7th vs 8th Pay Commission: Key salary, allowance, pension and incentive changes explained

The new pay commission is being put in place ahead of the conclusion of the current 7th Pay Commission, which ends in December 2025.

Since 1947, the government has constituted seven pay commissions. The pay commission plays a key role in deciding salary structures, benefits and allowances for government employees. Most state-owned organisations follow the commission’s recommendations. 

Here are some of the key differences between the 7th and 8th Pay Commissions.

7th Pay Commission: Key highlights

The 7th Pay Commission was formed in 2014, and its recommendations were implemented from January 1, 2016. It introduced several changes. They were:

• Allowances: The 7th Pay Commission introduced revisions to key allowances such as Dearness Allowance (DA), House Rent Allowance (HRA), and Transport Allowance (TA). These allocations were determined after taking into account the prevailing economic conditions and inflationary trends.
• Pension: Minimum pension increased from ₹3,500 to ₹9,000 per month.
• Pay structure: The 7th Pay Commission introduced a simplified 19-level pay matrix to enhance transparency in the pay structure. It was like a single chart that showed salaries for all central government employees.

8th Pay Commission: What to expect 

Announced by the Union Electronics and IT Minister Ashwini Vaishnaw, the 8th Pay Commission will likely be formed by January 2026. Key expectations include:

Over 49 lakh Central government employees and nearly 65 lakh pensioners will benefit from the implementation of the 8th Pay Commission.