The 9th National Pay Scale: Arrears Arithmetic, the Allowance Freeze, and the First Disbursement Tranche
Situation
The Finance Division issued the Public Service (Pay and Allowances) Order, 2026, also cited as the Jobs (Salary and Allowances) Order, 2026, the 9th National Pay Scale, on September 17, 2026, following Cabinet approval on August 31, 2026 [Finance Division, Ministry of Finance, September 17, 2026; The Daily Star, September 17, 2026]. Formal gazette distribution and the comprehensive gazette orders followed on September 19, 2026 [The Business Standard, September 19, 2026]. The order applies retrospectively from July 1, 2026, and arrears accrued from July 1, 2026 to the gazette issuance date must be paid with the upcoming salary [The Daily Star, September 17, 2026].
Two features create immediate operational exposure rather than a routine payroll uplift. Existing special allowances terminate, and any special allowance drawn between July 1, 2026 and the gazette date is adjusted against accrued arrears [The Business Standard, September 19, 2026]. Separately, the basic pay rise is phased across four steps while allowances are frozen at the June 30, 2026 drawn rates through December 31, 2027, with all revised allowances, including house rent, taking full effect only on January 1, 2028 [The Daily Star, September 17, 2026]. Payroll offices must therefore compute net arrears, not gross, and operate the phased basic pay rates alongside allowances frozen at the June 30, 2026 drawn rates.
Evidence
Grade 20, the lowest grade, moves to a basic salary of Tk 20,000 from Tk 8,250 in the December 2015 gazette, an increase of 142.42% [The Daily Star, September 17, 2026; December 2015 gazette, December 2015]. Grade 1, the highest regular grade, moves to Tk 156,000 from Tk 78,000, an increase of 100.0% [The Daily Star, September 17, 2026; December 2015 gazette, December 2015]. The Cabinet Secretary, the Principal Secretary to the Prime Minister, and equivalent posts are set at Tk 172,000, against a 2015 baseline of Tk 86,000 [The Business Standard, September 19, 2026; December 2015 gazette, December 2015]. The 20-grade civil service framework is retained [The Daily Star, September 17, 2026]. Basic salaries for Grades 1 to 10/11 double, up to 100%, while Grades 12 to 20 rise by 115% to 142% [The Daily Star, September 17, 2026].
The phase table is the core execution risk. In Phase 1, from July 1, 2026 to December 31, 2026, Grades 10 to 20 receive 50% of the total basic salary increase and Grades 1 to 9 receive 40% [The Daily Star, September 17, 2026]. In Phase 2, from January 1, 2027 to June 30, 2027, those shares rise to 75% and 70% respectively [The Daily Star, September 17, 2026]. From July 1, 2027, the full 100% revised basic pay takes force across all 20 grades with standard annual increments [The Daily Star, September 17, 2026]. From January 1, 2028, revised allowances take full effect [The Daily Star, September 17, 2026].
House rent rates are set by locality. Dhaka North and Dhaka South City Corporations pay 60% for Grades 16 to 20, 50% for Grades 10 to 15, 45% for Grades 5 to 9, and 40% for Grades 1 to 4 and above [The Business Standard, September 19, 2026]. Other city corporations and the Savar and Cox's Bazar municipalities pay 50%, 40%, 35%, and 30% on the same grade ladder [The Business Standard, September 19, 2026]. All other areas pay 45%, 35%, 30%, and 25% [The Business Standard, September 19, 2026].
One advance increment is available to appointees holding MBBS, Bachelor of Architecture, recognized engineering degrees, or medical faculty licences, and two to holders of an engineering or architecture degree, a physical planning degree with a master's, or an LLB (Honours) with a postgraduate degree [The Business Standard, September 19, 2026]. Pension slabs are updated to between Tk 18,000 and Tk 70,200 monthly, with slab-based net pension increases of 55% to 100% [The Business Standard, September 19, 2026]. A monthly allowance of Tk 3,000 is provided for government employees' children with special needs [The Daily Star, September 17, 2026]. One Rank One Pension is to be phased in, targeting full implementation by 2030 [Dhaka Tribune, August 31 / September 2026]. Full implementation adds an estimated Tk 1,06,000 crore annually, and the initial disbursement phase requires approximately Tk 44,000 crore [The Business Standard, September 19, 2026; Dhaka Tribune, August 31 / September 2026].
Prescription
- The Finance Division should issue, within the current salary cycle, a mandatory arrears computation and adjustment worksheet. The worksheet should start from the difference between the 2026 scale and basic pay drawn on June 30, 2026, net off special allowances drawn between July 1, 2026 and the gazette date, and produce a signed per-employee net arrears figure before any disbursement [The Daily Star, September 17, 2026; The Business Standard, September 19, 2026]. Chief Accounts Officers should certify each figure.
- The Finance Division, with the Controller General of Accounts, should pre-fund the initial disbursement phase of approximately Tk 44,000 crore through a dedicated monthly release line and publish a multi-year appropriation schedule for the Tk 1,06,000 crore annual cost at full implementation [Dhaka Tribune, August 31 / September 2026; The Business Standard, September 19, 2026]. A separate budget head keeps transition costs from crowding out operational releases in FY 2026-27.
- The Ministry of Public Administration should code the full four-phase rate table into the centralized payroll before the Phase 2 switch on January 1, 2027, including the 50% and 40% and the 75% and 70% grade splits and the locality bands for house rent [The Daily Star, September 17, 2026; The Business Standard, September 19, 2026]. Manual payroll edits should be frozen, with district-level reconciliation before each phase change.
- The Ministry of Public Administration, with the Finance Division, should notify every ministry and department in writing that special allowances terminate, that allowances remain frozen at the June 30, 2026 drawn rates through December 31, 2027, and that revised house rent rates take effect on January 1, 2028, with explicit recovery rules for allowances continued in error [The Daily Star, September 17, 2026].
- The Cabinet Division and the Ministry of Public Administration should publish degree-verification rules for the one and two advance increment categories, and a dated phasing roadmap for One Rank One Pension toward full implementation by 2030, together with the pension slab table from Tk 18,000 to Tk 70,200 [The Business Standard, September 19, 2026; Dhaka Tribune, August 31 / September 2026].
Risks and tradeoffs
Net arrears will fall short of gross expectations for employees who drew special allowances between July 1, 2026 and the gazette date, because the order requires adjustment against arrears [The Business Standard, September 19, 2026]. Without a standard worksheet, that shortfall lands as counter-level grievance rather than a payroll entry.
The allowance freeze through December 31, 2027 means basic pay gains are unmatched by housing relief until January 1, 2028 [The Daily Star, September 17, 2026]. Employees in Dhaka North and Dhaka South face the sharpest timing gap, since their eventual house rent entitlement of 60% for Grades 16 to 20 is the highest band but is deferred [The Business Standard, September 19, 2026].
The binding constraint is fiscal, not administrative. The initial phase requires approximately Tk 44,000 crore, full implementation adds an estimated Tk 1,06,000 crore annually, and pension slabs run from Tk 18,000 to Tk 70,200 with net pension increases of 55% to 100% [Dhaka Tribune, August 31 / September 2026; The Business Standard, September 19, 2026].
Locality compression is a second constraint: a Grades 1 to 4 officer in a district posting receives 25% house rent against 40% in Dhaka North and Dhaka South, which will create transfer and posting pressure [The Business Standard, September 19, 2026]. Finally, four phases, 20 grades, and the locality bands must be coded correctly; a mis-set rate in Phase 1 compounds into every later correction.
Bottom line
The 9th National Pay Scale is gazetted and effective retrospectively from July 1, 2026, so the immediate task is arithmetic discipline: net arrears after special allowance adjustment, pre-funded at approximately Tk 44,000 crore, and coded into payroll before the Phase 2 switch on January 1, 2027 [The Daily Star, September 17, 2026; The Business Standard, September 19, 2026; Dhaka Tribune, August 31 / September 2026]. The medium-term constraint is the estimated Tk 1,06,000 crore annual cost at full implementation, which needs an explicit appropriation path rather than silent absorption into FY 2026-27 [The Business Standard, September 19, 2026].