There has been a lot of discussion regarding the 8th Pay Commission for the last several days. Recently the formation of 8th Pay Commission was approved. Since then people are waiting for increase in salary. Meanwhile, there is also a heated discussion going on about the ‘fitment factor’. So let us tell you what is fitment factor and how will it affect your salary.
What is ‘Fitment Factor’?
After the 8th Pay Commission, everyone’s focus is on ‘Fitment Factor’, because it is the basis for increase in salary and pension of Central Government employees and pensioners. Fitment factor is a multiplier that converts an employee’s old basic salary to the new salary.
Fitment Factor Formula:
There is a basic formula for fitment factor which decides your salary.
New Basic Salary = Existing Basic Salary × Fitment Factor
How does the formula work?
If the fitment factor increases, the salary, pension, increments and dues of the employees also increase.
For example, the 7th Pay Commission fixed the fitment factor at 2.57. Due to this, the minimum basic salary increased from ₹ 7,000 to ₹ 18,000. According to this formula:
7,000 × 2.57 = ₹18,000
Although this seems like a big increase, the Pay Commission is usually implemented once every 10 years.
Will there be fitment factor in 8th Pay Commission?
The fitment factor for 8th Pay Commission has not been decided yet. However, according to many reports, it will be between 2.28 and 3.83. Note that there was a lot of discussion on fitment factor during the 6th and 7th Pay Commission also. Earlier, various methods were used to increase salary, such as adding dearness allowances and changing the pay structure. In the first five Pay Commissions, there was no single formula for “fitment factor”. At that time, the entire pay structure was changed and the salary was increased.