Government employees to receive special allowance starting July

The interim government has announced a special allowance for government employees, effective from 1 July, according to a circular issued by the Finance Division under the Ministry of Finance on Tuesday.

Under this new provision, employees in Grades 1 through 9 will receive an allowance equivalent to 10 percent of their basic salary, while those in Grades 10 through 20 will receive 15 percent.

The allowance will be no less than Tk 1,000 for active government employees and Tk 500 for pensioners.

This benefit will cover civil government employees under the national pay scale, as well as staff of autonomous and state-owned bodies, banks, insurance and financial institutions, Border Guard Bangladesh (BGB), and the police. Pensioners whose pensions have been reinstated will also qualify.

Finance Adviser Salehuddin Ahmed proposed the allowance during the presentation of the 2025–26 national budget on Monday, citing the lack of a revised pay structure since 2015 as the rationale for the initiative.

Although a dearness allowance had been widely anticipated, it has not been implemented in name. Instead, this special allowance has been introduced as a substitute. “We are actively considering a dearness allowance,” Salehuddin previously told reporters. “A committee has been assigned to look into it. There’s a good chance, but it may take time.”

According to the circular, employees on post-retirement leave (PRL) will receive the allowance based on their last drawn basic salary prior to PRL. Pensioners receiving reinstated pensions will be paid according to their current retirement grade.

However, retirees who opted for a one-time pension gratuity and are not yet eligible for reinstatement will not qualify for the special allowance. Employees currently on unpaid leave will also be excluded from the benefit.