Home / Money / Personal Finance /  7th pay commission latest news: How 7th CPC fitment factor will impact salary post-DA restoration

7th pay commission latest news today: After the announcement of Dearness Allowance (DA) restoration of near 52 lakh central government employees, 7th pay commission fitment factor has suddenly become a talking point for central government servants (CGS). According to the 7th CPC fitment factor, 7th pay commission pay matrix and 7th CPC salary of a central government employee will be decided on the given calculation where one's DA and 7th CPC basic pay also plays an important role.

7th pay commission salary

Speaking on the DA restoration and its impact on 7th CPC pay matrix of the central government employees Shiva Gopal Mishra, Secretary — Staff Side at National Council of JCM said, "Post-DA restoration, a central government employee’s DA is expected to jump from existing 17 per cent to at least 28 per cent. In that case, if we look at the 7th CPC fitment factor that has been fixed at 2.57 while implementing the seventh pay commission, an employee's monthly basic salary and monthly contribution like Provident Fund (PF), gratuity, etc. are expected to rise. So, seventh pay commission fitment factor will help fix the monthly basic salary by simply multiplying the basic salary with the fitment factor."

7th pay commission pay calculation

Mishra explained with an example. If a government employee's monthly basic salary is 20,000 in that case its monthly basic pay will be 51,400 ( 20,000 x 2.57). After that its allowances like DA, TA, medical reimbursement, etc. will be calculated. Then basic monthly pay and total allowance will decide gross monthly pay of an employee.

7th CPC pay: Monthly deduction

Speaking on how rise in DA will lead to rise in monthly PF deduction Kartik Jhaveri, Director — Wealth Management at Transcend Consultants said, "Monthly PF is decided on the basis of one's basic salary plus DA. That means, in the case of rise in DA, one's PF contribution is expected to go northward leading to higher retirement corpus of a central government employee."

Mishra of National Council of JCM said that 7th CPC fitment factor helps decide the basic pay of an employee. He said that basic salary is around 50 per cent of the gross monthly salary of a central government employee. Hence, a central government employee drawing 20,000 basic monthly salary will have gross monthly salary of around 1,02,800 ( 51,400 x 2). After that deduction like monthly PF contribution, income tax at source, etc. will be deducted and then net monthly payable amount is decided that is called net take home salary of a central government employee.

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