New Pay Scale Implementation from July 2026: Phased Rollout Planned

The government is set to implement a new national pay scale for public officials and employees starting July 1, the beginning of the 2026-27 fiscal year. To manage the fiscal impact, the new salary structure will be rolled out in phases.

The upcoming budget reportedly allocates an additional Tk 35,000 crore for salaries, allowances, and pensions. Sources indicate that this initial funding may cover half of the proposed basic salary increase, with the remainder and various allowances to be integrated over the following two fiscal years.

Strategic Implementation The Finance Department's action plan follows recommendations from the reconstituted National Pay Commission. Finance Minister Amir Khasru Mahmud Chowdhury and Finance Advisor Rashed Ahmed Titumir have discussed a two-to-three-year implementation window to mitigate inflationary pressure. Final execution awaits a formal signal from the Prime Minister.

The 'National Pay Commission 2025,' led by former Finance Secretary Zakir Ahmed Khan, previously suggested salary hikes ranging from 100% to 140%. Under this proposal:

• Lowest Grade: Increases from Tk 8,250 to Tk 20,000.

• Highest Grade: Increases from Tk 78,000 to Tk 1,60,000.

Economic Justification Dr. AK Enamul Haque, Director General of the Bangladesh Institute of Development Studies (BIDS), noted that a phased approach is essential to prevent a market shock. "If the country maintains a GDP growth of 6-7%, implementing the new scale is manageable," he stated. He added that the reform aims to improve governance and retain talent, noting that higher salaries will likely bring more employees into the tax net, ultimately boosting domestic revenue.

• Health & Welfare: Introduction of health insurance and a Tk 2,000 monthly allowance for employees with disabled children.

• Allowances: Tiffin allowance for grades 11-20 to rise from Tk 200 to Tk 1,000; Baisakhi allowance to increase from 20% to 50%.

• Pension Reform: A 100% increase for pensioners receiving less than Tk 20,000 per month, with tiered increases for higher brackets.

Currently, approximately 1.4 million officials and a total of 2.4 million beneficiaries (including MPO-listed teachers and bank staff) are paid under the 2015 scale. While the government has faced deficits in operating expenditures recently, experts believe improved tax efficiency and stabilized GDP growth will provide the necessary fiscal space for these long-awaited adjustments.