase by more than ₹ 44,900, which will directly strengthen the future Provident Fund (PF), gratuity and pension calculations.

Whenever a new pay commission comes into effect, the existing dearness allowance is reduced to zero or it is started afresh by a minimum of 3 to 6 percent, but all other allowances are also fixed at the revised basic pay. The probable monthly salary breakup for Level-4 Stage 40 based on ‘X’ Class City (e.g. Delhi, Mumbai etc.) is as follows:

According to this calculation, there will be a huge net profit of ₹ 44,642 per month directly in the monthly income of the employees as compared to the current ₹ 1.48 lakh, which represents an actual gross increase of 30.15% in percentage terms.

Level-4 is considered a very important operational cadre in Central Ministries, Defense Establishments, Department of Posts and Railways. Major positions covered under this pay level include:

• Upper Division Clerk (UDC)/Senior Secretariat Assistant (SSA) in Central Secretariat and Ministries

• Senior Train Clerk, Ticket Checker (TTE Entry Level), and Senior Technical Staff in Railways

• Postal Assistant and Sorting Assistant in the Department of Posts (India Post)

• Head Constable and ASI rank personnel in Central Paramilitary Forces (CRPF, BSF, CISF etc.)

• Senior Draftsmen and Lab Assistants of various technical laboratories and ordnance depots.

For the employees who have been working in these cadres for many decades and have reached stage 40 by taking continuous annual increments in the same cadre due to limited opportunities for promotion, this salary increase will prove to be the biggest financial support of their lifetime.

The most pleasing aspect of this salary increase is that employees who have reached Stage 40 are generally closer to their retirement. Under Central rules, pension is calculated at 50 percent of the last drawn basic pay of the employee.

• Jump in pension: With the basic increasing from ₹81,100 to ₹1,26,000, the basic monthly pension will directly increase from ₹40,550 to ₹63,000 per month.

• Gratuity and Leave Encashment: Based on the revised basic in the 8th Pay Commission, the payment of retirement gratuity and 300 days leave encashment will be several lakh rupees more. The maximum limit of gratuity has recently been increased from ₹20 lakh to ₹25 lakh by the Central Government, the full benefit of which will be available to the employees retiring after this pay revision.

As per the rules, the 10-year recommendations of the 7th Pay Commission are expiring on 31 December 2025, due to which the implementation of the 8th Pay Commission is considered to be due from 1 January 2026. However, after the formation of the commission, it usually takes 12 to 18 months to prepare the report and submit recommendations. Employee unions (like NC-JCM) have urged the government to immediately constitute a commission. Even if it takes time till the end of 2026 or 2027 for the recommendations of the Commission to be accepted, as per tradition, the central employees will be paid a lump sum amount in the form of arrears from January 1, 2026, which is sure to bring a financial boost in the pockets of the employees.