Gazette issued, hikes phased, arrears undecided

The government has formally issued the gazette for the new national pay scale for public servants, ending months of uncertainty over revised salaries and pensions, but employees will have to wait for a separate decision on when their arrears will be paid. 

The Finance Division issued the Government Servants (Pay and Allowances) Order, 2026, on Thursday, September 17, providing for phased implementation of the new structure. A portion of the increased basic salary will take effect retrospectively from July 1, 2026, while the full increase will come into force from July 1, 2027.

According to the gazette, salaries will initially be fixed based on the basic salary drawn on June 30, 2026. From July 1 to December 31 this year, employees in Grade 9 and above will receive 40 percent of the total increase in basic salary, while those in Grades 10 to 20 will receive 50 percent.

The rates will rise to 70 percent and 75 percent respectively from January 1 to June 30, 2027. The full revised basic salary, including annual increments, will take effect from July 1, 2027.

The new structure provides increases ranging from 100 percent for the highest grade to 142 percent for the lowest grade. Allowances linked to basic salaries, however, will be implemented in full only from January 1, 2028.

Employees will be entitled to arrears from July 1, 2026, until the date of issuance of the order. However, the timing of payment remains undecided.

Finance Division Additional Secretary (Regulation and Implementation) Dilruba Shahina said the government would discuss the matter with officials responsible for the Integrated Budget and Accounting System (iBAS) before deciding how the arrears would be paid.

"The timing of payment of the arrears has not yet been decided. We will discuss the matter with those responsible for iBAS and take a decision soon," she said.

Asked whether the arrears would be paid in instalments, she said, "Let us first discuss the matter with iBAS. After that, we can say how the adjustment will be made."

iBAS is the government's digital platform for processing salaries and other financial transactions of public employees.

Pensioners will also receive revised net pensions in phases. From July 1 to December 31, 2026, those receiving Tk20,001 or more will get 40 percent of the total increase, while those receiving Tk1 to Tk20,000 will get 50 percent. The rates will rise to 70 percent and 75 percent respectively from January 1 to June 30, 2027, with the full revised pension taking effect from July 1, 2027.

Retired employees and lifelong family pensioners will also receive arrears from July 1, 2026, until the order's issuance.

The order further provides that employees retiring after completing post-retirement leave between July 1, 2026 and June 30, 2027 will have their gross and net pensions determined under the National Pay Scale 2026.

The Cabinet approved the proposal for the Ninth National Pay Scale on August 31. The phased implementation is intended to spread the financial burden of the revised salaries and pensions, while the government will need to arrange additional funds as the new structure takes full effect.