Last updated:
June 16, 2026
Introduction
Most companies hire in Bangladesh for the large, young, cost-competitive workforce, strong in garments, IT, and increasingly in services. Then they meet the paperwork. Wages must be paid in taka. Contracts have to satisfy the Labour Act 2006. Two festival bonuses a year are effectively expected, and the tax side runs through the NBR with its own slabs, withholding rules, and a 15% VAT.
This is where an employer of record in Bangladesh earns its place. An EOR is a local company that becomes the legal employer of your staff, taking on payroll, tax withholding, and statutory compliance while your team manages the actual work. No RJSC registration, no trade licence, no waiting months to open an entity.
Below, we walk through hiring and contracts, working hours and leave, payroll and taxes, work permits for foreign hires, termination, and when an entity beats an EOR.
Bangladesh at a glance
Population: 175.7 million
Currency: Bangladeshi Taka (BDT)
Capital city: Dhaka
Languages spoken: Bengali
GDP: USD 450.12 billion
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Talk to an expertEmployment in Bangladesh
Bangladesh's employment laws are governed by the 2006 Labor Act and the 2015 Labor Rules Control. These laws apply to all employees working in commercial and industrial companies and specify the working hours, weekly holidays, medical leaves, and yearly leaves.
Setting up a local business entity in Bangladesh can be an expensive, cryptic, and tedious task.
Bangladesh’s labor rules and laws protect the employees, which requires more dedication on the part of the employer to specific sectors and broad knowledge about the prevalent local practices.
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Entitlement
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Detail
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Working hours
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8 hours per day, 48 hours per week. Breaks: 1 hour for work over 6 hours, 30 minutes for over 5 hours, and both (or two 30-minute breaks) for over 8 hours.
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Overtime
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Total hours including overtime cannot exceed 10 per day or 60 per week, averaging 56 per week across the year. Overtime is paid at twice the ordinary rate of basic wage, dearness allowance, and any ad-hoc wage. Work on a weekly holiday is paid at double the regular hourly wage.
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Night work (women)
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Women generally cannot be assigned work between 10 PM and 6 AM without their written consent.
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Casual leave
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10 days per calendar year with full wages. Cannot be accumulated or carried forward.
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Sick/medical leave
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14 days per calendar year with full wages, on a registered medical practitioner's certificate. Cannot be accumulated (newspaper workers excluded).
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Festival holidays
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11 paid festival holidays per calendar year. Working on one earns two compensatory holidays with full pay plus a substitute holiday.
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Weekly holiday
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One day off per week (factory); 1.5 days for shops/commercial/industrial establishments; one 24-hour day for road transport workers.
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Maternity leave
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16 weeks total (8 before and 8 after delivery) at full average wages, for women with at least 6 months' service. Not payable to a woman with two or more surviving children at confinement. Termination within 6 months before and 8 weeks after delivery, without sufficient cause, does not strip maternity benefits.
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Miscarriage leave
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4 weeks of leave without wage deduction, not adjusted against other leave.
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Festival bonus
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Two festival bonuses per year, each not exceeding one month's basic salary, for employees with at least one year of continuous service.
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Contractors vs full-time employees
In Bangladesh, workers who function based on different contracts independently are known as contractors. Contractual workers pay their own taxes and manage their work independently. On the other hand, full-time employees take orders and instructions from the employer and receive many employment perks from their company for working full-time.
Before hiring either full-time employees or contractors, it’s vital to know how either of the positions is suitable for your business structure if the project duration is long or short, depending on the nature of the tasks. For example, accounting and promoting employees are critical tasks in any organization, and these separate departments also require close supervision. In such cases, it is better to employ full-time workers for these tasks.
Similarly, it’s cheaper to employ contractors as they are more spontaneous, and the work is done according to the contract. However, employers generally have less control over contractual workers. These workers schedule their own routines and are sometimes less interested in working for a single company as they’re bound to their contracts with multiple employers. Given the temporary nature of the employment, such workers have a lesser chance of bringing forth lawsuits against the employer.
Classifying a worker as a contractor or a full-time employee in Bangladesh changes your obligations. Full-time employees are entitled to statutory leave, festival bonuses, and provident fund participation under the Labour Act 2006, while contractors manage their own taxes. Getting the call wrong creates misclassification exposure.
Skuad supports both hiring models from a single platform:
EOR for full-time employees
- Acts as the legal employer across 160+ countries, so you can hire without setting up a local entity
- Supports employment contract generation aligned with local labor laws across supported markets
- Facilitates statutory contribution workflows covering applicable benefits and deductions
- Supports payroll processing in 70+ currencies with tax withholding and statutory deductions
- Assists with termination and offboarding, including notice periods and final settlements as required locally
Contractor management
- Helps onboard contractors with locally compliant agreements that reduce misclassification exposure
- Supports invoice generation, approval workflows, and payment processing across supported markets
- Helps flag classification risk early with built-in worker classification checks
- Facilitates multi-currency payouts across 70+ currencies with no manual reconciliation
- Helps manage contractor records, contracts, and payment history from one dashboard alongside full-time employees
Full-time or contractor. Skuad supports both. See pricing
Hiring in Bangladesh
According to Bangladeshi laws, the employer must draft a contract of employment that covers all the details, ranging from the employee’s salaries and compensation rates to benefits. These details must be listed in Bangladeshi Taka as different currencies might not be accepted. There is no one way of hiring employees in Bangladesh.
Whether contractual or fixed-term, hiring workers depends largely on the organization’s priorities and business strategy, and each has a different set of requirements to be covered in the contracts.
Probation and termination
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Topic
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Detail
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Probation period
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Usually 6 to 9 months; the worker is confirmed as permanent and entitled to admissible benefits on completion. Permanent employment is open-ended and requires valid reasons for dismissal.
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Dismissal for misconduct (Sec. 23)
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Allowed without prior notice or pay in lieu for gross misconduct (theft, fraud, habitual absence, insubordination). A formal show-cause notice and a proper domestic inquiry are legally mandatory first. No compensation.
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Discharge (Sec. 22)
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For physical or mental incapacity or continued ill-health, certified by a registered medical practitioner. Worker gets 30 days' wages per completed year of service, or gratuity, whichever is higher.
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Retrenchment (Sec. 20)
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For redundancy (excess staff). Requires one month's written notice stating reasons (or pay in lieu) plus 30 days' wages per completed year of service.
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Termination simpliciter (Sec. 26)
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Termination of a permanent worker without assigning a reason, on written notice of 120 days (monthly-rated workers) or 60 days (others), or pay in lieu. Worker gets 30 days' wages per completed year of service, or gratuity, whichever is higher.
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Resignation (Sec. 27)
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A permanent employee resigns on 60 days' written notice; temporary workers give 30 days (monthly-rated) or 14 days (others), or pay in lieu of the unserved notice.
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Resignation benefits
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An employee who resigns properly with at least 5 years of continuous service gets 14 to 30 days' wages per completed year of service, depending on tenure.
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Compensation for death (Sec. 19)
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Death in service after 2+ continuous years: 30 days' wages. Death at work or following a workplace accident: 45 days' wages per completed year (or part over 6 months), or gratuity, whichever is higher, paid to the nominee or dependent, in addition to retirement benefits.
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Gratuity
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30 days' wages per year of service for under 10 years; 45 days per year for over 10 years. On death, retrenchment, discharge, or termination, the worker gets gratuity or the relevant compensation, whichever is higher.
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Grievance before Labour Court (Sec. 33)
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A worker must first submit a written grievance to the employer within 30 days of the cause; the employer must respond within 30 days; the worker then has 30 days to file in the Labour Court.
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Terminating an employee in Bangladesh carries legal exposure, such as notice periods that vary by category under the Labour Act 2006, compensation of one month's pay for each year of service, and five distinct termination procedures, each with its own requirements.
Skuad helps you stay aligned with these rules through local EOR infrastructure, so your team doesn't have to interpret Bangladeshi termination law on its own:
- Supports notice period and final settlement calculations as required across supported markets
- Helps document terminations in line with local labor requirements
- Supports offboarding workflows, final pay, and statutory settlements across supported markets
- Helps keep employment practices aligned with regulatory changes across 160+ countries
EOR solution in Bangladesh
Bangladesh Employer of Record simplifies and fastens the process of business expansion into the very heart of Bangladesh. Working with an EOR helps you by establishing swift management of employee earnings, contracts of agreement, tax details, and work permits.
General Employer of Record service terms
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Taxes that apply to invoices
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Any company operating in Bangladesh has to pay the government a GST of 15%.
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Minimum duration of service
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The minimum duration of service is six months for desk jobs and three months for other jobs.
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Currency Accepted
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Bangladeshi Taka (BDT)
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Required Details & Documents
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Important personal information, passport copy, bank-related details, NIC card, and a TIN (if applicable)
For outsiders: Personal details, duties, and responsibilities within the organization, educational and technical qualifications, CV, passport copy, bank details, passport-size photos, medical report, and police verification
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Outsourcing employment through an EOR partner
It is important to choose what path you want to take when expanding your business in Bangladesh. You can opt to grow a team from scratch and manage them or leave them to an EOR partner
Setting up a company in Bangladesh means registering with the Registrar of Joint Stock Companies and Firms (RJSC), obtaining a trade licence, and registering with the NBR for tax, often weeks of setup before your first employee starts.
Skuad helps remove that dependency. Skuad acts as the legal employer in Bangladesh, so your company can hire, onboard, and pay employees without entity setup, local legal counsel, or in-house Bangladeshi payroll infrastructure.
Here is what Skuad helps with:
- Employment contract generation across 160+ countries, aligned with local labor laws and statutory requirements
- Statutory contribution workflows across supported markets, covering applicable benefits and deductions
- Payroll processing in 70+ currencies with tax withholding and statutory deductions
- Termination and offboarding support aligned with local labor requirements across supported markets
- Work permit and visa support for foreign nationals joining your team
- Background verification covering identity, employment history, and credentials before onboarding
Book a demo to see how Skuad gets your first Bangladesh hire onboarded in weeks, not months
Types of visas in Bangladesh
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Visa type
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Explanation
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Business Visa
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For foreign nationals visiting Bangladesh for business activities such as meetings, trade, or exploring investment, without taking up local employment.
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Crew Visa
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For crew members of ships, aircraft, or other transport entering Bangladesh in the course of their duties.
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Diplomatic and Official Visa
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For holders of diplomatic or official passports travelling on government or diplomatic assignments.
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Employment / Work Visa
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For foreign nationals entering Bangladesh to take up paid employment with a local organisation.
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Investor Visa
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For investors in new, existing, or upcoming industrial or commercial entities, including joint ventures and fully foreign-owned companies.
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Journalist Visa
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For professional journalists and media representatives travelling for work.
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NGO Visa
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For individuals appointed to an NGO registered in Bangladesh for employment or service.
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Research / Intern Visa
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For foreign nationals coming to Bangladesh for research work or an internship.
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Student Visa
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For students enrolled in a state-approved institute or university in Bangladesh.
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Tablig Jamaat Visa
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For foreign nationals visiting to participate in Tablig Jamaat religious congregation activities.
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Tourist Visa
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For bona fide tourists visiting Bangladesh for sightseeing or leisure.
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Family Tourist Visa
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For family members accompanying a visitor to Bangladesh on a tourist basis.
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UN and International Organization Visa
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For officials and representatives of the United Nations and other international organisations.
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Missionary Visa
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For foreign nationals undertaking missionary or religious service work.
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Visa on Arrival (VOA)
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A short-term visa is issued at the port of entry to eligible foreign nationals who meet the criteria.
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Work permit
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Work Permits
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Explanation
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Can Skuad Sponsor a Work Permit in Singapore?
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Yes
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Processing time
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Around two weeks
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Work Permit process
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- Step 1: Skuad’s local contacts in Bangladesh will apply for the work permit.
- Step 2: Skuad’s contacts will apply to BIDA online for the issue of e-visa in Bangladesh. A letter of permission and other details will be sent to the local branch and a certificate in case of incorporation. The details of employees should be submitted, and an Encashment certificate of at least 50000 USD must be paid for the initial establishment cost.
- Step 3: Once BIDA has issued the E-visa, the worker will enter Bangladesh.
- Step 4: Skuad will apply for a work permit in BIDA 15 days before the employee’s day of arrival in Bangladesh. Also, 5000 BDT will be required for this process.
- Step 5: Once BIDA is done with the work permit, it will then be transferred to the Ministry of Home Affairs for security protocols.
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Passport submission
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The employee has to provide a copy of the passport to any institution like BOI or BEPZA.
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Work Permit validity
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The work permit is generally valid for three months. However, it can be renewed or extended depending on the nature of the contract.
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The work Permit process for different nationalities
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Citizens of most countries go through the same process for issuing a work permit; however, there could be few exceptions or changes.
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Change of sponsor within Bangladesh
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The employee will need to submit a new letter of application for a change in sponsorship.
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Where is the application processed?
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The application letter is processed in Bangladesh for the employee’s nation.
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Work permit criteria
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- The employee must have a clean criminal record and should be able to support themself.
- The employee must have good intent before entering Bangladesh
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When can an employee travel to Bangladesh
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Any employee can travel to Bangladesh once the Ministry of Home Affairs completes all security checks.
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What’s the cost of a Business Visa?
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Standard single-entry business visas cost 25 USD.
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Duration of Business Visa processing
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Every business visa is valid for generally three months, but it can be extended. The maximum number of days stayed on each visit must not exceed 30 days.
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Can you switch from a Business Visa to a Work Permit?
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No
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Termination of Work Permit
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The work permit becomes invalid as soon as the contract comes to an end. No other system is required for cancellation.
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Special requirements for Work Permit cancellation
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The work permit can be canceled either by the employer, employee, or the appointed agency.
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Work Permit
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A work permit is compulsory for every overseas individual who wishes to work in Bangladesh. The work permit also allows you to start operating your business without a visa. The work permit generally takes 15 days to be processed and is valid for three months, but can be extended.
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Criteria to Obtain a Work Permit
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Any employees who want to work in Bangladesh need to satisfy these criteria.
- A letter of appointment from the employer in Bangladesh
- A letter of recommendation from institutions such as BOI and BEPZA
- A passport-size photocopy
- Verified visa application form
- A passport with at least six months of validity
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Payroll and taxation in Bangladesh
To regulate earnings and oversee tax collection in Bangladesh, you must have a clear understanding of the rules and regulations. As an international organization, it is important to know and follow the country's laws, such as taxes on income, taxes on business, security taxes, and more. There are two ways of regulating this:
You can establish and make your own team to manage the salaries and taxes.
You can get help from our local contacts in Bangladesh, who will make sure that everything is in accordance with Bangladesh laws and make the management of payroll and employment easier.
Employee taxation
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Item
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Detail
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Income tax slabs (AY2025-26)
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Progressive: first BDT 350,000 nil; next 100,000 at 5%; next 400,000 at 10%; next 500,000 at 15%; next 500,000 at 20%; next 2,000,000 at 25%; balance at 30%.
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Tax-free thresholds
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General BDT 350,000; women and seniors (65+) 400,000; persons with disabilities 475,000; war-wounded freedom fighters 500,000.
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Non-residents
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Flat 30% on total income (other than Bangladeshi non-residents).
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Minimum tax (city areas)
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Even with lower calculated tax: BDT 5,000 (Dhaka North/South, Chattogram), 4,000 (other city corporations), 3,000 (outside city corporations).
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Investment rebate
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The lowest of: 3% of total taxable income, 15% of eligible investment, or BDT 1,000,000.
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Provident fund interest
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Taxable at the employee's slab rate where it exceeds BDT 150,000 or one-third of salary, whichever is lower.
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Employer / corporate taxation
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Item
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Detail
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Financial year-end
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30 June.
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Non-listed company
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27.5% on net profit (conditional rates require all receipts and large expenses routed through banking channels).
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Publicly traded company
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20% (more than 10% of shares via IPO) or 22.5% (10% or less via IPO).
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One-person company (OPC)
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25%.
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Trust, association of persons, firms
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27.5%.
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Banks, insurance, financial institutions
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37.5% (listed) or 40% (non-listed).
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Minimum tax on gross receipts
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Payable even at a loss: 1.5% for mobile operators, 1% for most other companies, 0.1% for new manufacturing in the first three years.
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Contributions & statutory benefits
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Item
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Detail
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Social security contributions
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No mandatory employer or employee social security contributions.
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Workers' Profit Participation Fund (WPPF)
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Qualifying companies (paid-up capital BDT 10 million or assets BDT 20 million) share 5% of profit with employees.
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Provident fund
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Not mandatory; constituted if three-fourths of workers demand it in writing. Where it exists, employees contribute around 7–8% with a matching employer contribution.
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Universal Pension Scheme (2024)
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Voluntary scheme open to private-sector employees, informal workers, and expatriates; contributions get tax concessions and pensions are tax-free.
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Withholding Tax (TDS)
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Payment
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Rate
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Salary
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Deducted at source by the employer at the employee's applicable slab rate.
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Non-resident: consultancy, royalty, technical know-how
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20%
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Non-resident: interest, digital services
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20%
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Resident: professional / consultancy services
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10–15%
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Dividend (resident individual with 12-digit TIN)
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10% (15% without TIN)
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Businesses planning to expand into the Bangladesh market will need the assistance of local HR professionals to manage the complex taxation, compliance, and payroll procedures in the country.
Business enterprises often face difficulty while operating with the banking institutions in Bangladesh, and their rules and regulations vastly differ from the structure and rules of international business transactions.
It’s also very important to understand the rules and regulations of Bangladesh. If you don’t plan on taking any global EORs, you should get assistance from a lawyer who's well-informed about the Bangladesh subsidiary laws. You can also choose to groom your own team to look after the hiring and payroll process.
Types of company structures in Bangladesh:
- Most of the companies operating in Bangladesh today are PLLC, Private Limited Liability Company. It’s a different legal entity, and generally, shareholders are not held accountable for the company’s debts more than the amount of share capital they have invested.
- The LLC structure has its own legal framework, and you need at least two directors and two shareholders. Bangladesh has a minimum requirement of share capital, which costs just $1. You’ll also have to provide the annual financial records to the Income Tax Authority of Bangladesh.
If you’re determined to take the next step and open up a subsidiary in Bangladesh, you might be in need of some help.
Simplifying hiring in Bangladesh
Hiring in Bangladesh means staying on top of Labour Act 2006 rules, NBR tax withholding, provident fund participation, festival bonuses, and BIDA work permits, all at once.
Skuad supports the operational complexity of hiring in Bangladesh, employment contracts, payroll in 70+ currencies, statutory benefits, and work permits, so your team can focus on the work.
Companies across IT, apparel, e-commerce, and technology use Skuad to support their entry into the Bangladeshi market, stay aligned with regulations as they change, and scale their team without building local HR infrastructure from scratch.
Book a demo to see how Skuad gets your first Bangladesh hire onboarded in weeks, not months
FAQs
1. What is an Employer of Record in Bangladesh?
An employer of record in Bangladesh legally employs your staff, handling payroll, NBR tax withholding, and compliance with the Labour Act 2006, so you hire without a local entity.
2. How much does an Employer of Record in Bangladesh cost?
EOR providers in Bangladesh typically charge $200 to $600 per employee monthly, plus the gross salary. Some add a one-time setup fee or use percentage-of-salary pricing.
3. Can a foreign company hire in Bangladesh without setting up an entity?
Most EOR providers hold a Bangladeshi entity and registrations, signing compliant contracts in taka and running payroll, so you skip RJSC registration and a trade licence.
4. What are the compliance risks of hiring in Bangladesh without an EOR?
Main risks are contractor misclassification, incorrect NBR tax withholding, missed festival bonuses, and termination errors under the Labour Act 2006, all of which can trigger penalties.
5. EOR or setting up an entity in Bangladesh: which makes more sense?
An EOR suits small teams and fast entry, with no setup cost. A private limited company becomes more cost-effective at higher headcounts and a long-term local presence.
About the author
Lead, Global HR Operations
Linh Pham is the Lead for Global HR Operations at Payoneer Workforce Management (Formerly Skuad), based in Ho Chi Minh City, Vietnam. With over 10 years of HR experience in the Asia-Pacific region, she specialises in international talent acquisition, employee relations, and employment compliance. Linh leads the HR Operations team across 50+ countries, ensuring efficient onboarding, payroll management, and adherence to local laws for distributed teams.
