Employer of Record in Bangladesh

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Effortless hiring in

Bangladesh

Bangladesh, nestled in South Asia, is known for its lush greenery and the vast Sundarbans mangrove forest, home to the endangered Bengal tiger. The country is one of the world’s largest producers of textiles and garments. Rich in history, Bangladesh is the site of ancient Buddhist monasteries such as Paharpur and has a deep-rooted cultural identity expressed through its music, poetry, and festivals like Pohela Boishakh, the Bengali New Year. The Padma, Jamuna, and Meghna rivers dominate its landscape, shaping its agrarian economy and lifestyle.

Languages

Bengali

Population

168 Million

Capital City

Dhaka

Currency

Bangladeshi Taka (BDT)

Cost of living ranking

117th

VAT (Value Added Tax)

15%

Hiring in

Bangladesh

Employment Laws

The Bangladesh Labour Act, 2006, along with its subsequent amendments, governs labor relations in Bangladesh, encompassing worker rights, working conditions, minimum wage, overtime, and employment termination.

Onboarding Process

Employers typically require:

A written employment contract detailing job responsibilities, compensation, and terms of employment.
Verification of the employee's age to ensure compliance with the minimum employment age of 14 years.
Collection of personal identification documents and tax identification numbers.

Types of Employment Contracts

Permanent Contracts: Indefinite duration with full benefits.
Fixed-Term Contracts: Employment for a specified period or project.
Temporary Contracts: Short-term assignments, often for specific tasks.

Payroll Management in

Bangladesh

Payroll Frequency

Employees are generally paid on a monthly basis, with payments typically made on or before the last day of the month.

Minimum Wage

The minimum wage varies by industry and job classification. As of January 1, 2024, the minimum wage is approximately 78 BDT per hour, amounting to around 12,500 BDT per month for a standard 40-hour workweek.

Payroll Deductions

Income Tax: Progressive tax rates ranging from 0% to 25%, depending on income levels.
Social Security Contributions: While Bangladesh has a social security system, employers and employees are not required to make contributions to it.
Other Deductions: May include provident fund contributions and professional taxes, depending on company policy and employee agreements.

Taxation in

Bangladesh

Employee Income Tax

The tax year runs from July 1 to June 30. Employers are required to withhold income tax when making payments to employees. Income tax is imposed on residents based on progressive tax rates ranging from 0% to 25%. Non-residents (excluding Bangladeshi non-residents) are taxed at a flat rate of 30%.

Employer Contributions

There are no mandatory employer contributions to social security in Bangladesh.
Employers may voluntarily establish provident fund schemes, contributing a portion of the employee's salary.

Leave in

Bangladesh

Types of Leave in Bangladesh

Annual Leave

Employees are entitled to annual leave with wages, typically ranging from 14 to 18 days depending on industry standards.

Casual Leave

Employees are entitled to 10 days of casual leave per year.

Sick Leave

Employees receive up to 14 days of sick leave per year with a medical certificate.

Festival Holidays

Employees are entitled to up to 11 days of paid festival holidays per year.

Maternity Leave

The Bangladesh Labour (Amendment) Bill, 2023 increased maternity leave to 120 days from the previous 112 days.

Benefits in

Bangladesh

Mandatory Benefits

Employers must provide maternity leave as stipulated by law.
Festival bonuses are common in many industries, often equivalent to a month's salary, though not mandated by law.

Supplemental Benefits

Employers may offer additional benefits such as health insurance, transportation allowances, and housing provisions to attract and retain talent.

Termination in

Bangladesh

Process

Termination can occur through various methods including dismissal for misconduct, retrenchment, or redundancy. Employers must provide written notice and adhere to due process, including the opportunity for the employee to respond to allegations in cases of misconduct.

Notice Period

For permanent workers:
120 days for monthly-rated workers;
60 days for others.
For temporary workers:
30 days for monthly-rated workers;
14 days for others.

Severance Pay

For permanent workers, severance compensation is due at the rate of 30 days' wages for every completed year of service or gratuity, whichever is higher.

ON THIS PAGE

Overview

Hiring

Payroll

Taxes

Leave

Benefits

Termination

Employment Laws

Onboarding Process

Types of Employment Contracts

Payroll Frequency

Minimum Wage

Payroll Deductions

Employee Income Tax

Employer Contributions

Types of Leave in Bangladesh

Mandatory Benefits

Supplemental Benefits

Process

Notice Period

Severance Pay

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