How to calculate arrears in salary under the 8th Pay Commission
Arrears arise whenever a pay revision or a DA instalment takes effect from a date earlier than the month it is actually paid. The 8th CPC was constituted on 3 November 2025 and is expected to apply from 1 January 2026, so employees will accumulate several months of arrears before the first revised salary reaches them. Current DA/DR is 60% from 1 January 2026, up from 58% from 1 July 2025.
Step 1 — Fix your existing pay drawn
Add the DA you were actually paid to your basic pay. If you drew basic pay of ₹35,400 with 58% DA, your existing pay for arrear purposes is ₹35,400 + ₹20,532 = ₹55,932. Pick the exact previous DA instalment above so the figure matches your pay slip.
Step 2 — Fix your revised pay
Multiply basic pay by the fitment factor to arrive at the revised basic pay. DA restarts at 0% on implementation, so the revised basic itself is compared against the old basic-plus-DA figure. At 2.28x, ₹35,400 becomes ₹80,712.
Step 3 — Multiply the monthly gap by the arrear months
The monthly difference multiplied by the number of months between the effective date and the payout month gives gross arrears. Add DA arrears separately if a DA instalment was itself paid late at the old rate.
Step 4 — Adjust tax and recoveries
Arrears are taxable in the year of receipt. Claim Section 89(1) relief through Form 10E to spread the amount across the relevant years. NPS/GPF subscription, CGHS and licence-fee recoveries are also adjusted before the net credit.