8th Pay Commission Update: Will 50% DA Merge with Basic Pay? Here’s What We Know

8th Pay Commission to Be Implemented from January 2026

Ending months of speculation, the Government of India has officially constituted the 8th Pay Commission, which is set to become effective from January 2026. With this announcement, discussions have reignited on whether Dearness Allowance (DA) will be merged with the basic salary—a move many government employees have long demanded.

DA Crosses 50%, Triggers Talk of Merger
Currently, the DA for central government employees has reached 50% of the basic pay. According to previous norms, once DA touches the 50% mark, it should be merged into the basic pay. This rule was followed during the 5th Pay Commission, but was skipped in the 6th and 7th Commissions, making employees hopeful that the 8th Commission may reinstate the policy.

Employee Unions Push for DA Merger
Several employee organizations, including AIDEF, NFIR, and Confederation of Central Government Employees, have been strongly advocating for the merger of DA with basic pay. They argue that merging DA would strengthen salary structure stability and also lead to higher pension and gratuity payouts, which are calculated on basic pay.

Government Yet to Make Final Decision
Despite the growing demands, the Government has not yet made any official decision on the DA merger. Finance Ministry sources have indicated that there is no immediate plan to merge DA until the recommendations of the 8th Pay Commission are finalized. However, the topic may be considered in 2026 once implementation begins.

Potential Impact If DA Is Merged with Basic Pay
1. Increase in basic salary, leading to an overall hike in total earnings.
2. Changes in the fitment factor, affecting salary calculations.
3. Pension and gratuity benefits would rise due to a higher basic pay.Future DA hikes could be calculated from the revised base.

With the 8th Pay Commission’s implementation on the horizon, government employees are closely watching whether the DA merger becomes a reality. If it does, it could significantly impact salary structure and post-retirement benefits.