Are central government employees going to receive 8th Pay Commission (8 th CPC) arrears for allowances like house rent allowance, dearness allowance (DA), and transport allowance (TPTA), or will it be just on their salary?
With the 8 th Pay Commission consulting with various stakeholders to finalise its recommendations, many central government employees are eagerly awaiting the report’s implementation, trying to figure out which of their payouts will rise- salary or other allowances as well.
Once the central cabinet approves the 8 th CPC report and the government notifies its rules, employees can expect a boost in their payouts. They are expected to get arrears from January 1, 2026, since the 7 th CPC tenure ended in December 2025.
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With the 8 th Pay Commission’s report submission deadline set for May 2027, and the rule notification taking another 3-6 months, central government employees might end up receiving 20-24 months of arrears. But the big question is which arrears will they actually get?
Will central government employees get arrears for HRA, TA, etc?
Financial expert Ramachandran Krishnamoorthy told ET Wealth Online that based on past pay commission practises-
• Dearness allowance (DA) arrears are paid as they are recalculated month-wise on the revised basic pay.
• HRA arrears are usually not paid as HRA is revised prospectively.
• Transport allowance arrears are generally not paid, since it is a fixed amount.
What he meant to say is that DA is calculated on the basis of the basic salary of an employee. Since the basic salary of an employee increases in a new pay commission, the amount of DA also increases automatically.
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As far as HRA is concerned, it’s also based on the basic salary of an employee. The current HRA rates are 10% (Z-category cities), 20% (Y-category cities) and 30% (X-category cities) of the basic pay. These rates used to be 8%, 16% and 24% and were increased after DA reached 50%. The current DA rate is 60%.
Likewise, transport allowance is also based on the basic salary of an employee and the city of transport. For the 7 th Pay Commission, the TPTA range for central government employees is Rs 1,350-Rs 7,200. TPTA also increased by 25% when DA reached 50%.
TPTA rates are also revised by a pay commission.
When HRA and TPTA rates are revised in a new pay commission, central employees get them as per new rates, but they won’t get arrears for these allowances as per the past practices.
“Employees should not expect arrears on fixed or policy-driven allowances unless explicitly notified,” says Krishnamoorthy.
For how many months, can central government employees get arrears?
In November 2025, the 8 th Pay Commission was given 18 months to submit its report. It means it has time till May 2027 to submit the report unless it asks for an extension of the deadline from the Centre.
Once the report is ready, a group of ministers will study it and provide inputs. After that, the cabinet will approve the final draft of the 8 th Pay Commission report. If this process takes another 3-6 months, the implementation date may be in the second half of 2027. That means central government employees may get arrears for 20-24 months.
How are arrears for central government employees calculated?
Arrears can be calculated as:
Monthly pay difference (between 8 th and 7 th CPC basic pays)× number of delayed months
The revised pay is derived by applying the approved fitment factor to the existing 7th CPC basic pay. A fitment factor is a multiplier of the salary and pension. A 2.0 fitment factor means the basic salary of an employee will be doubled in a new pay commission.
Examples of arrears for Level 6 employee at 2.0, 2.15 and 2.28 and 2.57 fitment factors
A Level 6 employee’s minimum basic salary in the 7 th Pay Commission is Rs 35,400
Level 6 employee’s estimated revised salary as per 2, 2.15, 2.28 and 2.57 fitment factors
| Current basic pay (L6) | ₹ 35,400 |
| Revised pay at 2.0 fitment factor | ₹ 70,800 |
| Revised pay at 2.15 fitment factor | ₹ 76,110 |
| Revised pay at 2.28 fitment factor | ₹ 80,712 |
| Revised pay at 2.57 fitment factor | ₹ 90,978 |
Monthly increase for Level 6 employee at 2.0, 2.15, 2.28 and 2.57 fitment factors
| Fitment factors | Monthly increase for L6 employee with Rs 35,400 basic pay |
| 2 | ₹ 35,400 |
| 2.15 | ₹ 40,710 |
| 2.28 | ₹ 45,312 |
| 2.57 | ₹ 55,578 |
Level 6 employee’s estimated arrears as per 2, 2.15, 2.28 and 2.57 fitment factors (for 20 months)
| Fitment factor | Arrear estimates for L6 employee with Rs 35,600 current basic pay |
| 2 | ₹ 7,08,000 |
| 2.15 | ₹ 8,14,200 |
| 2.28 | ₹ 9,06,240 |
| 2.57 | ₹ 11,11,560 |
However, the real magnitude of the arrears will be known only when the 8 th Pay Commission decides on the fitment factor and the government notifies the rules of the new pay commission.
