Gratuity Calculator (Bangladesh)
Updated November 2026 · Free · No sign-up
Calculate gratuity in Bangladesh — where schemes exist: 30 days’ wages per completed year (45 days/year beyond 10 years) at the last drawn rate, per the Labour Act’s definition.
Quick answer: The Labour Act 2006 defines gratuity as 30 days’ wages per year of service — 45 days per year for service beyond 10 years — at the last-drawn rate. It applies where employers maintain gratuity (policy/practice); otherwise the Act’s termination benefits fill the role.
The Definition and the Catch
Section 2(10): gratuity = 30 days’ wages per completed year (plus 45 days/year for every year beyond ten), on cessation — but the Act makes gratuity apply where the establishment provides it (scheme/policy/practice). No scheme? The Act’s TERMINATION benefits (30 days/year compensation patterns by exit type) apply instead — which is why RMG settlements argue the categories.
Worked Examples
Example 1 — 12 years, Tk 60,000. First 10: 10 × 30 days (Tk 600,000... at daily 2,000: 600k) + 2 years × 45 days (180,000) = Tk 780,000.
Example 2 — rounding. 7 years 8 months → 8 years; the 6-month rule is statutory here.
Example 3 — no-scheme employer. Retrenchment without a gratuity scheme: the Act’s retrenchment compensation (30 days/year) delivers similar money through a different section — categorize the exit correctly.
Tax
Gratuity is exempt up to Tk 2.5 crore under the Income Tax Act (government/approved funds fully per rules) — effectively tax-free for almost everyone.
Practice Notes
Wages = basic + dearness per the definition; festival bonuses exclude. Resignation after 10 years keeps full-rate entitlement where schemes exist (5-10 years: half by some scheme designs — read yours). Claims ride labour-court settlement with the final-dues stack.
Frequently Asked Questions
How is gratuity calculated in Bangladesh?
30 days’ last-drawn wages per completed year — rising to 45 days per year for service beyond 10 years; 6+ month fractions count as full years.
Is gratuity mandatory in Bangladesh?
It applies where the establishment maintains it (scheme/policy/practice); otherwise the Labour Act’s termination-benefit sections provide parallel compensation.
Is Bangladeshi gratuity taxable?
Exempt up to Tk 2.5 crore — effectively tax-free for nearly all employees.
What wages count?
Basic plus dearness allowance per the Act’s definition — festival bonuses and overtime exclude.
What about service over 10 years?
Years beyond ten earn 45 days each — a 15-year career pays 10×30 + 5×45 = 525 days of wages.
✓ Formula verified • Last updated: November 3, 2026