8th Pay Commission Latest Update: In the ongoing meetings of the 8th Pay Commission, employee unions have demanded major changes to this formula. The unions argue that in this era of rising inflation, children’s education, and medical expenses, the old formula has become ineffective. Understand the new formula and how significant its impact will be on your salary.
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8th Pay Commission New Formula: Significant news is emerging for central government employees and pensioners regarding the 8th Pay Commission. If you’re thinking that your salary will increase solely based on dearness allowance (DA) or the fitment factor under the new Pay Commission, you’re wrong. A secret formula is at work behind salary calculations, which could directly increase employees’ minimum basic salary to ₹69,000.
This formula is called the “Family Unit Formula.” In the ongoing meetings of the 8th Pay Commission, employee unions have demanded significant changes to this formula. The unions argue that the old formula has become ineffective in this era of rising inflation, children’s education, and medical expenses. Let’s explore this formula and how significant an impact it will have on your salary.
What are the “Family Unit Formula” and the “Ackroyd Formula”?
Whenever the Pay Commission sets the minimum salary for an employee, it considers the minimum amount a typical family needs for a respectable life, including food, clothing, and housing.
Aykroyd Formula: This formula is used to determine the minimum wage in India. This formula calculates the minimum wage based on basic expenses for food, clothing, and housing.
What is the current system? According to current rules, the government considers an employee’s family as a “three unit.” This limited scope includes the expenses of the employee, his wife, and children.
Demand to increase the number from three to five units: Learn the new math.
Employee organizations say that the reality of today’s modern Indian family has changed. Care for elderly parents and social security are now essential.
The National Council of Joint Consultative Machinery (NC-JCM) has proposed to the Pay Commission that the family should now be considered a “five unit” instead of three. The math is as follows:
Employee and spouse = 1 unit each (total 2)
Two children = 0.8 units each (total 1.6)
Dependent parents = 0.8 units each (female employees can also include their parents-in-law)
This total adds up to 5.2 units, which has been recommended to be rounded down to 5 units. Unions have cited the Maintenance of Parents and Senior Citizens Act and the Social Security Code 2020 for this reason.
If the demand is met, the minimum basic salary will be ₹69,000!
The memorandum submitted by NC-JCM clearly states that if the expenses for food, accommodation, medical treatment, transportation, and children’s education are included for a family of 5 units, the minimum necessary expenses increase significantly.
₹69,000 Basic Pay: Based on this 5-unit formula, the staff side has calculated that the minimum basic salary for employees should be ₹69,000, which is currently ₹18,000 under the 7th Pay Commission.
Fitment Factor of 3.833: If this minimum wage is to be implemented, the fitment factor for existing employees and pensioners will have to be increased to 3.833.
Over 11 million people will be directly impacted.
If the 8th Pay Commission agrees to this formula and the new household expenditure estimates, it will impact not only basic pay, but also the fitment factor, all allowances, gratuity, pension, and total salary calculations.
The formation of the 8th Pay Commission was announced last year on November 3, 2025. Typically, a new Pay Commission is formed in India every 10 years. This time, the implementation of the Commission’s recommendations will directly benefit over 11 million beneficiaries, including central government employees and pensioners, and their families.
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