--- title: "Bangladesh" id: "11821" type: "global-payroll" slug: "bangladesh" published_at: "2025-08-05T07:03:05+00:00" modified_at: "2026-10-01T16:30:25+00:00" url: "https://topsourceworldwide.com/global-payroll/bangladesh/" markdown_url: "https://topsourceworldwide.com/global-payroll/bangladesh.md" taxonomy_continent: - "Asia" --- # Payroll Outsourcing in Bangladesh Fully managed Bangladeshi payroll – income tax withheld at the Finance Act 2026 rates, two festival bonuses a year and the provident fund rules of the 2026 Labour Act amendment, with a named specialist a phone call away. [Get in touch](https://topsourceworldwide.com/contact-us/) TopSource rated 5/5 by our customers - - - - - [Read reviews](#testimonials) ## What Bangladeshi payroll actually involves Bangladesh has no social security contributions for private employers. Payroll cost comes from two festival bonuses a year and, for larger employers, a provident fund, group insurance and a share of profits for workers, while income tax is withheld from every salary. The Labour Act was amended in April 2026 and the tax bands in June. ### A Tk 400,000 tax-free threshold The Finance Act 2026 raised the tax-free threshold to Tk 400,000 for the 2026-27 and 2027-28 tax years, with bands from 10% to 30% above it. A third of employment income, up to Tk 450,000, is exempt first. ### Two festival bonuses a year Employees with a year of continuous service receive two festival bonuses a year, each of up to one month’s basic wage, timed to their religious festivals. ### No social security contributions Private employers pay no social security or payroll tax. Staff can join the universal pension scheme, Progoti, with the employer paying half when it enrols its workforce. ### A provident fund at 100 workers Since April 2026, employers with at least 100 permanent workers must set up a provident fund if two-thirds of them ask in writing, or enrol interested staff in Progoti instead. ### 120 days of maternity leave The 2026 amendment raised paid maternity leave from 112 to 120 days, 60 before and 60 after birth, and festival holidays from 11 to 13 days a year. ## Our Partners Globally ## Calculate Your Employee Costs in Bangladesh Enter a gross annual salary to see the employer cost of a Bangladeshi employee. With no social security contributions, the statutory addition is the two festival bonuses, which the calculator values at two months’ basic pay with basic pay set at 60% of gross. Provident fund, group insurance and profit participation apply only to larger employers and are not included. ##### Employment Cost Calculator *Indicative figures only and not definitive legal advice. Local regulations change frequently. [Consult an expert](/contact-us/) ##### Bangladesh Annually Monthly | | British Pound | Bangladesh | | --- | --- | --- | | Base Salary (per month) | | | | Employer Contributions | | | | Total Cost (Annual) | | | | Total Cost (Monthly) | | | Employer of Record services in [Learn more](#) Payroll Outsourcing in [Learn more](#) ## Know your Bangladeshi hiring costs before you commit Tell us the role, the salary and the pay structure – we’ll send back the full Bangladeshi employer cost, festival bonuses and income tax included, within one business day. [Get a Custom Payroll Quote](https://topsourceworldwide.com/contact-us/) > “Their expertise and understanding of the unique hiring, payment, and human resource practices in each country has been nothing short of outstanding. Our Client Success Manager, has done just that … ensured our success. Her availability and willingness to engage on a personal level has made all the difference.” Director of Research Operations, > “Excellent service, especially from our account manager who has gone above and beyond to help us use the platform effectively. Our manager, significantly simplifies my workload. It is like having your own TopSource HR representative on your team.” Chief Human Resources Officer, > “TopSource has been our go-to resource for international hiring. They are responsive, thorough, respectful and knowledgeable. The Client Success team has provided us with the utmost customer service, and the more we use TopSource, the more, it gives us access to more resources and knowledge.” Senior Manager, Human Resources , ## Employer Costs in Bangladesh Explained A Bangladeshi employee costs little on top of salary in statutory terms. There are no social security contributions, so the main addition is the two festival bonuses, about 10% of gross pay when basic pay is 60% of the salary. Larger employers add a provident fund, group insurance and a 5% share of net profits for workers. Income tax is withheld from the employee’s pay rather than added to the employer’s cost. Here’s the breakdown. #### Income tax under the Finance Act 2026 The Finance Act 2026, published on 30 June 2026, sets the tax-free threshold at Tk 400,000 for the 2026-27 and 2027-28 tax years, or Tk 450,000 for women and taxpayers aged 65 or over. Above it, the next Tk 300,000 is taxed at 10%, the next Tk 400,000 at 15%, the next Tk 500,000 at 20%, the next Tk 2,000,000 at 25% and the rest at 30%. Anyone whose income exceeds the threshold pays at least Tk 5,000, or Tk 1,000 as a new taxpayer. The threshold is already set to rise to Tk 450,000 for 2028-29 and 2029-30. A third of employment income, up to Tk 450,000 a year, is exempt before the bands apply. The employer deducts tax from each salary payment at the average rate on the employee’s estimated annual income and gives each employee a certificate of tax deducted. Companies and firms file a monthly return of tax withheld by the 25th of the following month, and employees file their own return by Tax Day, 30 November. #### Festival bonuses, overtime and profit participation Under rule 111(5) of the Bangladesh Labour Rules 2015, every worker with a year of continuous service receives two festival bonuses a year, each of up to one month’s basic wage. They are paid around the employee’s religious festivals, such as the two Eids, Durga Puja or Christmas. Overtime is paid at twice the ordinary rate of basic wage and dearness allowance. Companies with paid-up capital of at least Tk 1 crore or fixed assets of at least Tk 2 crore pay 5% of net profit each year into the Workers’ Profit Participation Fund, the workers’ welfare fund and the Bangladesh Workers’ Welfare Foundation, split 80:10:10, within nine months of the year end. Employers with at least 100 permanent workers must also take out group insurance. #### Provident fund and Progoti after the 2026 amendment Bangladesh has no social security contributions for private employers. The Bangladesh Labour (Amendment) Act 2026, in force since 10 April 2026, requires an employer with at least 100 permanent workers to set up a provident fund when at least two-thirds of its workers ask for one in writing. The employer is exempt if it enrols the staff who want to join in Progoti, the universal pension scheme run by the National Pension Authority, with the employer and the worker each paying 50% of the contribution. Employer contributions to a recognised provident fund are not taxed as a benefit for the employee. A gratuity scheme is not compulsory, but where an employer has one, the gratuity replaces the statutory termination compensation when it is higher. #### What a Bangladeshi employee actually costs For an employee on Tk 100,000 a month with a basic wage of Tk 60,000, the two festival bonuses add Tk 120,000 a year, or Tk 10,000 a month: a total cost of Tk 110,000 a month, 10% on top of salary. A provident fund, group insurance and profit participation apply only to larger employers. The share of basic pay in the salary drives the bonus cost, because each bonus is capped at one month’s basic wage. Salaries are paid within seven working days of the end of the wage period, and final dues within 30 working days of the end of employment. #### Working time, leave and termination The working day is 8 hours and the week 48, with overtime allowed up to 10 hours a day and 60 a week, averaging no more than 56 hours a week over a year. Workers receive 10 days of casual leave and 14 days of sick leave a year on full pay, 13 days of paid festival holidays and, after a year of service, one day of annual leave for every 18 days worked. Maternity leave is 120 days, 60 before and 60 after birth, for women with six months of service. An employer can end a monthly-paid permanent worker’s employment without cause with 120 days’ written notice or pay in lieu, plus compensation of 30 days’ wages for each completed year of service, or the gratuity if higher. A permanent worker who resigns gives 60 days’ notice and receives compensation for each completed year: 7 days’ wages with up to three years of service, 15 days with three to ten years and 30 days after ten years. ## Bangladeshi payroll costs and contributions, 2026 | Item | Employer | Employee | Applies to | | --- | --- | --- | --- | | Social security | None | None | No national scheme for private employers | | Festival bonuses | Two a year, up to one month’s basic each | — | After a year of continuous service | | Provident fund | Required on request | By fund rules | 100+ permanent workers, if two-thirds ask in writing | | Progoti pension (alternative) | 50% of the contribution | 50% of the contribution | Staff who opt in | | Group insurance | Premium | — | 100+ permanent workers | | Workers’ Profit Participation Fund | 5% of net profit | — | Paid-up capital from Tk 1 crore or fixed assets from Tk 2 crore | | Income tax | — | 0% to 30% | Withheld monthly; Tk 400,000 tax-free | ### Bangladeshi income tax bands for individuals, 2026-27 and 2027-28 | Taxable income | Rate | | --- | --- | | First Tk 400,000 (Tk 450,000 for women and taxpayers aged 65 or over) | 0% | | Next Tk 300,000 | 10% | | Next Tk 400,000 | 15% | | Next Tk 500,000 | 20% | | Next Tk 2,000,000 | 25% | | The rest | 30% | | Minimum tax once income exceeds the threshold | Tk 5,000 (Tk 1,000 for new taxpayers) | ### Income tax withheld from monthly salaries in Bangladesh, 2026-27 | Monthly salary | Annual salary | Exempt third (up to Tk 450,000) | Taxable income | Annual tax | Monthly withholding | | --- | --- | --- | --- | --- | --- | | Tk 50,000 | Tk 600,000 | Tk 200,000 | Tk 400,000 | Tk 0 | Tk 0 | | Tk 100,000 | Tk 1,200,000 | Tk 400,000 | Tk 800,000 | Tk 45,000 | Tk 3,750 | | Tk 200,000 | Tk 2,400,000 | Tk 450,000 | Tk 1,950,000 | Tk 277,500 | Tk 23,125 | | Tk 400,000 | Tk 4,800,000 | Tk 450,000 | Tk 4,350,000 | Tk 915,000 | Tk 76,250 | Tax figures assume twelve monthly salaries, the standard Tk 400,000 threshold, no festival bonuses in income and no investment rebate. Cost figures value each festival bonus at one month’s basic pay, with basic pay at 60% of gross. These are TopSource calculations from the verified 2026 rates. Rates, thresholds and entitlements shown were verified on 1 October 2026 against the Finance Act 2026, the Income Tax Act 2023, the Bangladesh Labour Act 2006 as amended in April 2026 and published sources on the Labour Rules 2015. This page is general information, not tax or legal advice. [Get a Custom Payroll Quote](https://topsourceworldwide.com/contact-us/) ## How our Bangladeshi payroll service works 1. Map your setup We confirm your TIN and withholding obligations, your pay structure and basic wage share, and whether you meet the thresholds for the provident fund, group insurance and the Workers’ Profit Participation Fund. 2. Migrate or onboard New employees are set up with their TIN, salary structure and festival bonus eligibility. Service dates, leave balances and provident fund balances are carried across so nothing is lost at the changeover. 3. Run and review Each period you receive a payroll report for approval before anything is paid: gross to net per employee, income tax withheld, overtime and festival bonuses, with variances explained. Nothing is paid until you approve it. 4. File and pay We pay salaries within seven working days of the period end, deposit the tax withheld, file the monthly withholding return by the 25th and issue tax deduction certificates to employees. 5. Stay current Tax thresholds change with each Finance Act, and the tax-free threshold is already set to rise in 2028-29. We apply each change as it takes effect and re-verify the figures on this page. ## Why Outsource Your Bangladesh Payroll to TopSource TopSource for payroll, Employer of Record or any other of our services represents a simpler, more reliable and transparent option. We don’t hide fees or sneak price increases. We run Bangladeshi payroll in-house and file under your own registration rather than a bureau’s, so the same team that files your withholding returns answers your calls. You get a named account manager, one consolidated monthly invoice covering salaries, taxes and fees, and one live Portico view of Bangladesh beside every other country we run for you. Portico syncs with your time-tracking, leave and HR systems via API – set up by our onboarding team, not left to yours. GDPR, SOC 2 and ISO 27001 certified. [Global Payroll](https://topsourceworldwide.com/global-payroll/) [Get Started](https://topsourceworldwide.com/contact-us/) ## Other services Accelerating your growth in Bangladesh and beyond #### TopSource goes far beyond payroll, acting as your end-to-end partner in global workforce management. From Employer of Record (EOR) services and seamless entity setup to localized accountancy and fractional HR support, we cover every aspect of international employment. ### Global Employer of Record (EOR) services With our Global EOR services, you can hire talent in any country without establishing a legal entity. We handle employment contracts, payroll, benefits, and compliance on your behalf, enabling fast, risk-free global expansion. ### Actionable HR Advisory On demand access to our fractional and regional HR professionals who understand local laws, cultures, and best practices. Bespoke talent intelligence including salary, business and talent market benchmarking. ### Global entity management Our global entity management team helps you establish and maintain your corporate entities worldwide. We ensure full compliance with local laws and regulations, streamline administrative processes, and minimize risk — so you can focus on growing your business. ### Accounting We offer comprehensive accounting solutions tailored to meet your international needs. From bookkeeping and financial reporting to tax filings and audits, our services help you maintain transparency, accuracy, and compliance in every jurisdiction. ## Meet our experts for Bangladesh Whether you’re entering the market or scaling operations, our specialists provide the insight and guidance you need to succeed in one of the world’s most dynamic and regulated employment landscapes. With TopSource, you’re backed by real experts, every step of the way. [Our People](https://topsourceworldwide.com/our-people/) ## Beyond a payroll service **A globalization accelerator** A payroll platform for your employees is just the beginning. We are constantly evaluating your entire organisation to identify compliance issues and ways to accelerate your global growth. - [Payroll platform](#) - [Audit](#) - [Intelligence](#) - [Advisory](#) ##### Payroll platform ###### Global payroll simplified Your intuitive hub for paying global teams. Simple, powerful, and designed to scale with you — no complexity, just clarity. ##### Audit ###### Eliminate barriers to growth Avoid compliance issues across your global workforce and uncover opportunities to improve profitability. On a quarterly basis we’ll help you audit your global talent strategy to ensure it aligns with your business goals. ##### Intelligence ###### Build a data-driven talent strategy Grow confidently and profitably with access to the latest TopSource insights & data on hiring markets, salary benchmarking & benefits. ##### Advisory ###### Expert guidance that turns complexity into clarity. Whether you’re managing a global acquisition or entering a new market, you get clear guidance to navigate complex decisions, avoid delays, and accelerate your global expansion. ## Bangladeshi payroll FAQs ### What payroll taxes do employers pay in Bangladesh? Private employers in Bangladesh pay no social security contributions or payroll tax. Their statutory costs are two festival bonuses a year, overtime at double rates and, for larger employers, a provident fund, group insurance and 5% of net profit for the Workers’ Profit Participation Fund. Income tax is withheld from employees’ salaries. ### What are the income tax rates in Bangladesh for 2026-27? The first Tk 400,000 of taxable income is tax-free, or Tk 450,000 for women and taxpayers aged 65 or over. The next Tk 300,000 is taxed at 10%, the next Tk 400,000 at 15%, the next Tk 500,000 at 20%, the next Tk 2,000,000 at 25% and the rest at 30%, with a minimum tax of Tk 5,000 once income exceeds the threshold. ### How much salary income is tax-free in Bangladesh? A third of income from employment is exempt, up to Tk 450,000 a year, before the tax bands apply. The first Tk 400,000 of the remaining taxable income is then taxed at 0% in 2026-27 and 2027-28. ### How do festival bonuses work in Bangladesh? Every worker with a year of continuous service is entitled to two festival bonuses a year, each of up to one month’s basic wage, under rule 111(5) of the Labour Rules 2015. They are paid around the employee’s religious festivals, such as the two Eids, Durga Puja or Christmas. ### Is a provident fund mandatory in Bangladesh? Since the Labour Act amendment of April 2026, an employer with at least 100 permanent workers must set up a provident fund if at least two-thirds of its workers request one in writing. It can instead enrol interested staff in the Progoti universal pension scheme, paying half of each contribution. ### What changed in the Bangladesh Labour Act in 2026? The Bangladesh Labour (Amendment) Act 2026, in force since 10 April 2026, raised maternity leave from 112 to 120 days and festival holidays from 11 to 13 days, set the provident fund rule for employers with 100 or more permanent workers, and changed the compensation paid to permanent workers who resign. ### When must employers file payroll tax returns in Bangladesh? Employers deduct tax from each salary payment and deposit it with the government. Companies and firms file a monthly return of tax withheld by the 25th of the following month and give each employee a certificate of tax deducted. Employees file their own annual return by 30 November. ### How much annual leave do employees get in Bangladesh? After a year of service, workers earn one day of paid annual leave for every 18 days worked. They also receive 10 days of casual leave, 14 days of sick leave on full pay and 13 days of paid festival holidays each year. ### What notice and severance apply in Bangladesh? An employer ending a monthly-paid permanent worker’s employment without cause gives 120 days’ written notice or pay in lieu, plus 30 days’ wages for each completed year of service, or the gratuity if higher. Permanent workers who resign give 60 days’ notice and receive 7, 15 or 30 days’ wages per year depending on their length of service. ### Can a foreign company run payroll in Bangladesh without an entity? Employing staff directly requires a registered presence in Bangladesh, such as a local company or a branch office approved by the Bangladesh Investment Development Authority. 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Tögrög](https://topsourceworldwide.com/global-payroll/mongolia/) [Montenegro Capital: Podgorica Currency: Euro](https://topsourceworldwide.com/global-payroll/montenegro/) [Morocco Capital: Rabat Currency: Moroccan Dirham](https://topsourceworldwide.com/global-payroll/morocco/) [Mozambique Capital: Maputo Currency: Mozambique metical](https://topsourceworldwide.com/global-payroll/mozambique/) [Namibia Capital: Windhoek Currency: Namibian Dollar](https://topsourceworldwide.com/global-payroll/namibia/) [Nepal Capital: Kathmandu Currency: Rupee](https://topsourceworldwide.com/global-payroll/nepal/) [New Zealand Capital: Wellington Currency: New Zealand Dollar](https://topsourceworldwide.com/global-payroll/new-zealand/) [Nicaragua Capital: Managua Currency: Nicaraguan córdoba](https://topsourceworldwide.com/global-payroll/nicaragua/) [Nigeria Capital: Abuja Currency: Nigerian Naira](https://topsourceworldwide.com/global-payroll/nigeria/) [Norway Capital: Oslo Currency: Norwegian krone](https://topsourceworldwide.com/global-payroll/norway/) [Oman Capital: Muscat Currency: Rial](https://topsourceworldwide.com/global-payroll/oman/) [Pakistan Capital: Islamabad Currency: Pakistani Rupee](https://topsourceworldwide.com/global-payroll/pakistan/) [Panama Capital: Panama City Currency: Balboa (PAB) and United States dollar (USD)](https://topsourceworldwide.com/global-payroll/panama/) [Papua New Guinea Capital: Port Moresby Currency: Papua New Guinean Kina](https://topsourceworldwide.com/global-payroll/papua-new-guinea/) [Paraguay Capital: Asunción Currency: Paraguayan guaraní](https://topsourceworldwide.com/global-payroll/paraguay/) [Peru Capital: Lima Currency: Peruvian sol](https://topsourceworldwide.com/global-payroll/peru/) [Philippines Capital: Manila Currency: Peso](https://topsourceworldwide.com/global-payroll/philippines/) [Portugal Capital: Lisbon Currency: Euro](https://topsourceworldwide.com/global-payroll/portugal/) [Puerto Rico Capital: San Juan Currency: United States dollar](https://topsourceworldwide.com/global-payroll/puerto-rico/) [Qatar Capital: Doha Currency: Riyal](https://topsourceworldwide.com/global-payroll/qatar/) [Romania Capital: Bucharest Currency: Romanian Leu](https://topsourceworldwide.com/global-payroll/romania/) [Rwanda Capital: Kigali Currency: Rwandan franc](https://topsourceworldwide.com/global-payroll/rwanda/) [Saint Kitts & Nevis Capital: Basseterre Currency: East Caribbean dollar](https://topsourceworldwide.com/global-payroll/saint-kitts-nevis/) [Saint Lucia Capital: Castries Currency: East Caribbean dollar](https://topsourceworldwide.com/global-payroll/saint-lucia/) [Saint Maarten Capital: Philipsburg Currency: Caribbean guilder (Cg)](https://topsourceworldwide.com/global-payroll/st-maarten/) [Saint Vincent & the Grenadines Capital: Kingstown Currency: East Caribbean dollar](https://topsourceworldwide.com/global-payroll/saint-vincent-the-grenadines/) [Saipan Capital: Capitol Hill Currency: U.S. Dollar](https://topsourceworldwide.com/global-payroll/saipan/) [San Marino Capital: City of San Marino Currency: Euro](https://topsourceworldwide.com/global-payroll/san-marino/) [Saudi Arabia Capital: Riyadh Currency: Riyal](https://topsourceworldwide.com/global-payroll/saudi-arabia/) [Senegal Capital: Dakar Currency: West African CFA franc](https://topsourceworldwide.com/global-payroll/senegal/) [Serbia Capital: Belgrade Currency: Serbian dinar](https://topsourceworldwide.com/global-payroll/serbia/) [Seychelles Capital: Victoria Currency: Seychellois Rupee](https://topsourceworldwide.com/global-payroll/seychelles/) [Slovakia Capital: Bratislava Currency: Euro](https://topsourceworldwide.com/global-payroll/slovakia/) [Slovenia Capital: Ljubljana Currency: Euro](https://topsourceworldwide.com/global-payroll/slovenia/) [Solomon Island Capital: Honiara Currency: Solomon Islands Dollar](https://topsourceworldwide.com/global-payroll/solomon-island/) [South Korea Capital: Seoul Currency: Won](https://topsourceworldwide.com/global-payroll/south-korea/) [South Sudan Capital: Juba Currency: South Sudanese Pound](https://topsourceworldwide.com/global-payroll/south-sudan/) [Sri Lanka Capital: Colombo Currency: Sri Lankan Rupee](https://topsourceworldwide.com/global-payroll/sri-lanka/) [Sudan Capital: Khartoum Currency: Sudanese Pound](https://topsourceworldwide.com/global-payroll/sudan/) [Sweden Capital: Stockholm Currency: Swedish krona](https://topsourceworldwide.com/global-payroll/sweden/) [Taiwan Capital: Taipei Currency: Dollar](https://topsourceworldwide.com/global-payroll/taiwan/) [Thailand Capital: Bangkok Currency: Thai Baht](https://topsourceworldwide.com/global-payroll/thailand/) [Trinidad & Tobago Capital: Port of Spain Currency: Trinidad and Tobago dollar](https://topsourceworldwide.com/global-payroll/trinidad-tobago/) [Tunisia Capital: Tunis Currency: Tunisian Dinar](https://topsourceworldwide.com/global-payroll/tunisia/) [Uganda Capital: Kampala Currency: Ugandan Shilling](https://topsourceworldwide.com/global-payroll/uganda/) [US Virgin Island Capital: Charlotte Amalie Currency: Dollar](https://topsourceworldwide.com/global-payroll/us-virgin-island/) [Venezuela Capital: Caracas Currency: Venezuelan bolívar](https://topsourceworldwide.com/global-payroll/venezuela/) [Zambia Capital: Lusaka Currency: Zambian Kwacha](https://topsourceworldwide.com/global-payroll/zambia/) [Zimbabwe Capital: Harare Currency: Zimbabwe Gold (ZiG)](https://topsourceworldwide.com/global-payroll/zimbabwe/) Load more