DA hike update: Central Govt employees to get lowest pay hike under 8th Pay Commission, likely to rise from 58% to...

DA hike update: After constituting the 8th Pay Commission and clearing its Terms of Reference (ToR), the central government will raise the Dearness Allowance (DA) and Dearness Relief (DR) amount only slightly. The DA and DR which the current employees and pensioners are due to receive from January 1, 2026, will likely be raised only 2 percent, increasing the current 58% to around 60%. Now, the question around DA hike is that if it will continue with the same percentage or will be on hold until the central pay commission is introduced.  

How much will DA hike under the 8th Pay Commission? 

As per the new percentage points, the latest DA hike would be the lowest in more than seven years, last seen in January this year. When the 8th Pay Commission is implemented, the DA at that point will be merged into basic pay, as per the norm, and will be calculated from zero. DA is calculated as a percentage of basic pay and is revised twice a year, once in January and then in July.  

This means that the next DA hikes, in the 2026 and 2027 cycles, will be the deciding factor for the revised basic pay in the new pay matrix. Even a small percentage of hike it will significantly impact the pay structure.   

In the 8th Pay Commission, DA will be calculated in the same way. After its implementation, the existing DA will be merged into the revised basic pay, revising the entire salary structure of employees and pensioners, allowances, and retirement benefits. 

When will the 8th Central Pay Commission come into effect? 

The government has not clearly stated its implementation date while the commission has been given 18 months to submit its report. After submission, it usually takes around two years to be studied and approved after which the new pay scales are implemented. 

According to this process, employees may expect 8th Pay Commission pay hikes only by late 2027 or early 2028.