8th Pay Commission TOR Released: Union Cabinet Approves Terms of Reference 28 Oct 2025 | Download PDF

NEW DELHI, October 28, 2025: The Union Cabinet, chaired by Prime Minister Shri Narendra Modi, has approved the Terms of Reference (TOR) for the 8th Central Pay Commission (8th CPC) today. This marks a significant milestone for millions of central government employees and pensioners across India.

The 8th Central Pay Commission will be a temporary body comprising one Chairperson, one Member (Part Time) and one Member-Secretary. The Commission will make its recommendations within 18 months of the date of its constitution, with the effect of recommendations expected from January 1, 2026.

The approval of the 8th Pay Commission TOR comes exactly 10 years after the implementation of the 7th Pay Commission in 2016, following the established pattern of reviewing government compensation every decade. The 8th Pay Commission Terms of Reference PDF is now available for download from the Department of Expenditure (doe.gov.in) and Press Information Bureau (pib.gov.in).

Background: Central Pay Commission History

Central Pay Commissions are periodically constituted to examine various issues of emoluments structure, retirement benefits and other service conditions of Central Government employees. The Government had announced formation of the 8th Central Pay Commission in January 2025 to examine and recommend changes in salaries and other benefits of Central Government employees.

Going by the established trend, the recommendations of pay commissions are usually implemented after a gap of every ten years. This ensures systematic review of compensation structures while maintaining fiscal stability.

Commission Structure & Timeline

The 8th Central Pay Commission will submit its recommendations within 18 months of constitution. The Commission may consider sending interim reports on any matters as and when the recommendations are finalized. This allows for phased implementation and timely benefit to employees.

Government employees can now officially download the 8th CPC notification through the Department of Expenditure website (doe.gov.in) and the Press Information Bureau (pib.gov.in). The official 8th CPC notification download has been made available in both English and Hindi for widespread accessibility.

What is TOR (Terms of Reference)?

The Terms of Reference document outlines the scope, objectives, and guidelines for the Pay Commission's work. It essentially defines what the commission will examine, recommend, and implement. The 8th Pay Commission TOR specifies the mandate to review and revise:

• Basic pay scales and grade pay structures
• Various allowances including DA, HRA, and Transport Allowance
• Pension benefits for retirees
• Fitment factor to convert 7th CPC pay to 8th CPC

Key Highlights of the 8th Pay Commission TOR

The 8th Pay Commission is expected to bring comprehensive changes to the compensation structure of central government employees. Based on the approved TOR, here are the key highlights:

• TOR Approval Date: October 28, 2025 by Union Cabinet
• Constitution Timeline: Commission expected to be constituted in early 2026
• Implementation: Likely from 2027 onwards with government review process
• Retrospective Effect: Implementation from January 1, 2026 (expected)
• Coverage: All central government employees and pensioners across all ministries and departments
• Review Period: Will review compensation for next 10 years (2026-2036)

The 8th Pay Commission notification has been eagerly awaited since 2024, with several employee unions and associations submitting representations to the government requesting early constitution of the commission. The October 28, 2025 approval finally provides clarity on the timeline and scope of the review process.

Commission Mandate: Key Factors in Making Recommendations

While making the recommendations, the 8th Central Pay Commission will keep in view the following key factors:

• Economic Conditions: The economic conditions in the country and the need for fiscal prudence
• Resource Availability: The need to ensure that adequate resources are available for developmental expenditure and welfare measures
• Pension Schemes: The unfunded cost of non-contributory pension schemes
• State Government Impact: The likely impact of the recommendations on the finances of State Governments which usually adopt the recommendations with some modifications
• Market Comparison: The prevailing emolument structure, benefits and working conditions available to employees of Central Public Sector Undertakings and private sector

What the Commission Will Review

According to the released 8th Pay Commission Terms of Reference PDF, the commission will have a comprehensive mandate covering multiple aspects of government employee compensation:

• Pay Structure Revision: Complete review and revision of basic pay scales, grade pay structures, and pay bands
• Allowances: Review of all allowances including Dearness Allowance (DA), House Rent Allowance (HRA), Transport Allowance, City Compensatory Allowance, and special allowances
• Pension & Retirement Benefits: Comprehensive review of pension calculations, gratuity, leave encashment, and other retirement benefits
• Fitment Factor: Determination of the multiplication factor to convert 7th CPC pay to 8th CPC pay scales
• Service Conditions: Review of service conditions including promotional opportunities and career progression
• Medical Benefits: Evaluation and enhancement of medical facilities and coverage for employees and pensioners
• Arrears Calculation: Framework for calculating and disbursing arrears upon implementation

Expected Pay Hike & Fitment Factor

Based on historical trends and economic analysis, the expected fitment factor for converting 7th CPC to 8th CPC ranges between 2.0 to 2.86 times the current basic pay. This would result in significant salary increases across all pay levels:

7th CPC Basic Pay	Fitment Factor (2.5x)	8th CPC Basic Pay	Expected Increase
₹25,000	2.5x	₹62,500	₹37,500
₹50,000	2.5x	₹1,25,000	₹75,000
₹1,00,000	2.5x	₹2,50,000	₹1,50,000

8th Pay Commission Implementation Timeline

The implementation timeline for the 8th Pay Commission follows this expected sequence based on historical patterns from previous pay commissions:

1. October 2025: Union Cabinet approves TOR for 8th Pay Commission
2. Early 2026: Commission constitution with chairman and members appointment
3. 2026-2027: Detailed study, data collection, stakeholder consultations and drafting recommendations
4. 2027: Submission of final recommendations to government
5. Mid-2027: Government review, cabinet approval and notification
6. Late 2027 onwards: Implementation with retrospective effect from January 1, 2026
7. 2028: Arrears disbursement and final settlement

The timeline is consistent with the 7th Pay Commission which took approximately 18 months from constitution to implementation. However, the actual timeline may vary depending on the complexity of recommendations and government review process.

Impact on Different Employee Categories

The 8th Pay Commission TOR approval has significant implications across various categories of government employees:

Central Government Employees

All central government employees, whether working in ministries, attached offices, subordinate offices, autonomous bodies, or constitutional bodies, will be covered under the 8th Pay Commission recommendations. This includes employees in administrative services, defense services, postal services, railways, and other sectors.

Defense Personnel

Defense personnel including Army, Navy, and Air Force officers and personnel will benefit from the pay commission recommendations. The TOR typically includes provisions for defense-specific allowances and benefits.

Pensioners

Existing pensioners and family pensioners will also receive benefits from the 8th Pay Commission through revised pension calculations based on the new pay matrix and fitment factor.

PSU Employees

While the 8th Pay Commission primarily focuses on central government employees, its recommendations often influence pay revisions in Public Sector Undertakings (PSUs) as well.

Comparison with Previous Pay Commissions

Understanding historical patterns helps predict what to expect from the 8th Pay Commission:

7th Pay Commission (Implemented 2016)

• Fitment Factor: 2.57x
• Average Pay Hike: 23.55%
• Minimum Basic Pay: ₹18,000 (increased from ₹7,000)
• Maximum Basic Pay: ₹2,50,000 (increased from ₹90,000)
• DA Reset: Yes, to 0%

Expected 8th Pay Commission

• Expected Fitment Factor: 2.0x to 2.86x (most likely 2.25x to 2.5x)
• Expected Average Pay Hike: 25-35%
• Minimum Basic Pay: Likely ₹41,400 to ₹51,450 (if 2.3x) or ₹45,000 to ₹56,300 (if 2.5x)
• DA Reset: Yes, expected to reset to 0%

Financial Impact and Government Expenditure

The implementation of the 8th Pay Commission will have significant fiscal implications for the government:

• The total financial impact is estimated to be substantial, given that approximately 4.8 million central government employees and 6.5 million pensioners will be covered
• The government will need to allocate budgetary resources for salary increases and arrears payment
• State governments may also feel the impact as they often follow central pay commission patterns for their employees
• The economic stimulus from increased government spending could have positive multiplier effects on the economy

What's Next for Employees

Government employees should stay informed about the developments and understand the potential impact on their finances:

• Calculate your expected salary using our 8th Pay Commission Calculator
• Keep track of official notifications from DoE (Department of Expenditure)
• Monitor inflation trends and DA revisions
• Plan your financial commitments based on expected increases
• Stay updated with our government news portal for latest updates

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