How Gratuity Is Calculated in Bangladesh (Labour Act)
The Labour Act’s gratuity formula: which years count, when it is 30 or 45 days’ wages a year, which wage is used, and when you get gratuity instead of compensation, with worked examples.
Published 2 November 2026
The short answer
Under the Labour Act, gratuity is at least 30 days’ wages for every completed year of service, or part year over six months, at the last wage rate, and 45 days’ wages a year for service of more than 10 years. 8 years 7 months on ৳15,000 counts as 9 years: 9 × 30 × ৳500 = ৳1,35,000.
How the law defines gratuity
Section 2(10) of the Bangladesh Labour Act 2006 says (our translation of the Bangla text):
“Gratuity” means at least 30 days’ wages at the last wage rate for every completed year of a worker’s service, or for service of more than six months beyond that, or 45 days’ wages at the last wage rate for service of more than 10 years, payable to the worker when the employment ends.
The formula
Gratuity = years counted × days per year × daily wage
- Years counted: every completed year, plus one more if more than six months are left over. 8 years 7 months = 9 years; 8 years 5 months = 8 years.
- Days per year: at least 30; 45 if service is more than 10 years. Following the definition’s wording, we apply 45 days to every year counted.
- Daily wage: from the last wage rate. For job exit benefits, section 14(3) defines wages as the last monthly basic wage, dearness allowance and any ad hoc or interim wage. The Act doesn’t say how many days to divide the monthly wage by; use the number your employer uses (often 30 or 26).
Two examples
1. 8 years 7 months on ৳15,000
A basic wage of ৳14,000 plus ৳1,000 dearness allowance is ৳15,000; divided by 30, ৳500 a day. Years counted: 9 (7 months is more than six), under 10 years so 30 days a year: 9 × 30 × ৳500 = ৳1,35,000.
2. 12 years 7 months on ৳30,000
৳30,000 ÷ 30 = ৳1,000 a day. Years counted: 13, and service is over 10 years, so 45 days a year: 13 × 45 × ৳1,000 = ৳5,85,000.
When you get gratuity
- On retrenchment (section 20), discharge (22), termination by the employer (26) and death (19), the Act pays compensation “or gratuity, if payable, whichever is higher”.
- On resignation (section 27), service of 10 years or more earns 30 days’ wages a year or gratuity, whichever is higher; shorter service earns 7 or 15 days’ wages a year under the 2026 amendment. See what the Labour Act 2026 amendment changed.
- The Act says “if payable”: these sections don’t require every employer to have a gratuity scheme. Check whether your appointment letter or service rules provide gratuity.
To compare compensation and gratuity with your own wage and service, use the Job Exit Benefit Calculator.
Keep in mind
This is a general explanation of the law, not legal advice. Government employees’ pension and gratuity follow separate rules, so this isn’t for them. Your appointment letter, service rules and the courts decide.
Sources
- বাংলাদেশ শ্রম আইন, 2006, bdlaws (sections 2(10), 14(3), 19, 20, 22, 26, 27; Bangla)
- বাংলাদেশ শ্রম (সংশোধন) আইন, 2026 (2026 সনের 43 নং আইন), bdlaws (Bangla)
Read and checked on 2 November 2026.