The 3% increase raises Dearness Allowance (DA) and Dearness Relief (DR) from 60% to 63%, effective July 1, 2026. For an employee earning ₹18,000 in basic pay, the additional DA is ₹540 per month. If arrears for July through October are paid together, the four-month amount will be ₹2,160.

The key calculation is Basic Pay × 3% × Number of Arrears Months.

DA Hike 2026: 3% Increase Approved, Check October Salary and Four-Month Arrears Calculation

DA Arrears 2026: The Central Government has announced a 3% increase in Dearness Allowance (DA) for employees and Dearness Relief (DR) for pensioners, raising the rate from 60% to 63%.

The decision, approved by the Union Cabinet on October 28, 2026, will be effective from July 1, 2026. This means eligible employees and pensioners will receive the benefit of the higher rate for the period beginning in July.

According to the government announcement, approximately 48.54 lakh central government employees and 68.71 lakh pensioners are expected to benefit.

The combined annual financial impact is estimated at ₹10,016 crore.

For employees, the biggest question is how much additional money they will receive with their salary and how the arrears will be calculated.

How Much Has Dearness Allowance Increased?

The government has increased DA and DR by three percentage points.

Previously, eligible employees received DA equal to 60% of their basic pay.

Following the revision, the rate becomes 63%.

For example, an employee with a basic salary of ₹18,000 previously received ₹10,800 as DA.

At the revised rate, the DA becomes ₹11,340.

This means an additional ₹540 every month.

DA Hike 2026: Salary Increase Calculation

The increase shown in the table relates only to DA. Actual take-home salary may differ because of deductions and other salary components.

How Much DA Arrears Will Employees Receive?

Since the revised rate is effective from July 1, employees are entitled to the difference between the old and new rates for the applicable months.

If the arrears cover July, August, September and October, the calculation will be based on four months.

For example, an employee with a basic salary of ₹18,000 receives an additional ₹540 monthly.

Therefore:

₹540 × 4 = ₹2,160

Similarly, an employee with a basic salary of ₹56,100 receives ₹1,683 more every month.

The four-month amount would be:

₹1,683 × 4 = ₹6,732

DA Arrears Calculation for July to October 2026

These are illustrative amounts assuming basic pay remains unchanged throughout the four-month period.

Will Four Months of Arrears Be Paid With October Salary?

Reports suggest that the government intends to provide the revised DA benefit along with the applicable arrears.

However, the precise payment schedule depends on the implementation orders and payroll processing.

There is an important distinction between receiving four months of additional DA and receiving four months of arrears.

If the October salary already includes DA at 63%, employees would generally receive three months of arrears for July, August and September, along with the increased October DA.

In that case, the total additional DA relating to July through October would still equal four months.

If October salary is processed at the old rate, the arrears may instead cover July through October and be paid later.

Employees should check their salary slips and departmental instructions for the actual arrangement.

How to Calculate Your Own DA Arrears

Employees can calculate their additional monthly DA using a simple formula:

Monthly DA Increase = Basic Pay × 3 ÷ 100

For arrears:

DA Arrears = Monthly DA Increase × Number of Eligible Months

Suppose an employee has a basic salary of ₹40,000.

The monthly increase will be:

₹40,000 × 3 ÷ 100 = ₹1,200

If four months are payable, the amount will be:

₹1,200 × 4 = ₹4,800

If only three months remain unpaid, the arrears will be ₹3,600, while the fourth month's increased DA may already be included in regular salary.

How Much Will Pensioners Receive?

The increase also applies to Dearness Relief for eligible central government pensioners.

DR is calculated using the eligible basic pension.

For example, a pensioner receiving ₹20,000 as basic monthly pension will receive an additional ₹600 per month.

For four months, the additional amount would be ₹2,400.

Pensioners' DR Increase and Arrears

The actual pension credit and arrears will depend on the applicable disbursement arrangements.

Why Is DA Revised Twice a Year?

Dearness Allowance is intended to help government employees manage rising living costs.

The Central Government normally revises DA and DR twice a year, with changes effective from January 1 and July 1.

The calculation follows an approved mechanism linked to inflation indicators.

The latest increase has been announced ahead of Diwali, offering additional financial support to employees and pensioners.

Will Basic Salary Also Increase by 3%?

No. A 3% DA increase does not mean that basic salary rises by 3%.

The basic salary remains unchanged solely because of this announcement.

For example, an employee earning ₹35,400 in basic pay will continue to have the same basic salary.

However, DA increases from ₹21,240 to ₹22,302.

This results in an additional ₹1,062 per month.

Any separate revision of basic pay would require an applicable increment, promotion or pay revision.

What About the 8th Pay Commission?

Central government employees are also waiting for the recommendations of the 8th Central Pay Commission.

However, the latest DA revision is separate from the pay commission process.

The 3% increase follows the approved mechanism associated with the 7th Central Pay Commission.

Future changes in basic salaries, fitment factors and allowances will depend on the recommendations accepted by the government.

Final Update

The Central Government's 3% DA and DR hike raises the applicable rate from 60% to 63%, effective July 1, 2026.

An employee with ₹18,000 basic pay will receive ₹540 more every month, while an employee earning ₹56,100 in basic pay will receive ₹1,683 extra.

For the four-month period from July through October, the additional DA amounts to ₹2,160 and ₹6,732 respectively.

Employees should distinguish between arrears and the revised DA already included in regular salary. The exact payment date and amount credited will depend on official implementation instructions.

Disclaimer: Salary and arrears calculations are illustrative and exclude taxes, deductions, changes in basic pay and other applicable adjustments.

The Cabinet's 3% increase and July 1 effective date are confirmed; the exact timing of the arrears credit should be checked against the implementing order.