New Pay Scale Plans Introduce Tiered Salary Hikes

The process of implementing a new national pay structure for government employees has commenced from 1 July, although an official gazette has yet to be issued. Early drafts indicate a significant shift in how annual salary increments will be calculated, moving away from a uniform rate across all pay grades towards a tiered system linked to job hierarchy.

According to sources within the Ministry of Finance, Bangladesh, the finalisation of the gazette may take another two to three months as discussions continue. Officials involved in the process suggest that refinements are still being made to ensure fiscal balance alongside employee welfare considerations.

Under the preliminary proposal prepared in consultation with the National Pay Commission, annual increment rates will vary by grade. Employees in the sixth to twentieth grades are expected to receive a five per cent annual increment on their basic salary. Those in the fifth grade may receive four per cent, while the third and fourth grades are likely to see three and a half per cent increases. The second grade has been proposed at two point seven five per cent, with the first grade to be determined separately. At present, a uniform average increment of around five per cent applies across all levels.

The reform process has been shaped by a broad consultation exercise. Around 137,500 government employees, 61,500 citizens, and representatives from 3,513 institutions participated in the survey. Only 5.6 per cent of respondents supported retaining the existing uniform increment system. More than half, approximately 50.43 per cent, favoured a model aligned with inflation trends, while about 31.54 per cent preferred adjustments linked directly to living costs. A notable 58 per cent also expressed support for higher increment rates for lower-grade employees, reflecting concerns over income disparity within the public sector.

Adjustments are also being considered in allowances. While the commission initially proposed raising medical allowances to 5,000 taka, the revised plan sets it at 3,000 taka. Educational allowances for children have been reduced from a proposed 2,000 taka to 1,500 taka. Officials from the finance division noted that although some allowances have been moderated, overall compensation will still increase compared with the existing structure.

Implementation is expected to be phased. The revised basic pay structure will be introduced first, while allowance adjustments are likely to be rolled out in subsequent fiscal cycles. This staggered approach is intended to reduce immediate pressure on public finances while allowing gradual alignment with the new framework.

Internal projections suggest that the lowest-grade government employee, currently receiving a basic salary of 8,250 taka and total benefits of about 16,950 taka, could see basic pay rise to 20,000 taka under the new structure. Combined with allowances, total monthly income may reach approximately 41,908 taka.

Higher grades are also expected to see increases, though allowance growth may be relatively restrained at senior levels. The reform aims to maintain structural balance across the hierarchy, while giving greater weight to lower and mid-level employees who currently depend more heavily on transport, risk, washing, and meal-related allowances.