8th Pay Commission DA merger: If you’re a central government employee, you’ve probably been waiting for the 8th Pay Commission (8th CPC) with high hopes. Many believe that when the new pay structure kicks in on January 1, 2026, the entire Dearness Allowance (DA) — expected to touch 61% — will be merged into the basic pay.
But here’s the twist — experts say that might not happen.
Instead, only 50% of the DA could be merged before resetting it to zero.
Surprised? You’re not alone. Let’s break down what this means for your salary and why the government might take this route.
8th Pay Commission 50% DA merger
On paper, employees expect the entire 61% DA (as projected by early 2026) to merge into their new basic pay. But according to sources and financial analysts, the government is likely to merge only 50% — and this decision has some strong logic behind it.
1. The 50% DA Rule
There’s a long-standing principle that whenever DA crosses 50%, it should be merged into the basic pay. It happened earlier too — for instance, before the 6th Pay Commission. DA crossed that mark in January 2024, but the government didn’t merge it then. Experts believe they intentionally held back, planning to use that 50% benchmark as the merger limit under the 8th Pay Commission.
2. The 7th Pay Commission Experience
When the 7th Pay Commission was rolled out in 2016, the entire DA at that time (125%) was merged with the basic salary. While employees welcomed it, the move significantly increased the government’s financial burden due to higher HRA, TA, and pension payouts. This time, the finance ministry is being cautious.
3. Controlling the Financial Load
If the full 61% DA were merged, the revised basic pay — and therefore every allowance linked to it — would rise sharply. By sticking to only 50%, the government can manage the fiscal pressure without cutting back on employee benefits entirely.
How This Impacts Your Salary
Let’s look at the real difference between merging 61% DA vs. 50% DA:
| Current Basic Pay | If 61% DA Is Merged | If 50% DA Is Merged | Difference |
|---|---|---|---|
| ₹30,000 | ₹48,300 | ₹45,000 | ₹3,300 less |
| ₹50,000 | ₹80,500 | ₹75,000 | ₹5,500 less |
| ₹80,000 | ₹1,28,800 | ₹1,20,000 | ₹8,800 less |
At first glance, the difference might look small — but once the fitment factor (likely around 1.92x) is applied, the final salary variation could be several thousand rupees each month.
So yes, this move could make your initial 8th CPC revision slightly lower than you expected — but it’ll still raise your base substantially.
The Base Year Reset: Another Hidden Change
There’s another crucial change expected with the 8th Pay Commission — the base year for DA calculation.
Right now, DA is linked to the 2016 = 100 index of the Consumer Price Index for Industrial Workers (AICPI-IW). But from 2026 onward, the base year may be shifted to 2026 = 100.
In simple terms, that’s like resetting the inflation calculator. Once the new base year comes in, DA will restart from zero — just like what happened in 2016 when DA reset after the 7th CPC merger.
This reset gives the government a clean slate and justifies merging only 50% of the old DA before restarting the count.
Why the Base Year Needs Updating
Think about how much life has changed since 2016.
Back then, expenses like OTT subscriptions, app-based transport, and digital services weren’t even part of most households’ budgets.
That’s why updating the base year makes sense — it reflects modern spending patterns, giving a more accurate inflation measure.
So yes, the base year change isn’t just technical; it’s a much-needed reality check.
What Happens After the Merger?
Once 50% of your DA is merged in January 2026, your DA counter will restart from 0%. From then, every new DA hike (say 2%, 3%, or 4%) will be calculated on your new, higher basic pay.
That means your future salary growth will actually accelerate, even if the initial hike feels a bit smaller than expected.
When Will the 8th Pay Commission Be Implemented?
The 8th Pay Commission panel is expected to be set up by late 2025, and the final report might be ready by March 2027. However, like previous commissions, its recommendations will apply retrospectively from January 1, 2026, ensuring that employees receive arrears once the new pay scales are approved.
What This Means for You
While the idea of “only 50% DA merger” may sound disappointing at first, the long-term impact could still be positive for employees. The revised base year, modern inflation data, and higher fitment factor will likely ensure fair salary growth — without putting unsustainable pressure on the economy.
In short, the 8th Pay Commission is designed to balance employee benefits with fiscal stability — and even if the math changes slightly, the end result still looks bright.
Frequently Asked Questions
1. Will only 50% DA be merged under the 8th Pay Commission?
Yes, as per current expert analysis, only 50% of the DA (not the full 61%) will likely be merged into the basic pay before the DA counter resets to zero.
2. What does changing the base year to 2026 mean?
It means the inflation index for DA calculations will restart based on 2026 prices, resetting DA to zero and reflecting modern spending habits.
3. When will employees start getting 8th Pay Commission benefits?
The new pay structure is expected to take effect from January 1, 2026, though arrears might be paid later once the report is finalized.