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Updated on:
16 Jan, 2024
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Table of Content


Employer Of Record In Bangladesh

Bangladesh Employer of Record gives you an upper hand in growing your business in Bangladesh independently. Skuad’s international undivided HR platform helps you accelerate the hiring of your local team, administer their salaries, and handle a range of HR responsibilities on your behalf. Skuad will also assist you in expanding your business internationally with the help of our global networks.


One platform to grow your global team

Hire and pay talent globally, the hassle-free way with Skuad

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Employment 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.

Privileges Explanation
Working Hours Eight hours per day for a maximum of 48 hours in a week.
Overtime Eligibility - Over Time Calculation: Basic/208*2 = OT Rate, i.e twice the regular hourly pay - The maximum amount of overtime work that an employee can do is 10 hours per day and 60 hours per week and on average 56 hours per week in any year - Employees are entitled to a 30-minute break for every 4 hours of work.
Paid Public Holidays
  • Feb 21, Shaheed Day / Language Matyrs’ Day
  • Feb 26, Shab e-Barat
  • March 17, Sheikh Mujibur Rahman's birthday
  • March 26, Independence Day
  • April 5, Jumatul Bidah
  • April 6, Laylat al Qadr
  • April 9, 10, 11, Eid Ul Fitr Holiday
  • April 14, Bengali New Year
  • May 1, May Day
  • May 23, Buddha Purnima
  • June 16, 17, 18, Eid ul-Adha-Holiday
  • July 17, Ashura
  • August 15, National Mourning Day
  • August 26, Shuba Janmashtami
  • September 16, Eid-e-Milad-un-Nabi
  • October 13, Vijaya Dashami
  • December 16, Victory Day
  • December 25, Christmas Day
Holiday Pay

All employees are allowed full holiday pay on 11 festival holidays.

If an employee chooses to or is required to work on a festival holiday, they will be remunerated with two additional holidays with full salary and an alternate day leave.

Medical leave All employees have the right to claim medical leave for at least 14 days with full pay, provided they submit a medical certificate.
Maternity Leave Female workers who have worked at the company for at least six months are allowed to avail of eight weeks of authorized paid leave before and after the birth of their child. Those women who have not worked for six months are generally eligible for unpaid leave. They are also restricted from working for eight weeks after the birth of their child.
Annual Leave Accrual Entitlement Every employee has the right to claim annual leave after completing one year’s service in an establishment. The leaves are counted at the rate of one day for every 18 working days.
Leave Expiry Employees can choose to cash out their accrued annual leave with full pay.
Leave Cash Out Employees can choose to cash out their accrued annual leave with full pay.
Accrued Leave at Termination Accrued Annual leave payout is allowed to the employees in full when the leave is carried over to the following year.
Employee Protection and Anti-discrimination Rights Bangladesh’s labor rules and laws dictate all the major implemented rules and regulations for the protection of workers’ rights. Bangladesh’s constitution also specifies that all Bangladeshis are equal; hence, no one can be discriminated against based on caste, class, or religion. The labor law states that any child below the age of 14 cannot be employed in any factory. It also grants a one-hour break for every six-hour shift and 30 minutes for five hours shifts.
Confidentiality of Personal Information There is no privacy protection law where the employer protects the personal information of an employee. However, Article 43(B) of the Constitution gives every citizen the right to privacy of communication. The newly introduced Technology Act enables the Government to restrict data under specific conditions, which could be for the following.
  • Security of the state
  • Relationships with foreign states
  • For investigations

Skuad’s Bangladesh EOR solution can be the perfect local payroll provider and give you peace of mind while expanding your business, thanks to the extensive knowledge about the Bangladesh labor rules.

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 with the employer.

Book a demo with us for more information about hiring contractors and full-time employees.

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. Skuad's EOR solution helps organizations hire both types of workers in Bangladesh seamlessly. Skuad’s team of experts can take over the responsibilities of drafting a proper employment contract that covers employment terms, benefits, additional perks, and all other details in accordance with local laws.

To ensure that your hiring process is compliant with the obligatory laws, speak to Skuad’s experts today.

Probation & Termination

Probation Period

Section 4(8) of the Labour Act dictates that the duration of the probation time depends on the employee’s line of work. If the employee is from an administrative background, the probation period is 6 months, and for other employees, it’s generally 3 months. The probation duration can be increased if the type of service within the first three months of probation is unsatisfactory. However, the employee is entitled to a permanent place at work after completing the probation period.

Termination of service

The employee or the employer both hold the power to terminate the contract according to the Labor Act of 2006. The Act provides 5 different procedures to terminate employment:

  1. Termination with notice
  2. Dismissal
  3. Discharge
  4. Layoff
  5. Retrenchment

The employer is responsible for putting out a notice 120 days before termination for rated monthly employees and 60 days for other employees. The worker is also entitled to one month’s pay upon termination for every year of service.

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 such as Skuad helps you by establishing swift management of employee earnings, contracts of agreement, tax details, and work permits. Skuad can offer the perfect pool of candidates that are suitable for business owners and CEOs without them having to do the difficult work.

General Employer of Record Service Terms

Taxes that apply to invoices Any company operating in Bangladesh has to pay the government a GST of 15%.
Minimum duration of service The minimum duration of service is six months for desk jobs and three months for other jobs.
Currency Accepted Bangladeshi Taka (BDT)
Required Details & Documents

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

Outsourcing employment through an Employer of Record

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 such as Skuad to handle the responsibilities of regulating the employees’ salaries and their growth

Types Of Visas In Bangladesh

Category Explanation
Business Visa Criteria Business Visa applies to business owners and CEOs who want to set up a business in Bangladesh. The criteria for this are as follows.
  • The annual profits earned through the business (a company operating in the jurisdiction of Bangladesh) must not be less than 50 lakh BDT.
  • The annual salary of the applicant must be more than five lakh BDT. Bangladeshi citizens must provide a copy of the tax return document of the last two years to prove their financial status.
  • Application letter from any institution like the Board of Investment, Bangladesh Bank, or BEPZA.
  • Bank details and employee details
  • Two copies of a 45 mm X 35 mm picture
Tourist Visa Bona-fide tourists who intend to explore the beauty of Bangladesh need to apply for a Tourist Visa. To apply for a Tourist Visa, the following documents are required.
  • Filled out the online application form
  • Passport and a copy of the main page
  • Copy of Thai Work Permit and Stay Permit
  • Two recent color photographs
Student Visa This visa is for students who are planning to pursue an academic course from a state-approved institute or university in Bangladesh.
Employment Visa The people who are entering Bangladesh for employment projects need to obtain this visa.
Investors Visa Investors in existing, new, under construction, or upcoming industrial or commercial entities in the private sector under joint venture or 100% foreign-owned company are eligible for an Investor Visa.
NGO Visa Individuals appointed in an NGO registered in Bangladesh are eligible for an NGO visa for employment/service.

Work Permits

Work Permits Explanation
Can Skuad Sponsor a Work Permit in Singapore? Yes
Processing time Around two weeks
Work Permit process
  • 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.
Passport submission The employee has to provide a copy of the passport to any institution like BOI or BEPZA.
Work Permit validity The work permit is generally valid for three months. However, it can be renewed or extended depending on the nature of the contract.
The work Permit process for different nationalities Citizens of most countries go through the same process for issuing a work permit; however, there could be few exceptions or changes.
Change of sponsor within Bangladesh The employee will need to submit a new letter of application for a change in sponsorship.
Where is the application processed? The application letter is processed in Bangladesh for the employee’s nation.
Work permit criteria
  • The employee must have a clean criminal record and should be able to support themself.
  • The employee must have good intent before entering Bangladesh
When can an employee travel to Bangladesh Any employee can travel to Bangladesh once the Ministry of Home Affairs completes all security checks.
What’s the cost of a Business Visa? Standard single-entry business visas cost 25 USD.
Duration of Business Visa processing 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.
Can you switch from a Business Visa to a Work Permit? No
Termination of Work Permit The work permit becomes invalid as soon as the contract comes to an end. No other system is required for cancellation.
Special requirements for Work Permit cancellation The work permit can be canceled either by the employer, employee, or the appointed agency.
Work Permit 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.
Criteria to Obtain a Work Permit 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

Find out more about obtaining work permits in Bangladesh here.

Payroll & 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 like taxes on income, taxes on business, security taxes, and more. There are two ways of regulating this:

  1. You can establish and make your own team to manage the salaries and taxes.
  2. You can get help from our local contacts in Bangladesh who will make sure that everything is in accordance with Bangladesh laws and make management of payroll and employment easier.

Taxes In Bangladesh

Employer Taxation

Tax Explanation
Financial Year-end Date 30th of June, every year
Tax Documents IT-11GA
Corporate Tax Companies in Bangladesh are required to pay a corporate tax of 27.5%.
Withholding Tax (For Non-Residents)

Dividends Percentage:- 20%

Interest Income:- 20%

Payroll Tax The Bangladesh government levies a progressive payroll tax on employers ranging from 10% to 30%.
Employers' Social Security and Statutory Contributions The concept of Social Security in Bangladesh is non-existent, although certain companies have to pay 5% of their earnings to the Workers Profit Fund.
Reimbursements Reimbursement in Bangladesh is not possible as there is no law related to it.
Medical Insurance In Bangladesh, the healthcare system is diverse and often poorly regulated. Healthcare consists of four main types of institutions.
  1. NGOs
  2. Government institutions
  3. Global Agencies
  4. Private Companies

Employee Taxation

Tax Explanation
Income Tax Rates Monthly taxable salary per annum
Annual salary Tax Rate(%)
0 to 3,50,000/- Bangladesh Taka Nil
3,50,001/- to 4,50,000/- Bangladesh Taka 5%
450,001 - 750,000 Bangladesh Taka 10%
750,001 - 1,150,000 Bangladesh Taka 15%
1,150,001 - 1,650,000 Bangladesh Taka 20%
1,650,001 and above 25%
Only citizens of Bangladesh have to pay this amount of tax. Foreign residents have to pay taxes at a flat rate of 30% of their earnings.
Income Tax Returns Yes
Employees Social Security and Statutory Contributions There is no proper Social Security system in Bangladesh, so employees in Bangladesh do not pay any Social Security contribution to the Government.
Sales Tax Consumers in Bangladesh have to pay a sales tax of 15% for buying services and products. It is one of the major sources of income for the state.

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. For this, it is advantageous to partner with a local EOR such as Skuad’s Bangladesh EOR solution to handle this on your behalf.

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 help like Skuad, 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:

  1. 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 dues more than the number of share capital they have invested.
  2. 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. Skuad’s EOR, Bangladesh, can be your perfect partner who can let you rest as they streamline the process.


Skuad offers EOR(Employer of Records) services for organizations that want to employ employees and run payroll without opening a subsidiary in Bangladesh. Employees will be employed in days through Skuad’s local contacts in accordance with the labor laws.

Book a demo here.


1) What is the employer of record in Bangladesh?

An Employer of Record streamlines the process. They act as your legal employer, handling payroll, taxes, and benefits for your Bangladeshi workers. This lets you hire top talent without setting up a local entity.

2) What does an EOR do?

An Employer of Record becomes the legal employer for your international workers, taking on the full weight of HR responsibilities. This includes ensuring compliance with local employment laws, managing payroll and taxes, and administering benefits.

3) What is an employer of record agreement?

An Employer of Record agreement formalizes the partnership between your company and an EOR service provider.  The contract states the the EOR's legal employment responsibilities for your overseas staff which include tasks like payroll processing, tax withholding, and benefits administration. The agreement outlines the terms of service, clarifying responsibilities for both parties, ensuring a smooth working relationship, and protecting your company from legal risks associated with international hiring.

4) What is the difference between employer of record and payroll?

EORs act like your global HR department, handling everything from hiring to benefits for your overseas team. Payroll companies, however, focus on software solutions for wage disbursement.

5) What is severance pay in Bangladesh?

In Bangladesh, severance pay is a legal requirement for terminated employees who meet certain criteria. Generally, employees receive one month's salary for each year of service if their contract ends through no fault of their own. This includes redundancy, company restructuring, or permanent disability preventing them from performing duties. To learn more about the cost of employment in Bangladesh, click here.

EOR in 
best value
Pay monthly at a discounted rate with a 12-month commitment
(billed annually)
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Employ contractors and employees in 160+ countries

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EOR in 
(billed annually)
Pay monthly at a discounted rate with a 12-month commitment
(billed monthly)
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Employ contractors and employees in 160+ countries

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Table of Content

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EOR in 
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(billed monthly)

Employ contractors and employees in 160+ countries