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These days, the biggest discussion among lakhs of central government employees and pensioners is about the 8th Pay Commission. There is only one question in everyone’s mind that how much will their salary increase? In fact, discussions are going on in the corridors of the government regarding the formation of a new pay commission and its recommendations. But do you know that the biggest role behind this increase in your salary is ‘fitment factor’?

For government employees, fitment factor is the ‘magic figure’ or multiplier on the basis of which their basic salary and pension are determined. It is believed that while deciding the fitment factor, the 8th Pay Commission will closely examine many aspects like the current inflation data, basic needs of the employees and the condition of the government treasury.

After all, what is this fitment factor and why is it so important?

If understood in simple language, the fitment factor is the multiplier which will be used to calculate the new basic salary while shifting from the Seventh Pay Commission to the Eighth Pay Commission. This is not just a number, but it decides how many thousand rupees the difference will be in your take-home salary.

If we look at the history, during the 7th Pay Commission implemented in the year 2016, the government had used a fitment factor of 2.57. This did not mean that the salary directly increased by two and a half times, but it was added to the basic salary of that time, bringing the minimum salary to ₹ 18,000. In fact, the actual increase in the total salary of employees at that time was around 14.3%.

Mathematics of Fitment Factor: Understand 3 possible situations

No official announcement has been made yet regarding the 8th Pay Commission, but there is intense discussion among experts and employee organizations regarding some possible figures. At present there are three possibilities regarding what the fitment factor will be. Let us understand how the salary structure could look like on different fitment factors:

1. If fitment factor remains 2.57: In this situation there will be no revolutionary change in salary, rather it will be a normal adjustment with inflation. In this, the basic pay of a Level-1 (entry level) employee can be between ₹ 46,260 to ₹ 65,535. At the same time, the basic salary of Level-18 (Cabinet Secretary level) officers can go from ₹ 3.70 lakh to ₹ 6.42 lakh.

2. If fitment factor increases to 3: Employee organizations demand that it be increased. If the government fixes it at 3, then the basic salary of Level-1 can start from ₹ 54,000 and go up to ₹ 76,500. For middle level (level-10) officers, this figure is expected to be between ₹1.59 lakh to ₹2.36 lakh.

3. If fitment factor is made 3.68: This is the figure which has been demanded for a long time. If this happens, then the basic salary at the lower level (Level-1) will be between ₹ 58,500 to ₹ 94,900. At the same time, at the highest level (Level-18), this amount can cross ₹ 8 lakh.

Salary Structure: Not only basic pay, allowances also play a big role

The total salary of any government employee is not the basic pay which is decided only by the fitment factor. Actually, it includes many components like Dearness Allowance (DA), House Rent Allowance (HRA) and Transport Allowance (TA).

According to statistics, the share of basic pay in the total income of an employee is approximately 51.5%. Apart from this, about 30.9% is for Dearness Allowance (DA). House rent allowance i.e. HRA is around 15.4% and transport allowance is around 2.2%. Whenever a new pay commission comes, the base index is calculated again and the DA is reset to zero (0), due to which a big difference starts appearing in the net income of the employees.

Currently, many unconfirmed news and claims are being made on social media and internet regarding fitment factor. However, experts say that employees should wait for the official notification from the government before reaching any conclusion. Actually, what will be the fitment factor, it will completely depend on the recommendations of the Finance Ministry and the Commission.