Every few months, central government employees track Dearness Allowance updates like clockwork. But once in a decade, something much bigger happens. DA Merger 2026 is that moment. It’s not just another percentage increase. It’s a full reset of the salary structure under the upcoming 8th Pay Commission, expected to apply from 1 January 2026.
If you’re wondering why everyone keeps talking about DA suddenly going back to zero, here’s the simple truth. This reset is exactly what allows salaries and pensions to jump to a higher base before the next ten-year cycle begins.
What DA Merger Really Means
Dearness Allowance exists for one reason: inflation. Prices rise, and DA tries to keep your purchasing power intact. It’s calculated as a percentage of basic pay and revised twice a year. Over time, that percentage keeps stacking up.
When a new pay commission arrives, the system doesn’t carry that accumulated DA forward separately. Instead, the entire DA percentage is merged into the basic pay using a fitment factor. After this merger, DA doesn’t disappear forever. It simply restarts from zero or a very low level and begins growing again with inflation.
Think of it like renovating a house. You don’t keep adding extensions forever. At some point, you rebuild the foundation. That’s what DA Merger 2026 does for your pay.
Why the DA Merger Is Due in 2026
The 7th Pay Commission officially ends on 31 December 2025. By then, DA is projected to reach around 60 to 63 percent, based on current inflation trends. Carrying such a high DA into the next cycle would complicate calculations and distort allowances.
The 8th Pay Commission will merge this accumulated DA into the revised basic pay. This move simplifies salary structures and automatically boosts allowances like HRA and Transport Allowance, which are calculated as a percentage of basic pay.
Expected DA Levels Before and After Merger
| Period | Projected DA Rate | Notes |
|---|---|---|
| July–December 2025 | 58–60% | Based on current AICPI trend |
| January 2026 (pre-merger) | 60–63% | Final DA hike under 7th CPC |
| After 8th CPC merger | 0% or very low | Fresh DA cycle begins |
The final DA figure will only be confirmed after the last DA hike announcement in early 2026.
How DA Merger 2026 Changes Your Salary
Let’s make this real. Suppose your basic pay is ₹50,000. If DA reaches 62 percent, that’s another ₹31,000, making your total ₹81,000. After the merger, the fitment factor is applied to the combined amount.
With a projected fitment factor between 2.57 and 2.86, your new basic pay could land anywhere between ₹2.08 lakh and ₹2.32 lakh. From this higher base, all future allowances and DA are calculated. That’s why the merger matters more than it first appears.
What It Means for Pensioners
Pensioners aren’t left out. Their basic pension is revised upward after DA and Dearness Relief are merged in the same way. This directly increases monthly pension amounts and strengthens inflation protection for years to come.
Timeline You Should Expect
The DA Merger 2026 will apply notionally from 1 January 2026. Actual implementation, along with arrears, will happen after the 8th Pay Commission submits its report, likely around mid-2027. Arrears are usually released in phases.
The takeaway is simple. DA Merger 2026 isn’t just a reset. It’s the base on which the next decade of salaries and pensions will stand.
Frequently Asked Questions
Will DA really become zero after the merger?
Yes, after the DA is merged into the revised basic pay, the DA percentage resets to zero or a very low figure. It then starts increasing again with future inflation, just like at the beginning of earlier pay commissions.
Does DA Merger mean an immediate salary hike in January 2026?
Not immediately in cash terms. The merger is applied notionally from January 2026, but actual salary revision and arrears payment happen after government approval of the 8th Pay Commission recommendations.
Do pensioners benefit equally from DA Merger 2026?
Yes. Dearness Relief is merged into basic pension, which increases the pension base. This results in higher monthly pensions and better protection against rising living costs over the long term.