How we prove a payroll rule is right

There is no declared rate — the fund allocates what it actually earned

This is the single most important modelling fact, and it is where imported payroll software gets Bangladesh wrong. No statute, circular or gazette binds an interest rate, and none sets one. Labour Rules 2015 Rule 261 (বিধি ২৬১) distributes the fund’s actual realised investment earnings, allocated proportionately to members by time-weighted balance.

Rule 261 — Profit or interest. (1) The profit or interest earned from accounts of the provident fund shall be deposited proportionately into the accounts of every member at the end of the year. (2) The total profits deposited into members’ accounts shall be shown as expenditure of the provident fund. (3) The profit shall be deposited into the accounts of every member starting from the first day to the last day … and shall be deposited on a monthly basis for the incomplete periods.

So the computation is not balance × rate. It is: the fund earned X this year, divide X among members in proportion to their balance-days. A per-scheme interest rate is the wrong shape for Bangladesh — the input is a period earnings amount, and a rate is something you derive afterwards for reporting. Zetta is built that way round.

The rules we implement, and how sure we are

Rule 237(3) (বিধি ২৩৭(৩)) is the key one. The Rules are a binding default, not an absolute mandate: your own fund rules govern, and the Labour Rules apply only where your deed is silent. The widely-repeated claim that Bangladeshi PF interest is “entirely trust-deed determined” is wrong — the deed may override, but where it says nothing, Rule 261 binds.

Who must run a fund, and at what rate

A company-level trust, with no EPFO analogue: a board of trustees with equal employer and worker representation plus a government-nominated chairman (§264(4)–(5)), administration borne by the employer (§264(13)), and an annual audit at the establishment’s cost with accounts to the Director of Labour within a month (§264(14)–(15)). Since the substitution, the old mandatory ICB/government-securities investment list is repealed and §264(12) is permissive.

Forfeiture: the instruments conflict, and we follow the strictest

Four instruments disagree about what an employer may withhold. We implement the reading that protects the worker, because for a Labour-Act worker Rule 237(2) bars fund rules that conflict with Chapter XVII:

So Rule 263 prevails for a worker — forfeiture for misconduct is not authorised for Bangladeshi workers, whatever the tax statute and the 1925 Act contemplate. And there is no graded vesting in Bangladeshi law: it is a cliff, not a scale. A graded trust-deed scale is lawful only where it is more generous than the statutory cliff.

Tax recognition, and the fund’s own tax

ITA 2023, Second Schedule, Part 3, para 2 (S.R.O. 404-Law/2025, gazetted 16 October 2025): employer contributions in a year may not exceed the employee’s in that year and must be credited at intervals of no more than a year ¶2(c); the fund must vest in two or more trustees under an irrevocable trust ¶2(e); and the accumulated balance is payable on the day employment ceases ¶2(g).

ITA 2023 imposes no investment restriction and no interest rules whatsoever — no maximum creditable rate, no computation method, no crediting frequency for member interest. The one-year interval in ¶2(c) governs employer contributions, not interest. The commonly repeated “14.5% NBR ceiling” appears to be a government GPF/CPF rate rather than an NBR notification; we treat that as uncertain and do not implement it.

The fund itself is a taxable entity — private-sector funds file under s.166, with the headline rate reduced to a flat 15% on the fund’s investment income. The Sixth Schedule then exempts already-taxed income on distribution, so it is not double taxation, but it does reduce what is distributable — which matters precisely because Rule 261 allocates realised earnings.

Where the law is genuinely unclear

We would rather tell you this than be caught by it. Rule 261(1) credits profit “proportionately” — আনুপাতিক হারে — without naming the denominator; no day-count convention exists anywhere in the instruments; and Rule 263, Section 29, the Provident Funds Act 1925 s.6(b) and ITA 2023 ¶2(f) do not agree on forfeiture for misconduct. For an employee outside the Labour Act’s definition of “worker”, the position is unresolved.

The resolution is architecture, not a workaround. Rule 237(3) says your own fund rules govern and the Labour Rules apply only in their absence, and ITA 2023 ¶2(e) requires an irrevocable trust deed. So where the statute is silent or conflicting, your trust deed governs — and the system’s job is to implement the deed and show which authority produced each figure, not to quietly pick a reading of ambiguous law on your behalf.