8th Pay Commission: What is gratuity, and how is it calculated based on last drawn salary? Expert explains

8th Pay Commission consultations continue. Know how gratuity is calculated, the ₹25 lakh cap, union demands and what retiring central government employees can expect.

The 8th Pay Commission is currently in its consultation stage. The three-member panel headed by Justice Ranjana Prakash Desai concluded its Bengaluru meetings on 8 October and will hold its next round of consultations in Mumbai on 22-23 October.

As employee unions continue to press for changes to the pay structure, gratuity and retirement benefits remain a key concern for central government employees nearing retirement.

Over the last few months, prominent unions have raised several demands before the panel on the fitment factor, revised basic salaries, allowances, gratuity limits and pension reforms. These include the National Council–Joint Consultative Machinery (NC-JCM) and the All India Defence Employees Federation (AIDEF). Proposals for a higher gratuity ceiling and revised retirement benefits are among those under discussion.