By Md Alam Hossain
Festival Bonus in Bangladesh, particularly Eid bonuses, are a crucial part of employee benefits in Bangladesh. As per the Bangladesh Labor Law 2006 (amended in 2013 and 2018), every worker is entitled to receive a festival bonus twice a year, typically during Eid-ul-Fitr and Eid-ul-Adha or other religious festivals based on the worker’s faith. This blog will guide you on how to calculate the festival bonus in Bangladesh.
Legal Framework for Festival Bonus in Bangladesh
The Bangladesh Labor Law 2006, under Section 111, states that permanent employees are entitled to a festival bonus in Bangladesh. The key legal provisions include:
- Employees working for at least one year with an employer are eligible.
- The bonus should be equivalent to the basic salary of one month.
- The bonus must be paid within the festival period.
- Temporary, contractual, and probationary employees may also receive bonuses depending on company policy.
How to Calculate the Festival Bonus?
Step 1: Determine the Basic Salary
The festival bonus is calculated based on the basic salary, which excludes allowances like house rent, medical, and conveyance.
Step 2: Eligibility Check
Employees must have completed at least one year of service to qualify. However, some companies provide prorated bonuses for employees who have worked for less than a year.
Step 3: Calculate the Bonus Amount
The general formula for the festival bonus is:
Festival Bonus = Basic Salary (1 Month’s Worth)
Example Calculation: If an employee’s monthly salary is BDT 25,000 with a basic salary of BDT 15,000, then the festival bonus would be:
Bonus = BDT 15,000
For employees who haven’t completed one year, some organizations may provide a prorated bonus based on service duration.
Special Cases & Considerations
- Part-time/Contractual Employees: May receive bonuses as per company policies.
- Resigned or Terminated Employees: Employees leaving before the festival may not receive the bonus unless specified in company policy.
- Tax Deduction: The festival bonus is usually subject to tax deductions if it exceeds the exempted limit under Bangladesh Income Tax laws.
When Should the Festival Bonus Be Paid?
As per labor law, employers must pay the festival bonus before the festival to ensure employees can use it for celebrations. Most companies disburse the bonus within 7-10 days before Eid or any other religious festival.
Conclusion
Festival bonus in Bangladesh are a legal entitlement for workers, ensuring financial support during major celebrations. Employers should adhere to the Bangladesh Labor Law when calculating and disbursing bonuses to ensure compliance and maintain employee satisfaction.
For HR professionals and employers, timely and accurate festival bonus calculations will not only ensure legal compliance but also contribute to a motivated and engaged workforce.
About the Author
Md Alam Hossain is an industry expert with extensive experience in RMG workforce management and operational efficiency. His practical approaches have helped numerous garment manufacturers improve attendance rates and workplace satisfaction.
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