We get how complicated WPPF calculations are and we hear business owners struggling with it regularly. Fortunately, WPPF calculations are much easier than most people think. Workers Profit Participation Fund, or WPPF, is a condition set down in Bangladesh’s Labor Law 2006 (section 232). According to labor legislation, a corporation must contribute 5% of its net profit to the Workers Profit Participation Fund, the Welfare Fund, and the Bangladesh Workers Welfare Foundation Fund in the ratio of 80:10:10. Every year, the payment for WPPF must be made within 9 months of the year’s end. Companies are not required to pay WPPF unless they fulfill one of the two requirements set out in section 232 of the Labor Act 2006. The two situations are as follows:1) The paid-up capital must be at least 1 crore taka on the last day of the accounting period2) The permanent asset of the company has a value of at least 2 crore taka at the conclusion of the accounting period Furthermore, if your company falls in the export-oriented industrial sector or in the foreign exchange investing sector, you are not required to separate funds for WPPF according to Section 232 of the Bangladesh Labor Act 2006. According to the legislation, every employee should be an equal recipient of the Workers Profit Participation Fund and is eligible to participate in it. However, employees who have not completed six (6) months of service within a fiscal year are not eligible to participate in the funds for that year. If your company is responsible for paying WPPF to the employees, make sure that there is a board of trustees created for the administration and management of the process. Furthermore, your company is allowed to utilize the funds that are kept aside for WPPF, but the Board of Trustees would have to approve this decision first. Lastly, any dispute that occurs between the Board and the company during the administration of the fund would be settled by the government as it is the ultimate decision-maker. Here is where Recom will make things easier for you. We understand how big of a pain compliance can be and we know how all these sections feel like a maze even after studying them for hours. Our people with decade-long experience will calculate everything for you, so that you can pay your workers, effectively and efficiently, before everyone else in the industry.
