Bangladesh to raise government basic pay in stages, keep allowances tied to June 2026 salaries

Higher October salaries, but allowances stay on the old basis

Bangladesh government employees are due to receive higher basic salaries in their October 2026 payroll, while certain allowances will continue to be calculated using the basic pay they received on 30 June 2026. A Finance Division notification issued on 19 October sets out that arrangement as the ninth national pay scale begins taking effect in stages.

The new structure sets the minimum basic salary at Tk20,000 and the highest fixed basic salary at Tk156,000. Those are the amounts under the fully implemented scale. Employees will initially receive only part of the increase, with different payment schedules for grades 1 to 9 and grades 10 to 20.

The allowance notification has a specific scope: it covers existing allowances calculated as a percentage of basic salary that fall outside the Service (Pay and Allowances) Order, 2026. For those payments, the calculation will continue to use the employee's basic salary on 30 June until a further order is issued.

Revised house rent, medical and other allowances under the new structure are scheduled to begin on 1 January 2028. Full implementation of the basic salary increase comes earlier, on 1 July 2027. Employees therefore face three separate changes: an initial increase in basic pay, further increases during 2027, and revised allowances in 2028.

The practical result is that a higher basic salary in October will not automatically produce a matching increase in every payment attached to it. For household budgeting, employees need to distinguish their new basic pay entitlement from the portion currently payable and the allowance rules still in force.

Who comes under the allowance instruction?

The Finance Division's Regulation 3 branch issued the notification for employees of government ministries, divisions, departments and agencies, as well as state owned enterprises and autonomous institutions. The instruction was issued by order of the president and signed by Finance Division official Md Ferdous Alam.

The operative rule concerns the amount used to calculate an allowance. If an allowance is expressed as a percentage of basic salary and falls within the notification's scope, payroll staff must continue using the employee's basic pay from 30 June 2026.

A percentage and its calculation base are different things. An allowance can retain the same percentage yet increase in cash terms when the salary beneath it rises. By keeping the calculation base at the June salary, the instruction holds back that automatic increase for the covered allowances until further directions.

The broader timetable separately postpones revised house rent, medical and other allowances until January 2028. Employees checking their payslips will therefore need to look at both the type of allowance and the rule governing it, rather than apply the new basic salary to every allowance calculation.

How the three salary stages work

The government approved the ninth national pay structure on 31 August 2026, with effect from 1 July. Payments are being introduced across the 2026–27 and 2027–28 financial years, rather than moving immediately to the full new amounts.

The key calculation is the difference between an employee's newly fixed basic salary and the basic salary received or due on 30 June 2026. The government pays a specified share of that difference on top of the old basic salary.

• 1 July to 31 December 2026: employees in grades 1 to 9 receive 40% of the increase; employees in grades 10 to 20 receive 50%.
• 1 January to 30 June 2027: employees in grades 1 to 9 receive 70% of the increase; employees in grades 10 to 20 receive 75%.
• From 1 July 2027: the full basic salary under the new scale becomes payable, with annual increments applied under the relevant rules.
• From 1 January 2028: revised allowances under the new structure are scheduled to take effect.

The percentages apply to the increase, not to the whole new salary. A worker entitled to a Tk10,000 increase who receives 50% of that increase would get Tk5,000 added to the old basic salary during the relevant stage.

What the changes mean in taka

A grade 20 employee at the old starting basic salary of Tk8,250 moves to a new starting rate of Tk20,000. The difference is Tk11,750. Applying the first stage's 50% payment produces a basic salary of Tk14,125, before allowances and deductions.

At the second stage's 75% rate, the same calculation produces Tk17,062.50. The full Tk20,000 becomes payable from July 2027. These figures illustrate the staged increase using the starting salaries; an employee's actual calculation depends on the salary fixed for that person.

A grade 9 employee moving from the old starting rate of Tk22,000 to Tk44,000 has a Tk22,000 increase. Paying 40% of that difference gives a first stage basic salary of Tk30,800. At 70%, the amount becomes Tk37,400, before reaching the full Tk44,000 in July 2027.

For grade 1, the fixed basic salary rises from Tk78,000 to Tk156,000. Using the same method, the first stage produces Tk109,200 and the second Tk132,600. Each example separates basic pay from allowances, deductions and any arrears.

The lowest starting salary rises fastest

Grade 20's starting salary increases by about 142%, from Tk8,250 to Tk20,000. Grade 9's starting salary and grade 1's fixed salary both double, rising by 100%. The lowest grade therefore receives a larger proportional increase, although the cash increase is much greater at the top.

The gap can also be expressed as a ratio. Previously, the highest fixed basic salary of Tk78,000 was about 9.45 times the lowest starting salary of Tk8,250. Under the new structure, Tk156,000 is 7.8 times Tk20,000.

Grades 10 to 20 also receive a larger share of their increase during both transition stages. They get 50% rather than 40% in the first stage, then 75% rather than 70% in the second. That brings employees in those grades closer to their full new basic salary sooner.

The new Tk20,000 minimum is the starting point for grade 20, whose scale extends to Tk48,400. Grade 9 starts at Tk44,000 and extends to Tk105,900. An employee's position within a grade matters alongside the grade number.

How the other grades change

The new structure revises salaries throughout the 20 grades. Several higher grades begin at twice their former starting rates. Grade 2 starts at Tk132,000, compared with Tk66,000 previously, while grade 3 starts at Tk113,000 instead of Tk56,500.

Grade 4 begins at Tk100,000, grade 5 at Tk86,000, grade 6 at Tk71,000, grade 7 at Tk58,000 and grade 8 at Tk46,000. Their respective starting salaries were previously Tk50,000, Tk43,000, Tk35,500, Tk29,000 and Tk23,000.

The remaining starting rates show how the increases are distributed below grade 9:

• Grades 10 and 11: Tk16,000 rises to Tk32,000, and Tk12,500 rises to Tk25,000.
• Grades 12 and 13: Tk11,300 rises to Tk24,300, and Tk11,000 rises to Tk24,000.
• Grades 14, 15 and 16: Tk10,200 rises to Tk23,500; Tk9,700 to Tk22,800; and Tk9,300 to Tk21,900.
• Grades 17, 18 and 19: Tk9,000 rises to Tk21,400; Tk8,800 to Tk21,000; and Tk8,500 to Tk20,500.

These are starting salaries under the completed structure. Employees already above the starting point in their existing scale must have their individual salary fixed under the conversion rules before the staged payment is calculated.

How individual salaries are being fixed

Employees have been entering information through the Pay Fixation option in the government's iBAS++ financial management system since 5 October. The exercise was scheduled to finish on 20 October, allowing the revised basic salaries to enter October's payroll.

Pay fixation means assigning each employee a salary point in the new scale. An employee receiving the starting salary in the old scale moves to the starting salary in the corresponding new scale. The published example moves a basic salary of Tk9,300 to the corresponding new starting rate of Tk21,900.

For an employee earning above the old starting salary, the method first calculates the difference between that person's existing basic pay and the old scale's minimum. That difference is then added to the new scale's starting salary.

If the resulting amount matches a salary step in the new scale, the employee is placed at that step. If it falls between steps, the next higher step is used. The transition percentages are then applied to the difference between the newly fixed basic salary and the old salary.

What the gazette dates tell employees

The Finance Division's allowance notification was published in the government gazette on 19 October 2026. The general pay order's notification date has been given as both 17 September and 19 September.

Bangladesh Government Press lists a related instrument, SRO No. 349-Law/2026, with a publication date of 19 September 2026. Its pay and allowances order is specifically titled Service (Banks, Insurance and Financial Institutions) (Pay and Allowances) Order, 2026.

Employees and payroll offices need the instrument applying to their institution because the October allowance direction covers a broad range of government bodies, while the September listing expressly names banks, insurance and financial institutions. The common payment timetable places full basic salary implementation in July 2027 and revised allowances in January 2028.

October payroll and the next payment dates

Finance Division officials said budget allocations were available for the increased basic salaries and that employees would receive the higher amounts at the end of October once pay fixation was completed. The immediate payroll change therefore concerns the first stage of the increase.

The scale is effective from 1 July 2026, creating entitlement to arrears for the period before publication of the pay order. No specific payment date was given for those arrears.

Employees checking October's salary can compare three amounts: their basic salary on 30 June, their newly fixed basic salary, and the applicable share of the difference. Allowances covered by the October notification continue to use the June salary as their calculation base.

The next scheduled increase is on 1 January 2027, when the payable share rises to 70% for grades 1 to 9 and 75% for grades 10 to 20. Full basic pay follows six months later. Revised allowances are scheduled for the following January.

Key Points

• Higher basic salaries are due in October 2026 payroll under the first stage of Bangladesh's ninth national pay scale.
• Covered percentage based allowances remain tied to basic salaries received on 30 June 2026 until further orders.
• The fully implemented scale sets the lowest starting basic salary at Tk20,000 and the highest fixed basic salary at Tk156,000.
• Grades 1 to 9 initially receive 40% of their increase; grades 10 to 20 receive 50%.
• The payable shares rise in January 2027, with full basic salary implementation from 1 July 2027.
• Revised house rent, medical and other allowances are scheduled to begin on 1 January 2028.