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Hiring in Bangladesh

Hiring employees compliantly in Bangladesh means doing it yourself or using an Employer of Record like Global Expansion. You should be careful using independent contractor agreements in Bangladesh so that you don’t run afoul of employment laws. To hire an employee compliantly and offer them mandatory benefits and compliant agreements, you can:

(a) Establish your own new legal entity, banking, accounting and payroll service in Bangladesh or

(b) use an Employer of Record like Global Expansion who can handle all of the details for you.

Need assistance hiring in Bangladesh? Contact us about our International EOR  Service

Labor Laws in Bangladesh

Employment laws in Bangladesh are uniquely suited to the country’s way of life, and crucial to understand if you want to employ local talent in this country. Get the details on Bangladesh employment laws and Bangladesh policies here.

Employee Probation Period

  • Clerical workers are entitled to a probationary period of six months; other workers are entitled to a three-month probation period.

Annual Leave in Bangladesh

  • Employees who have worked for at least one year are generally entitled to annual leave as follows:
    • one day for every 18 days of work in a shop, commercial, industrial establishment, factory, or road transport establishment
    • one day for every 22 days of work on a tea plantation
    • one day for every 11 days of work for a newspaper worker
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Holidays in Bangladesh

Bangladesh celebrates twenty national public holidays as well as additional public holidays that vary by state:

Language Movement Day 21st February
Sheikh Mujibur Rahman's Birth Anniversary 17th March
Independence Day of Bangladesh 26th March
Mid-Sha'ban  
Bengali New Year (Pôhela Boishakh) 14th April
Labor Day  1st May
Vesak 6th May
Laylat al-Qadr  
Jumu'atul-Wida  
Eid al-Fitr  
Krishna Janmashtami  
National Mourning Day 15th August
Ashura  
Vijayadashami  
Dussehra 26th October
Prophet's Birthday  
Laxmi Pooja  
Victory day of Bangladesh  
Christmas Day 25th December
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Maternity Leave Bangladesh

  • Female employees who have worked for at least 6 months are entitled to 8 weeks of paid maternity leave before the birth and 8 weeks of paid leave after the birth. 
  • Women who have worked less than 6 months or who already have two other surviving children are generally eligible for unpaid leave.
  • Women are forbidden to work for 8 weeks after the birth of the child.

Paternity Leave Bangladesh

  • There is no statutory paternity leave.

Sick Leave in Bangladesh

  • Employees, other than newspaper workers, are generally entitled to annual paid sick leave of 14 days.
  • Newspaper workers are entitled to sick leave at half-pay for not less than 1/18th of the period of employment.
  • The employee must present a medical certificate to receive sick leave.

Working Hours in Bangladesh

  • Bangladesh has a 40-hour week with Friday and Saturday off.

Overtime in Bangladesh

  • According to section 102 of the Labor Act, the working hours should not exceed 48 hours per week.
  • Overtime is generally calculated by dividing the total salary (including medical and housing benefits) by 208. 
  • Employers then double this number and multiply the result by the number of overtime hours worked.

Termination of Employment in Bangladesh

  • Employees may be terminated for reasons of physical or mental incapacity or continued ill-health as certified by a medical practitioner. 
  • If the employee has served at least one year, s/he is entitled to 30 days of wages for each year of service.
  • Retrenched employees with at least one year of service are generally entitled to one month’s notice or pay in lieu of notice, and 30 days of pay for every year served.
  • Employees who have been convicted of a criminal offense or found guilty of misconduct are not owed notice or severance.
  • Termination of employment in Bangladesh for other reasons generally requires the employer to provide written notice of 120 days for monthly rated workers or 60 days for other workers, or equivalent pay in lieu.

Notice Period in Bangladesh

  • Retrenched employees with at least one year of service are generally entitled to one month’s notice or pay in lieu of notice, and 30 days of pay for every year served.
  • Employees who have been convicted of a criminal offense or found guilty of misconduct are not owed notice or severance.
  • Termination of employment in Bangladesh for other reasons generally requires the employer to provide written notice of 120 days for monthly rated workers or 60 days for other workers, or equivalent pay in lieu.

Severance in Bangladesh

  • If the employee has served at least one year, s/he is entitled to 30 days of wages for each year of service.

Bangladesh Salary and Wages

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13th / 14th Month Pay in Bangladesh

  • No
  • There is no statutory requirement to pay the 13th or 14th month.
  • There is no evidence that it is customary, however, employees in certain sectors receive the Dearness allowance which is a pay supplement to mitigate the effects of inflation.
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Income Tax in Bangladesh

  • Residents are taxed on worldwide income; nonresidents are taxed only on Bangladesh source income
  • An individual is resident for tax purposes if he/she is present in Bangladesh for more than 182 days in the income year, or if during the preceding four years he/she was present in Bangladesh for at least 365 days and during the income year he/she is present in Bangladesh for at least 90 days.
  • Taxable income is divided into “heads” of income, which include income from employment, income from the exercise of a profession, income from property, agriculture income, interest on securities, capital gains, and other income
  • Individual income tax rates for residents are progressive from 0% to 30%, and nonresidents are taxed at a flat rate of 30%
  • Capital gains are one of the heads of income and generally are taxed at the applicable personal income tax rates

Taxable Income

Tax Rate (%)

Up to BDT 300,000

0%

BDT 300,001 to BDT 400,000

5%

BDT 400,001 to BDT 700,000

10%

BDT 700,001 to BDT 1,100,000

15%

BDT 1,100,001 to BDT 1,600,000

20%

Over BDT 1,600,000

25%

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Social Security in Bangladesh

  • In Bangladesh social security encompasses old age pension, disability pension, survivor allowance, cash sickness and maternity benefits, medical benefits, death benefit, work injury and death compensation, and disability benefits
  • Employers, employees and self-employed individuals are not required to make any contributions
  • The government covers these expenses

Immigration Bangladesh

  • Business visitors can enter the country with a Category "B" visa (Business Visa) or Category “T” visa (Tourist Visa), depending on the type of business activities they intend to perform. 
  • The Category “B” visa is suitable for business travelers and business representatives conducting trade or commerce activities, while the Category “T” visa is used by business travelers attending a seminar, symposium or a study tour. 
  • Both visas permit stays of 30 or 90 days. 
  • All foreign nationals require authorization to work in Bangladesh. 
  • For long-term assignments, the foreign national generally applies for an Employment (“E”) Visa and files a Work Permit application within 15 days of arrival in Bangladesh. 
  • Once the work permit is granted, the E Visa can then be extended. 
  • A sub-category of the E Visa, the E1 Visa, is available to individuals visiting Bangladesh on short-term assignments that involve installation, maintenance or ​supervisory work. ​
Need assistance hiring in Bangladesh? Contact us about our International EOR  Service

Type of Permit/Visa

Documentation

Validity

Eligibility

Category B Visa

  • Invitation letter from Bangladesh
  • Letter from the company that is sending the applicant to Bangladesh
  • Filled-in application form
  • Photographs (Size: 37mmX37mm and recent one): 02 copies
  • Valid passport and
  • Payment receipt of visa fee

30 to 90 days

  • The Category “B” visa is suitable for business travelers and business representatives conducting trade or commerce activities

Category E (Employment) Visa

  • Letter of appointment from the employer in Bangladesh
  • Recommendation letter from BEPZA/BOI
  • Filled-in application form
  • Photographs (Size: 37mmX37mm and recent one): 02 copies
  • Valid passport and
  • Payment receipt of visa fee

Multiple entry visa

  • For long-term assignments, the foreign national generally applies for an Employment (“E”) Visa and files a Work Permit application within 15 days of arrival in Bangladesh. 
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Value Added Tax (VAT) in Bangladesh

  • AT is levied on the supply of goods and the provision of services, and on the import of goods or services
  • The standard VAT rate is 15%, with certain exceptions for specified services
  • Exports are zero rated
  • Reduced rates of 5%, 7.5%, and 10% apply to certain goods and services.
  • Local traders, including commercial importers, are liable to pay VAT at 5%.

VAT

Standard Rate

Group 1083

15%

Reduced Rate Group 1083 10%
Reduced Rate Group 1083 7.5%
Reduced Rate Group 1083 5%
Zero Rate Group 1083 0%
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Mandatory Benefits in Bangladesh

  • These are mandatory benefits as postulated by law
  • These include probationary period, annual leave, public holidays, sick leave, maternity leave, overtime pay, notice period, 13th month pay and severance pay
  • Statutory benefits also include social security benefits
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Mandatory Benefits overview

  • Probationary period

  • Annual Leave

  • Public Holidays

  • Maternity Leave

  • Sick Leave

  • Overtime Pay

  • Notice period

  • Severance Pay

  • 13th month pay

  • Social Security Benefits

Payments And Invoicing

  • The assessment year is a period of 12 months commencing on 1st July of each year
  • Joint returns are not permitted; each individual must file a separate return
  • Individuals must file a tax return on or before the “tax day”, i.e. by 30th November following the financial year, unless an extension is obtained
  • A nonresident individual without a fixed base in Bangladesh is not required to file a tax return
  • Advance tax is required to be paid quarterly, and any remaining tax due must be paid before the income tax return is filed
  • An individual that has gross wealth exceeding BDT 2.5 million that owns an automobile or that has invested in a house or an apartment in a city corporation area is required to submit a “statement of assets, liabilities and life style” along with the tax return
  • Penalties are imposed for late filing, failure to file a return, or failure to pay tax; concealment of income; failure to maintain proper records; and failure to provide documents or data

Payroll Accrual in Bangladesh

Country Accruals Additional Information

Vacations

5.75%

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Payroll Accruals Additional Information

    Employment Accruals
Annual Leave Employees who have worked for at least one year are generally entitled to annual leave as follows:
• one day for every 18 days of work in a shop, commercial, industrial establishment, factory, or road transport establishment
• one day for every 22 days of work on a tea plantation
• one day for every 11 days of work for a newspaper worker
This is around 20 days of annual leave. Thus, it equals 5.4% (20/365 days) of annual income
Maternity Leave Female employees who have worked for at least 6 months are entitled to 8 weeks of paid maternity leave before the birth and 8 weeks of paid leave after the birth. This equals 30.7% (16/52 weeks) of annual income
Sick Leave Employees, other than newspaper workers, are generally entitled to annual paid sick leave of 14 days. This equals 3.8% (14/365 days) of annual income
Overtime Overtime is generally calculated by dividing the total salary (including medical and housing benefits) by 208. Employers then double this number and multiply the result by the number of overtime hours worked. This equals 3000 BDT times overtime hours worked.
Severance If the employee has served at least one year, s/he is entitled to 30 days of wages for each year of service. This equals 8.22% (30/365 days) of annual income
13th Month Pay Employees who have completed at least one year of service are entitled to two festival bonuses each year. This equals 16.66% (2/12 months) of annual income
Social Security Employers, employees and self-employed individuals are not required to make any contributions. The government covers these expenses N/A

Accrued Benefits in Bangladesh

Christmas Bonus % 0%
Christmas Bonus Over Vacations % 0%
Severance per Year%

Employees are entitled to severance pay equal to one month's pay after completion of one year of employment (8.24% of annual salary)

8.24%
Vacations %

Employees are entitled to 20 days of paid leave (5.49% of annual salary)

5.49%
Notice %

Employees who are paid monthly are entitled to 120 days of notice period (32.96% of annual salary)

32.96%
Christmas Bonus Over Notifications % 0%
Vacations Plus % 0%

Total percentage of Salary (yearly)

The total employment accruals as a percentage of salary per anum are equal to 46.69%

46.69%

Why use Global Expansion to hire in Bangladesh

Establishing a branch office or subsidiary in Bangladesh can be time-consuming, expensive and complex. With such a robust labor market in place, one must pay great attention to detail when structuring employment because Bangladesh labor laws are complex.

The company also has a responsibility to comply with specific employment practices dictated by Bangladesh law to maintain its good standing as an equal opportunity employer.

Global Expansion makes it easy for you to expand into Bangladesh. We'll help you hire your candidate of choice, handle HR matters and payroll, and ensure that you comply with local laws without the burden of setting up a foreign branch office or subsidiary. In addition, you'll have complete control and direction over your employees.

We enable you to stay in control of everything. Our Bangladesh Global Professional Employer Organization (PEO) and Employer of Record (EOR) solution provides you with peace of mind to focus on running your company and the security to enter new markets.

 

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