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Benefits and Entitlements Overview

Learn about mandatory and optional employee benefits in Bangladesh

Mandatory benefits

In Bangladesh, the Labor Act outlines a set of mandatory employee benefits designed to ensure a minimum level of security and well-being for the workforce. Employers are required to comply with these regulations to maintain a legal and ethical work environment.

Paid Leave Entitlements

There are several categories of paid leave mandated by law in Bangladesh:

  • Annual Leave: The entitlement to annual leave varies depending on the specific industry and the employee's tenure. Here's a breakdown:
    • Industrial establishments, shops, commercial establishments, factories, and road transport establishments: 1 day of paid leave for every 18 days worked.
    • Tea plantations: 1 day of paid leave for every 22 days worked.
    • Newspaper establishments: 1 day of paid leave for every 11 days worked.
  • Festival Holidays: All employees are entitled to 11 days of paid leave for government-declared national holidays each year. The specific holidays chosen are determined by the employer.
  • Casual Leave: All employees are entitled to 10 days of paid casual leave per calendar year.
  • Sick Leave: Employees are generally entitled to 14 days of paid sick leave per year. However, this is an annual entitlement and cannot be carried forward to the following year. A medical certificate is required to claim sick leave and pay.

Maternity Leave

Bangladesh offers mandated maternity leave benefits for female employees. Here's a breakdown of the entitlement:

  • Maternity Leave Duration: Employees are entitled to 16 weeks (4 months) of maternity leave with full pay.

Other Mandatory Benefits

  • Overtime Compensation: When employees work beyond the standard working hours, they are entitled to overtime compensation as mandated by law. The specific calculation of overtime pay varies depending on the industry and working conditions.

Optional benefits

In Bangladesh, many employers go beyond the mandatory benefits outlined in the Bangladesh Labor Act, offering additional perks and programs to attract and retain top talent.

Health and Wellness Benefits

  • Health Insurance: Health insurance is a popular benefit offered by many employers in Bangladesh to cover medical expenses for employees and, sometimes, their dependents.
  • Dental and Vision Insurance: Some employers may extend health coverage to include dental and vision insurance plans to provide more comprehensive healthcare support.
  • Employee Assistance Programs (EAPs): Offering confidential counseling and support services for personal or work-related issues can contribute to employee well-being and a positive work environment.

Financial Security Benefits

  • Provident Funds: These employer-sponsored savings plans can help employees accumulate funds for retirement or other long-term goals. Contributions may be shared between the employer and the employee.
  • Gratuity Payment: Some employers offer gratuity payments as a lump sum upon an employee's retirement, resignation, or termination after a certain period of service.

Work-Life Balance Benefits

  • Flexible Work Arrangements: This could include flexible working hours, remote work options, or compressed workweeks to offer employees more control over their schedules and enhance work-life balance.
  • Childcare Assistance: Employers might offer childcare subsidies or on-site childcare facilities to support working parents.

Other Optional Benefits

  • Transportation Allowances: To offset commuting costs, some employers may provide transportation allowances or even company-sponsored transportation services.
  • Meal Vouchers or Subsidized Meals: Offering subsidized meals or meal vouchers at the workplace can be a convenient perk for employees.
  • Employee Discounts: Negotiated discounts on various products or services can be a valuable benefit for employees.
  • Training and Development Opportunities: Investing in employee training and development programs demonstrates a commitment to employee growth and fosters a culture of learning.

The specific benefits offered by an employer in Bangladesh will depend on various factors like industry size, location, and company culture. However, these examples highlight some of the most common optional benefits that employers leverage to create a more attractive and competitive employee value proposition.

Health insurance requirements

In Bangladesh, health insurance is not a legal requirement for employees. However, it is increasingly common for employers to include health insurance plans in their comprehensive employee benefits packages to attract and retain top talent.

While there are no compulsory requirements, certain industries may have specific health insurance guidelines as part of their sectoral regulations. It is recommended to consult relevant industry bodies or regulatory authorities for any specific health insurance requirements applicable to your profession or workplace.

Employer-Sponsored Plans

Many multinational companies and large Bangladeshi organizations offer health insurance benefits as a standard part of their employee compensation package.

Individual Coverage

Employees also have the option to purchase individual health insurance plans from private insurance providers in Bangladesh.

Future Considerations

The Bangladesh government has considered the idea of implementing mandatory health insurance schemes. In 2018, a proposal for a national health insurance program was presented. While this has not yet been implemented, such initiatives indicate a potential shift towards mandatory health insurance in the future.


Even though it's not mandatory, having health insurance provides financial security in case of medical emergencies. Employees in Bangladesh should consider health insurance options, either through employer-sponsored plans or individual policies, to protect their well-being and financial security.

Retirement plans

Retirement security in Bangladesh has traditionally relied on the informal support system of families. However, the landscape is evolving with the introduction of new programs and a growing emphasis on individual retirement planning.

Universal Pension Scheme (UPS)

In 2023, Bangladesh introduced a groundbreaking initiative - the Universal Pension Scheme (UPS). This voluntary scheme aims to provide a lifetime monthly pension benefit for citizens working in the private sector upon retirement.


  • Open to Bangladeshi citizens aged 18 to 50 working in the private sector (within or outside the country). The government may make participation mandatory in the future.
  • Those over 50 can participate under special conditions.

Key Features:

  • Voluntary Participation: Employees choose to participate and contribute to their individual accounts.
  • Contribution Rates: Specific contribution rates are still to be determined by the government. Contributions can be made monthly or quarterly.
  • Investment and Returns: Funds will be managed centrally with investment returns allocated to individual accounts.
  • Benefits:
    • A lifetime tax-free monthly pension benefit is available upon reaching retirement age (60 years) with a minimum of 10 years of contributions.
    • Those joining after 50 would still be subject to the 10-year contribution requirement.


The program is overseen by a national pension authority and a governing body with representatives from the government, businesses, and labor. The exact launch date is yet to be determined but is expected to be sometime in 2023.

Provident Funds

Provident funds are another option for retirement savings in Bangladesh. These are employer-sponsored retirement plans where both employers and employees contribute a portion of the employee's salary towards a retirement corpus.

Key Features:

  • Employer Participation: Companies are required to offer a provident fund if at least three-quarters of their workforce request it in writing. All companies in designated Export Processing Zones must-have provident funds.
  • Contribution Rates: Contribution rates are typically determined by a company's internal policy or through a collective bargaining agreement.
  • Benefits: The accumulated amount in the provident fund along with accrued interest is typically paid out to the employee upon retirement, resignation, or termination after a certain period of service.

Individual Investment Plans

Beyond employer-sponsored plans, individuals can invest in various retirement planning instruments offered by financial institutions in Bangladesh, such as:

  • Unit-Linked Insurance Plans (ULIPs): These combine insurance coverage with investment options, allowing for potential growth of retirement savings.
  • Mutual Funds: Investing in mutual funds with a long-term horizon can be a strategy for accumulating retirement corpus.
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