Dearness Allowance Calculation : Central employees and pensioners are eagerly waiting for the hike in Dearness Allowance (DA) and Dearness Relief (DR) from July 2025. Meanwhile, a big and fresh update has surfaced that DA of employees may be merged into the basic salary, and the calculation process will start again from zero. Let’s understand the complete details below.
Central employees and pensioners are eagerly awaiting the increase in DA and DR from July 2025. Generally, the government announces this either in October or December during the festive season, but the benefit is given retrospectively from July.
This news is going to be very important for all central employees and their families who are waiting for this hike. Let’s look at the complete information in detail below.
Dearness Allowance Calculation: DA for government employees and pensioners is announced twice a year
It is important to note that DA for government employees and pensioners is revised twice a year—once every six months. The first DA hike is implemented from 1st January, though the announcement is usually made in March.
The second DA hike is effective from 1st July, and the announcement generally comes in September or October.
Similarly, for July 2025, the DA hike is also expected to follow this pattern. Based on current figures, a 3% increase is expected, which would raise DA from 55% to 58%.
Dearness Allowance Calculation : How is DA calculated?
DA is calculated based on the All-India Consumer Price Index for Industrial Workers (AICPI-IW). In March 2025, this index was at 143, and by May it had reached 144. If this trend continues, the possibility of a 3% hike will become stronger.
Since the implementation of the Pay Commission, DA rates have been continuously increasing. In 2016, DA stood at 0%, and by January 2025, it had reached 55%. With the expected 3% hike in July, DA may touch 58%.
Later, in January 2026, after a proper review, if DA rises by another 2%, it may reach 60%.
When will the 8th Pay Commission be implemented?
The government may implement the 8th Pay Commission from January 2026. A major change regarding DA could be introduced in this process. It is possible that when DA reaches 60%, it may be merged into the basic salary.
This is a common practice during Pay Commissions, where the salary structure is revised, and DA calculations start afresh from zero.
For SSC employees and others, this will mean a new pay scale and clear benefits. However, it is worth noting that this is currently only a projection based on inflation indices, and the final decision will come only after Cabinet approval.
Employees and pensioners will have to wait a few more months for the official announcement.