Bangladesh Statutory social-insurance contributions

What this value means

BANGLADESH HAS NO CONTRIBUTORY SOCIAL-INSURANCE SYSTEM FOR ORDINARY PRIVATE-SECTOR EMPLOYEES. This is a refusal, not a gap in research. There is no payroll percentage to serve because no branch of social insurance is funded by a compulsory employer-and-employee contribution on wages. Specifically, there is NO contributory state pension, NO social health-insurance contribution, NO unemployment insurance, and NO work-injury insurance fund. Public health care is financed from general revenue; there is no national health-insurance premium of any kind. An engine that generates a Bangladeshi social-insurance deduction line is inventing it. WHAT DOES EXIST, AND UNDER WHAT LAW. 1. PROVIDENT FUND — CONDITIONALLY MANDATORY, NOT UNIVERSAL. Bangladesh Labour Act 2006, Chapter XVII, s. 264. The default is permissive: an establishment in the private sector MAY constitute a provident fund. It becomes COMPULSORY only on demand — s. 264(10) provides that "an establishment in the private sector shall constitute a provident fund for the benefit of its workers, if three-fourths of the total number of workers employed in it so demand to the employer by an application in writing", and s. 264(11) then requires the employer to make the constituting rules within six months and to have the fund operating before that period expires. Where a fund exists, s. 264(9) fixes the contribution: "Every permanent worker shall, after the completion of his one year of service in the establishment constituting the provident fund, subscribe to the fund, every month, a sum, unless otherwise mutually agreed, not less than seven per cent and not more than eight per cent of his monthly basic wages, and the employer shall contribute to it an equal amount." So the rate is 7%–8% of BASIC WAGES from the worker, MATCHED by the employer — but only in an establishment that has constituted a fund, and only for permanent workers who have completed one year of service. Three separate conditions must all be satisfied before a single taka is due. That is why no rate is served in current.value: the obligation is contingent on the establishment, not on the country. The fund must be held by a board of trustees with equal employer and worker representation and a government-nominated chairman (s. 264(4)–(7)); at least half the accumulations must be invested in ICB Mutual Fund certificates, ICB Unit certificates or government securities (s. 264(12)); the cost of maintenance and of the annual audit falls on the employer (s. 264(13)–(14)). Separate provident-fund regimes exist for TEA PLANTATION workers (s. 265) and NEWSPAPER workers (s. 273), which ARE compulsory for those sectors. 2. GRATUITY — AN EMPLOYER TERMINATION LIABILITY, NOT A CONTRIBUTION. Bangladesh Labour Act 2006, s. 2(x): "'gratuity' means wages payable on termination of employment of a worker which shall be equivalent to not less than thirty days' wages for every completed year of service or for any part thereof in excess of six months", and the section adds that "It shall be in addition to any payment of compensation or payment in lieu of notice due to termination of services of a worker on different grounds." This is a lump sum crystallising on termination and paid out of the employer's own funds. It is not deducted from wages, not remitted to any institution, and does not appear on a monthly payslip. It is an accrued liability for cost-of-employment purposes, not a payroll rate. 3. WORK INJURY — DIRECT EMPLOYER LIABILITY, WITH NO FUND AND NO PREMIUM. Bangladesh Labour Act 2006, Chapter XII, imposes compensation liability for injury by accident directly on the employer, on a scheduled-compensation basis. There is no national work-injury insurance fund and therefore no contribution rate. Separately, s. 99 requires certain establishments to maintain group insurance for their workers, and s. 19 provides that where a worker dies in service after not less than three years' continuous service the employer must pay compensation at thirty days' wages for every completed year of service, or gratuity if higher — with a proviso that where the worker "is covered by any compulsory insurance scheme of the establishment, or, if any compensation is payable for such death under chapter XII, the worker shall be entitled to whichever is higher." Any premium for such insurance is a commercial premium underwritten on the employer, not a statutory contribution rate. 4. WORKERS' PROFIT PARTICIPATION FUND — A LEVY ON PROFIT, NOT ON PAYROLL. Bangladesh Labour Act 2006, Chapter XV, requires qualifying companies to allocate a percentage of net profit to a Workers' Participation Fund and a Workers' Welfare Fund, with a share going to the Bangladesh Workers Welfare Foundation Fund established under the Bangladesh Workers Welfare Foundation Act 2006. This is assessed on company profits, not on wages, is payable annually rather than with payroll, and is deducted from no one's pay. It does not belong in a payroll contribution model and must not be converted into a notional payroll percentage. 5. THE UNIVERSAL PENSION SCHEME — REAL, NATIONAL, AND VOLUNTARY. The Universal Pension Management Act 2023 created a national pension scheme with several tracks, of which the PROGOTI (প্রগতি) scheme is the one designed for employees of private-sector institutions, with the employee paying half of the monthly subscription and the employing institution the other half. IT IS NOT COMPULSORY FOR PRIVATE-SECTOR EMPLOYERS OR EMPLOYEES. Enrolment is by registration, and take-up remains a rounding error against the national workforce — roughly 378,000 registrations across all four scheme tracks as at 30 May 2026, against a labour force in the tens of millions. Government policy in 2026 has been to push particular groups, notably scheduled-bank employees, into the Progoti scheme, and the stated target is to bring one member of each of some 40 million families into a scheme by 2030 — but as at this record's date there is no general statutory obligation on an ordinary private employer to enrol or to contribute. Because the subscription is a flat monthly amount chosen by the member rather than a percentage of wages, it would not yield a contribution rate even if it were compulsory. WATCH THIS ITEM: it is the most plausible route by which Bangladesh acquires a genuine contributory branch, and a change would be material. 6. AN EMPLOYMENT INJURY SCHEME PILOT EXISTS BUT IS NOT GENERAL LAW. A pilot employment-injury insurance scheme has operated for the ready-made-garment sector with international support. It is a sectoral pilot, not a statutory national branch, and confers no obligation on employers outside it. WHY current.value IS NULL RATHER THAN A LIST WITH NULL RATES. Every other country in this dataset has at least one branch under which every ordinary private-sector employer owes something on every payslip. Bangladesh has none. Serving a branch list with null rates would imply that an obligation exists but is merely unquantified; the truth is that for a typical Bangladeshi private-sector employee, the correct number of statutory social-insurance payroll lines is ZERO. The provident fund is the closest thing to an exception, and it is served in these notes with its exact statutory rate (7%–8% employee, matched by the employer, on basic wages) precisely so that an engine handling an establishment that HAS constituted a fund is not left guessing — but it must be modelled as an establishment-level flag, never as a country default. SUB-NATIONAL VARIATION: NOT APPLICABLE. The Bangladesh Labour Act 2006 applies nationally. There is no divisional or district payroll levy. The only differentiation is by SECTOR (tea plantations and newspapers have compulsory provident funds under ss. 265 and 273; export processing zones are governed by separate labour legislation) and by ESTABLISHMENT (whether a provident fund has been constituted) — never by location. WHAT WE DO NOT PUT A NUMBER ON, DELIBERATELY. (a) The Workers' Profit Participation Fund percentage — it is a share of net profit under Chapter XV, not a payroll rate, and converting it to a payroll equivalent would be a fabrication. (b) Group insurance premiums under s. 99 — commercially underwritten, no statutory tariff. (c) Universal Pension Scheme subscription amounts — member-elected flat sums, and in any event voluntary. (d) Export processing zone labour obligations — EPZ establishments fall under separate legislation which I did not examine. ALREADY LEGISLATED, NOT YET IN FORCE / WATCH LIST. (1) THE UNIVERSAL PENSION SCHEME IS THE ITEM TO WATCH. The Universal Pension Management Act 2023 provides the legal machinery for a national contributory pension, the Progoti track already has a 50/50 employee-employer structure, and government policy in mid-2026 is actively pushing private-sector groups into it. If enrolment is made compulsory for private employers, Bangladesh acquires its first genuine contributory branch and this record changes from a refusal to a rate. Re-verify at least every cycle. (2) Labour law reform has been under discussion, including proposals touching provident-fund obligations and an employment-injury scheme; nothing had been enacted that changes the position as at this record's date. (3) The Bangladesh Labour Act 2006 has been amended several times since enactment; the section numbering and the 7%–8% provident-fund band quoted here are from the ILO's published English text of the Act and should be checked against the latest consolidation before relying on them for a compliance decision. SOURCING. The provident-fund provisions (s. 264(9), (10), (11)), the gratuity definition (s. 2(x)) and the s. 19 death-compensation proviso are quoted VERBATIM from the International Labour Organization's published English text of the Bangladesh Labour Act 2006, read directly. The Universal Pension Scheme position, including the Progoti 50/50 structure and the registration figures as at 30 May 2026, is from the Universal Pension Authority's published material and contemporaneous Bangladeshi press reporting of the government's June 2026 directive on scheduled-bank employees; I did not open the text of the Universal Pension Management Act 2023. Chapter XII and Chapter XV are described from the Act's own table of contents and structure rather than from their full text. The central finding — that no compulsory contributory social-insurance branch exists for ordinary private-sector employees — is established both positively, from what the Act does provide, and negatively, from the absence of any contributory institution: Bangladesh has no counterpart to Pakistan's EOBI, India's EPFO or ESIC, or Sri Lanka's EPF.

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Other Bangladesh series: Policy Rate (Repo) · Value Added Tax (standard rate) · VAT registration threshold · Minimum Wage · Public Holidays · Consumer Price Inflation · Corporate Income Tax (standard rate) · Withholding tax rates · Statutory late-payment interest · Personal Income Tax (progressive bands)

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