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Localised employment contracts
Bangladesh is emerging as a dynamic talent hub in South Asia, recognised for its large, youthful, and increasingly digitally-skilled workforce. With a strong emphasis on education, growing English proficiency, and competitive labour costs, the country presents compelling opportunities for businesses seeking to scale operations or hire remotely. As digital infrastructure improves and the startup ecosystem expands, Bangladesh is becoming an attractive destination for global talent acquisition.
Located in South Asia, Bangladesh is home to a fast-growing, cost-effective workforce that’s attracting the attention of global employers. The country has its own set of employment regulations, including rules on minimum wages, contract types, and social security contributions that companies must comply with.
Discover everything you need to know about salaries, employment costs, and legal requirements for hiring in Bangladesh. Get the full hiring guide now!
Employment contracts in Bangladesh can be written, oral or electronic and must comply with the Bangladesh Labour Act. Whether fixed-term or permanent, contracts should clearly define the nature of the job, terms of employment, and the rights and obligations of both the employer and the employee.
Notice periods: Ranging from 30 to 120 days, depending on the role and length of service
Termination of employment: Can take place due to resignation, dismissal for cause, retrenchment, or by mutual agreement, following proper legal procedures.
Want to learn more about employment contracts in Bangladesh? Get our full template now!
Employers in Bangladesh are required to provide mandatory employment benefits in accordance with the country’s labour law. Many of them also offer extra perks to stay competitive in the job market. Understanding both of them is essential to attracting and retaining talent.
Leave policies: Paid annual leave, sick leave, parental leave.
Want a full breakdown of all the employee benefits available in Bangladesh?
Bangladesh has a structured tax system that applies to both individuals and businesses. Employers are responsible for withholding income taxes and social security contributions, while additional tax rules apply to royalty income and VAT.
Personal income tax rate: 13% or 23%, depending on the amount of income.
VAT: 15%
Tax allowances: Personal income allowance, Children’s education expenses.
Additional tax reliefs: N/A
Employers are required to pay salaries as outlined in individual or collective contracts, and they can’t be less than the minimum wage set by the Council of Ministers. Salaries must be paid on a monthly basis, unless otherwise agreed upon.
Salary payment deadline: The last day of the month.
Taxes and contributions payment deadline: By the 20th of the following month.
Payroll declarations deadline: By the 20th of the following month
Payroll currency: BDT
In Bangladesh, employment is primarily governed by the Bangladesh Labour Act, 2006, along with its subsequent amendments. Employers must comply with specific rules around wages, benefits, working conditions, and termination procedures.
Total employment cost:
Minimum wage: USD 1,200 (or its BDT equivalent) for skilled workers
Probation period: 3 to 6 months
Need a more detailed overview of Bangladesh’s regulations about employment types, employer obligations, and work conditions?
Foreign citizens working in Bangladesh are required to obtain the appropriate work permits and visas. The process, permit type, and costs are different depending on the applicant’s nationality, job role, and length of stay.
Types of permits: EU, US, and Kosovo nationals can get a five-year Unique permit; other foreign nationals may receive permits of varying lengths.
Process length: Up to 3 months
Process cost: 1800€
Want to learn more about obtaining visas and work permits in Bangladesh? Get our full country handbook now, or click here to find out more!
Utilising EOR services in Bangladesh enables you to employ individuals legally in the country without establishing a local legal entity. The EOR takes over all the legal responsibilities as an official employer, including:
Utilising PEO services in Bangladesh offers HR and administrative support, allowing you to remain the legal employer. PEO services are ideal for employers who already have legal entities in Bangladesh but need support to manage their workforce operations, including:
Native Teams offers a payroll calculator tailored to Bangladesh’s labour regulations. With this tool, you can quickly calculate gross and net salaries, as well as determine employer and employee contributions and other required deductions.
Note: The information provided above is for general guidance only and should not be considered a substitute for legal advice. We strongly recommend consulting with qualified professionals who specialise in local labour laws before making any hiring decisions. While the data was accurate at the time of writing, labour regulations are subject to change, and it is your responsibility to stay informed about the latest developments.
Last update: July 30, 2025
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When hiring a freelancer or gig worker based in Bangladesh, it’s important to understand that they are not covered under the Bangladesh Labour Act, 2006, which means they do not have the same rights and protections as full-time employees. To avoid misclassification risks, businesses should clearly define the nature of the engagement in a written service agreement that outlines deliverables, timelines, payment terms, and intellectual property rights.Â
Freelancers in Bangladesh are generally responsible for managing their own taxes and social security contributions, so employers are not required to withhold or remit these on their behalf. However, businesses should still ensure compliance with international contracting standards and local tax laws, particularly if working with high-value or long-term freelancers.
