Provident fund is a monetary benefit through which a company provides employees with payments when they leave their place of employment. The primary purpose of Provident Fund (PF) is to help employees save a fraction of their salary every month so that he can use the same in an event that the employee is temporarily or no longer fit to work or at retirement. Employers and Employees both contribute of wages in contribution accounts.
The Gratuity amount depends upon the tenure of service and last drawn salary, traits with employer-provided pension funds. This is mainly paid to the employee as a token of appreciation for his/her services towards the company. In Bangladesh, the provision for Gratuity Fund is contained in the Bangladesh Labor Act 2006 (2006 Act) and is defined under section 2(10) as wages. Gratuity fund is not mandatory in Bangladesh.