The 7th Pay Commission is a government commission that recommends changes in the pay structure and allowances of central government employees. Here are the key highlights of the recommendations made by the 7th Pay Commission:

1. Basic Pay: The basic pay of central government employees has been increased by a minimum of 14.3% and a maximum of 16%. This increase is effective from January 1, 2016.

2. House Rent Allowance (HRA): HRA rates have been revised to 24%, 16%, and 8% of the basic pay for X, Y, and Z category cities, respectively.

3. Dearness Allowance (DA): DA will continue to be calculated as a percentage of the basic pay. It will be revised twice a year based on the All India Consumer Price Index.

4. Transport Allowance: The transport allowance has been increased by 3 times for employees in lower pay bands.

The calculation of the salary according to the 7th Pay Commission is as follows:

1. Take the basic pay of the employee and add the applicable Dearness Allowance.

2. Add the House Rent Allowance based on the city category.

3. Add the Transport Allowance.

4. Deduct the contributions towards Provident Fund, Pension Fund, and Income Tax.

The final amount arrived at after these deductions will be the net salary of the employee.