8th Pay Commission Buzz: When Will Employees Receive Arrears and Salary Hike?

India

oi-Gaurav Sharma

Central
government
staff
and
pensioners
are
preparing
for
a
pay
jump
under
the
8th
Pay
Commission
from
1
January
2026.
However,
experts
expect
the
actual
rollout
to
slip
beyond
that
date,
which
means
eligible
employees
and
pensioners
are
likely
to
receive
sizeable
arrears
for
the
delayed
months.

The
7th
Pay
Commission
is
scheduled
to
end
on
31
December
2025,
so
the
new
structure
formally
starts
from
1
January
2026.
Government
circulars
have
already
confirmed
the
effective
date,
but
the
practical
implementation,
including
fresh
salary
slips,
may
arrive
much
later
than
that
official
start.

8th
Pay
Commission
implementation
timeline
and
process

The
government
earlier
noted
that,
“Usually,
the
recommendations
of
the
pay
commissions
are
implemented
after
a
gap
of
every
ten
years.
Going
by
this
trend,
the
effect
of
the
8th
Central
Pay
Commission
recommendations
would
normally
be
expected
from
01.01.2026,” which
sets
the
reference
point
for
the
upcoming
changes.

Madan
Sabnavis,
Chief
Economist
at
Bank
of
Baroda,
expects
the
8th
Pay
Commission
to
turn
operational
in
FY2027-28
or
even
FY2028-29.
This
suggests
that,
although
salaries
will
be
revised
with
effect
from
1
January
2026,
employees
might
see
the
actual
benefit
on
their
payslips
only
after
a
notable
lag.

8th
Pay
Commission
approval,
report
and
expected
announcement

Rohit
Jain,
managing
partner
at
Singhania
&
Co.,
explained
the
official
schedule
around
the
exercise.
“The
Union
Cabinet
approved
the
formation
of
the
8th
Pay
Commission
and
its
Terms
of
Reference
(ToR)
in
early
to
mid-2025
(official
notifications
were
released
around
November
2025).
The
commission
is
typically
given
18
months
to
submit
its
detailed
report.
While
the
effective
date
of
the
hike
is
1
January
2026,
the
actual
final
announcement
of
the
new
salary
slabs
is
expected
in
late
2026
or
early
2027,” as
per
Jain.

Because
of
this
extended
timeline,
there
is
a
clear
gap
between
the
legal
effective
date
and
the
real-world
hike.
That
gap
creates
arrears,
which
are
back
payments
owed
to
staff
and
pensioners.
The
longer
the
delay
between
1
January
2026
and
implementation,
the
higher
the
cumulative
arrear
amount.

8th
Pay
Commission
arrears
calculation
and
payment
rules

Under
existing
rules,
all
central
government
employees
and
pensioners
will
receive
arrears
from
1
January
2026
until
the
month
the
8th
Pay
Commission
pay
structure
is
actually
applied.
For
instance,
if
the
revised
salaries
start
from
May
2027,
arrears
will
cover
January
2026
to
April
2027
for
each
eligible
person.

Jain
highlighted
the
backdating
impact,
stating,
“Since
the
commission
is
backdated
to
1
January
2026,
any
delay
in
the
announcement
means
employees
and
pensioners
will
receive
a
lump-sum
payment
of
arrears
for
the
intervening
months,” Jain
told
Livemint.
This
lump
sum
represents
the
difference
between
old
and
new
pay
for
every
affected
month.

The
arrears
are
not
limited
to
basic
pay.
According
to
Madan
Sabnavis,
the
Union
government
is
expected
to
allocate
a
specific
budget
provision
for
the
arrear
burden.
Once
sanctioned,
employees
and
pensioners
will
receive
arrears
on
the
full
revised
pay
package,
including
relevant
allowances,
rather
than
on
basic
salary
alone.

8th
Pay
Commission
arrears
example,
taxation
and
income
slabs

Consider
an
employee
whose
monthly
pay
rises
from
₹45,000
to
₹50,000
after
the
8th
Pay
Commission.
The
monthly
difference
is
₹5,000,
which
becomes
the
arrear
per
month.
If
the
hike
is
delayed
by
15
months,
the
total
arrear
will
be
₹5,000
×
15,
which
equals
₹75,000
for
that
period.

Sabnavis
also
clarified
the
tax
treatment
of
this
additional
income.
“This
arrear
is
taxable.
Most
government
employees
are
likely
to
be
placed
in
the
30%
income
tax
slab
after
the
salary
hike
due
to
the
8th
Pay
Commission
changes.
They
will
have
to
pay
income
tax
at
that
rate
for
the
arrears,” Sabnavis
told
Livemint.

Key
features
of
the
arrear
example
can
be
presented
as
follows:

Overall,
the
8th
Pay
Commission
takes
effect
from
1
January
2026,
but
delays
in
implementation
may
push
real
payouts
into
late
2026,
2027
or
beyond.
That
lag
will
create
large,
taxable
arrears
for
central
government
staff
and
pensioners,
with
many
likely
moving
into
the
30%
income
tax
bracket.