9th pay scale approved with up to 142% hike in basic pay

The Cabinet on Monday approved the National Pay Scale 2026, raising the minimum basic salary of government employees from Tk8,250 to Tk20,000 and the maximum from Tk78,000 to Tk156,000, with the revised basic pay to be introduced in three phases from 1 July 2026 to 1 July 2027.

Various allowances will take effect from 1 January 2028, while pensions for retired government employees will rise by between 55% and 100%. The approval came at a Cabinet meeting chaired by the prime minister. 

The existing 20 grades will remain unchanged. The Joint Services Instructions 2026 for the armed forces have also been approved in line with the new pay structure.

The new scale has been deemed effective from 1 July 2026.

The biggest increases in basic salaries will go to lower-grade employees. Starting basic salaries for Grades 1 to 11 have been doubled, while increases in Grades 12 to 20 range from 115% to 142%.

The starting basic salary for Grade 12 has risen from Tk11,300 to Tk24,300, an increase of 115%. For Grade 13, it has gone up from Tk11,000 to Tk24,000, or 118%.

Grade 14 will rise from Tk10,200 to Tk23,500, an increase of 130%, while Grades 15 and 16 will increase from Tk9,700 and Tk9,300 to Tk22,800 and Tk21,900 respectively – a 135% rise in both cases.

The basic salary for Grade 17 will increase from Tk9,000 to Tk21,400, Grade 18 from Tk8,800 to Tk21,000, Grade 19 from Tk8,500 to Tk20,500 and Grade 20 from Tk8,250 to Tk20,000. The increases are 138%, 139%, 141% and 142%, respectively.

The ratio between the highest and lowest basic salaries has also been narrowed from 1:1.945 to 1:1.78, with the government saying the move is intended to make the pay structure fairer.

Briefing journalists after the Cabinet meeting, Cabinet Secretary Nasimul Gani said the approval would be followed by the issuance of necessary laws and SROs, with the process expected to begin immediately.

He said the last national pay scale was introduced in 2015 and that rising inflation and living costs had made a revision necessary. The previous government began the process in 2025 but did not finalise or formally announce it.

“We held eight meetings even after receiving the commission’s report. We examined different options at different times and finally reached a decision,” he said.

The government had sought to bring the new structure as close as possible to compensating employees for inflation, he said.

“The overall effort was to come as close as possible to compensating for the inflation that has taken place. We have tried to reduce the real wage loss suffered by people. If someone receives a 100% increase, the intention is that it will at least help compensate for the loss in real income caused by the rising cost of living,” Nasimul Gani said.

Former interim government Finance Adviser Dr Salehuddin Ahmed welcomed the move, saying it had been taken considering employees’ needs.

“The new pay structure should have been introduced earlier. However, it will certainly create some pressure on the private sector. The private sector, including the journalists, should also consider introducing new pay structures while taking inflationary pressure into account. At the same time, the government could reduce unnecessary manpower in the public sector,” he said.

The government has also decided to substantially raise net pensions for retired government employees.

The election manifesto pledged to introduce an “One Rank One Pension” (OROP) system for military and civilian personnel. But immediate implementation would impose a huge financial burden, while information on civilian employees who retired before 2019 is unavailable. The government therefore plans to introduce OROP in phases by 2030.

Until then, pensions will increase on a slab basis.

Those receiving a monthly net pension of Tk9,000 or less will get a 100% increase. Pensioners receiving Tk9,001-Tk20,000 will get a 75% increase; those receiving Tk20,001-Tk30,000, 65%; Tk30,001-Tk40,000, 60%; and those receiving Tk40,001 or more, 55%.

The government says long-serving pensioners receiving relatively low amounts will benefit most.

For the first time, government employees with children with special needs will receive a monthly allowance of Tk3,000 for each child.

The mobile allowance has also been extended to employees in all grades. Previously, only Grade 5 employees were entitled to it. The expansion takes into account rising internet and digital communication costs.

Although the new scale is effective from 1 July 2026, it will not be implemented in full immediately because of its financial implications and possible inflationary pressure.

Grades 10 to 20 will receive priority because of their relatively lower incomes. Revised basic salaries will be implemented in three phases between 1 July 2026 and 1 July 2027.

Allowances will come into effect from 1 January 2028, while pension increases will be introduced separately.

The government says gradual implementation will help limit the impact on inflation.

A separate committee has been formed for the judicial service. The Bangladesh Judicial Service Pay Scale will be approved based on its report and will also be implemented in phases from 1 July 2026.

Around 2.4 million military and civilian employees and more than 900,000 retired employees and other eligible beneficiaries will benefit from the new pay structure.

The additional annual government expenditure is estimated at Tk105,580 crore. The government says funds have already been provided for in the budgets of the relevant fiscal years under the Medium-Term Budget Framework.

The new scale was approved after the government considered the reports of the National Pay Commission 2025 and Armed Forces Pay Committee 2025. A secretaries’ committee subsequently reviewed the recommendations before they were placed before the Cabinet.

The government said the decision took into account its financial capacity, the broader economic situation, inflation, living costs, employees’ living standards and the need for a balanced pay structure.

The Finance Division will issue gazettes, orders and instructions detailing salary fixation, allowances, pensions and other post-retirement benefits.

Nasimul Gani said government employees had gone around 12 years without a salary increase, despite pay scales generally being revised every five years.

As a result, their living standards had declined, he said, adding that the government had sought to balance employees’ needs with its financial capacity.

Asked about the long-standing demand for time scale and selection grade, he indicated that existing rules would remain in force unless a new decision was taken.