The Finance Ministry has officially issued a gazette notification introducing the "Employment (Salaries and Allowances) Order 2026" announcing a massive pay hike for government employees and pensioners. Under the new structure basic salary for 1st to 10th-grade officials will increase by 100% and 11th to 20th-grade employees will see a 142% hike.
To manage the fiscal impact, the government will implement the salary hike in phases:
Phase 1 (July 1 to Dec 31, 2026): Employees in the 9th grade and above will receive 40% of their designated salary increase. Those in the 10th to 20th grades will receive 50%.
Phase 2 (Jan 1 to June 30, 2027): The disbursement will increase to 70% for 9th grade and above and 75% for 10th to 20th-grade employees.
Phase 3 (July 1, 2027): The full basic salary along with the annual increment will come into effect.
Phase 4 (Jan 1, 2028): All revised allowances under the new infrastructure will be fully implemented.
Since the order takes retrospective effect from July 1, 2026 all active officials and employees will receive their due arrears from that date.
Retirees and lifetime family pensioners are also included in the new order. They will benefit from a similar phased increase in their net pensions based on specific Taka slabs and will receive their respective arrears starting from July 1, 2026.
This phased approach aims to significantly improve the financial well-being of public servants and retirees while maintaining economic stability.
