Bangladesh Gratuity Calculator
Calculate your end-of-service gratuity for Bangladesh. Free, accurate calculator based on Bangladesh labor laws.
Calculate Your Gratuity
Basic salary only (excluding allowances)
Last updated: August 2026 — based on the Bangladesh Labour Act, 2006 (as amended 2013, 2018).
This calculator provides an estimate for informational purposes only and does not constitute legal or tax advice. Actual entitlements depend on individual contracts, sector-specific rules, and current NBR/tax regulations.
About Bangladesh Gratuity
Gratuity in Bangladesh is governed by the Bangladesh Labour Act, 2006 (as amended in 2013 and 2018), specifically Section 2(10), which defines gratuity as wages payable to a worker on termination of employment, equal to at least 30 days' wages for every completed year of service — rising to 45 days' wages per year once the worker has completed more than 10 years of continuous service.
Gratuity applies to workers in the private sector — factories, commercial establishments, transport, and other industries covered by the Labour Act. Government employees are covered separately under public-service pension and gratuity rules, which are not covered by this calculator.
Importantly, under Bangladeshi law, a formal gratuity scheme is not itself mandatory for every employer. What the law guarantees is a statutory minimum benefit on separation — described in the Act as compensation — and if an employer's own gratuity policy pays out more than this statutory minimum, the higher amount applies. In practice, most established employers in Bangladesh do maintain a gratuity fund, and workers are entitled to whichever is higher between the company's gratuity and the Act's statutory compensation.
What is Gratuity in Bangladesh?
Gratuity is a lump-sum, end-of-service benefit paid by an employer to a worker on leaving employment — whether through resignation, retirement, termination, retrenchment, or death in service — once the worker has completed a minimum qualifying period of continuous service.
Under the Bangladesh Labour Act, 2006, the minimum qualifying period is generally one year of continuous service. Shorter minimums and different compensation rates apply in specific termination scenarios such as retrenchment or dismissal.
Gratuity is calculated on the worker's last drawn basic wage only — house rent, medical, transport, and other allowances are excluded. The benefit is paid in addition to any other payment the worker is owed, such as notice pay or earned leave encashment.
Gratuity is separate from provident fund contributions, and separate from any severance or retrenchment compensation that may also be owed — these are sometimes confused but are distinct entitlements.
Bangladesh Gratuity Calculation Formula
Formula
30 days' basic wages per year up to 10 years of service; 45 days' basic wages per year after more than 10 years (Bangladesh Labour Act, 2006 — Section 2(10))
- Up to 10 years: 30 days' wages (basic) per completed year. Simplified: Basic Salary × Years of Service
- More than 10 years: 45 days' wages (basic) per completed year. Simplified: Basic Salary × 1.5 × Years of Service
- Minimum 1 year of continuous service is generally required for eligibility
- Calculation uses basic salary only, not gross salary
- A partial year of service exceeding 6 months is typically counted as a full year for gratuity purposes
- Company policy may offer a higher rate than the statutory minimum — the employee is entitled to whichever is greater
Minimum service: 1 year
Is Gratuity Mandatory in Bangladesh?
Not exactly — this is one of the most misunderstood points about Bangladeshi gratuity law.
The Labour Act does not compel every employer to set up a formal gratuity scheme. What the Act does guarantee is a statutory compensation payment on separation (dismissal, discharge, retrenchment, and similar cases), calculated using rates similar to the gratuity formula.
If an employer has a gratuity policy, and it pays more than the statutory compensation, the worker receives the higher amount. If an employer has no gratuity policy at all, the worker is still entitled to the statutory compensation under the Act — so in practice, most workers are covered one way or another.
Is Gratuity Taxable in Bangladesh?
Under the Income Tax Ordinance, 1984, gratuity paid from a recognized or approved gratuity fund (approved by the National Board of Revenue, NBR) is generally tax-exempt up to BDT 25,00,000 (2.5 million). Amounts paid above this threshold from an approved fund may be taxable.
Gratuity paid from an unapproved fund, or paid directly by an employer without an NBR-approved fund structure, is generally fully taxable as income in the year received, regardless of amount.
This is general information, not tax advice — workers and employers should confirm current treatment with a tax advisor or the NBR, as thresholds and rules can be revised.
Gratuity Calculation Examples
Example: 8 Years of Service (30-day rate)
Basic Salary: BDT 30,000/month
Years of Service: 8 years
Calculation:
Service is 10 years or less, so the 30-day rate applies. Gratuity = 30,000 × 8 = BDT 240,000
Example: 12 Years of Service (45-day rate)
Basic Salary: BDT 30,000/month
Years of Service: 12 years
Calculation:
Service exceeds 10 years, so the 45-day rate applies to all years. Gratuity = 30,000 × 1.5 × 12 = BDT 540,000
Tips & Best Practices
📄 Keep Records
Maintain copies of your employment contract, appointment letter, basic-salary breakdown, salary slips, and service certificates — these are the documents you'll need to verify years of service and last-drawn basic salary if a gratuity dispute arises.
💰 Understand Your Salary Structure
Gratuity in Bangladesh is calculated on basic salary only. If your basic salary is not clearly broken out from your gross salary on your payslip, ask your employer (or HR) for a clear breakdown — this directly affects your gratuity amount.
🏭 Garments (RMG) Sector Note
Ready-Made Garments (RMG) sector workers are covered under the same Labour Act provisions as other private-sector workers, but wage structures in this sector are often set separately (for example via the Minimum Wage Board), which can affect what counts as basic wage for gratuity purposes. Workers in this sector should confirm their basic wage component specifically.
⚖️ Gratuity vs. Compensation vs. Provident Fund
These are three separate things. Gratuity is a service-based benefit, often via a company scheme, calculated on basic salary and years of service. Statutory compensation is the Labour Act's guaranteed minimum on separation, applicable even without a formal gratuity scheme. Provident Fund is a separate retirement savings benefit involving employer and employee contributions, not part of the gratuity calculation.