8th Pay Commission to Use New Methodology; Old Salary Formulas to Be Replaced—Here’s What It Means for Employees

The Central Government has issued an important clarification regarding the 8th Pay Commission, putting an end to multiple claims circulating on social media. The government has confirmed in the Lok Sabha that the upcoming Pay Commission will not follow the old calculation formulas or frameworks. Instead, the panel will design its recommendations using an entirely new methodology, giving it complete independence while reviewing salary structures, allowances and pension rules.

According to Minister of State for Finance Pankaj Chaudhary, all decisions—including the structure of pay hikes and allowances—will be finalized solely by the Commission. The government has also highlighted that it may take around 18 months for the report to be completed, meaning employees should wait for the official document instead of relying on unverified reports.

What the Government Said in Parliament

Responding to questions in the Lok Sabha, the Finance Minister said the 8th Pay Commission will set its own procedures and evaluation techniques. This means the panel is free to rewrite salary structures, recommend new allowance models, and revisit pension frameworks using fresh logic and modern parameters.

Importantly, the government has not directed the Commission to rely on any previous pay commission model. This confirms that a new approach will replace older systems, many of which were last updated during the 7th Pay Commission.

Key Demands Submitted by Employee Associations

Government employee unions and pensioners’ groups have raised several long-standing demands, including:

• Merging DA (Dearness Allowance) with Basic Pay

• Increasing the fitment factor to boost minimum salaries

• A uniform pension formula for retirees

• Early implementation of revised pay scales

• Reworking allowances and special compensations

However, based on the government’s statement, all these proposals will be considered only within the Commission’s internal process, not outside it. No demand has been approved or rejected at this stage.

Why a New Methodology Is Being Adopted

Every Pay Commission has made structural changes. For example:

• The 7th Pay Commission replaced the pay band system with a simplified Pay Matrix.

• Allowances were reorganized with new categories and revised rates.

In the same way, the 8th Pay Commission is expected to modernize the system further. The shift to a new methodology suggests an effort to bring salaries and pensions in line with the current economic environment and workforce needs.

Why Social Media Claims May Not Be Reliable

Over the past few months, social media has been filled with claims about:

• Exact salary hikes

• The proposed fitment factor

• Expected minimum pay

• Allowance restructuring

But the government has clarified that no formula, number or structure has been finalized yet. Since the Commission is developing its methodology independently, any figures currently circulating online are pure speculation.

Employees are advised to wait for official updates rather than relying on unofficial predictions.

When Will the Report Be Ready?

As per current estimates, the 8th Pay Commission will take about 18 months to complete its report. If the timeline stays on track, the recommendations may be ready sometime in 2026. Salary, allowances, and pension revisions will be implemented only after the report is reviewed and approved by the government.

What Employees and Pensioners Should Keep in Mind

For now, government employees and pensioners should note that:

• All decisions will be made by the Commission, not through public speculation.

• No salary hike, fitment factor, or allowance change can be confirmed until the report is submitted.

• Official updates will come only from government announcements or Commission notifications.

The overall message from the government is clear: Wait for the official report, as new rules and a new methodology are still being framed.