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Good news for central government employees and pensioners! Every 10 years, the government forms a Pay Commission to review salaries, allowances and pensions, and now the 8th Pay Commission has been approved. But the question is, how will your salary increase in the 9th and 10th Pay Commission? How much money will you have in your pocket at the time of retirement? Come, let us understand its entire story in simple language.

Fitment Factor: Magic formula for salary increase

The most important part of the pay commission is the fitment factor. This decides how much your salary will increase. In simple words, fitment factor is the way of converting your existing basic salary to the new salary. In the Seventh Pay Commission it was 2.57. That is, if your basic salary was Rs 10,000, it became Rs 25,700.

How much will the salary increase in the 8th Pay Commission?

The fitment factor in the 8th Pay Commission is expected to be between 2.57 to 2.86. If it becomes 2.86, then there can be a significant increase of 20 to 25% in the salary of the employees. For example, if your basic salary is Rs 18,000, it can reach Rs 51,480 if 2.86 fitment factor is applied. That means, more money in your pocket every month!

Perks that will make take-home salary more attractive

After the new basic salary is decided, allowances are calculated, which further increase your take-home salary. These include:

• Dearness Allowance (DA):It increases according to inflation.
• House Rent Allowance (HRA): Depending on the city, this is a major part of your salary.
• transport allowance: Covers your traveling expenses.

By adding all these allowances, your total salary increases tremendously. After every pay commission, there is a big jump in take-home salary.

9th and 10th Pay Commission: What will happen in the future?

The same formula of fitment factor will work in the 9th and 10th Pay Commission also. This is beneficial not only for working employees but also for pensioners. Pensioners receive Dearness Relief (DR), which, like Dearness Allowance, increases regularly to keep inflation in check. Additionally, when DA reaches 50%, gratuity and certain allowances automatically increase by 25%. That means, your pockets will remain heavy even after retirement!

Gratuity bonus in retirement

Pay Commission recommendations not only increase salaries but also strengthen retirement benefits. Gratuity is a major part of your retirement, which becomes more attractive as DA increases. That means, even after the job, your financial position will remain strong.