Using an Employer of Record in Bangladesh

Trying to onboard and pay employees in Bangladesh requires compliance with local labor laws, payroll rules, tax obligations, and statutory benefits. Managing these requirements without local expertise can be time-consuming and risky, especially for companies expanding into new markets.

Using an Employer of Record (EOR) in Bangladesh helps simplify the process. An EOR like Payoneer Workforce Management acts as the legal employer on your behalf, supporting payroll, employment contracts, benefits administration, and compliance with Bangladeshi labor laws, while you retain full control over your team’s day-to-day work.

Learn more about Payoneer Workforce Management, or keep reading to learn how an Employer of Record in Bangladesh can support your efforts to engage international talent.

How to hire employees in Bangladesh

To engage talent in Bangladesh, companies generally have three options.

1. Set up a local entity: This gives companies full operational control but comes with high set-up costs and ongoing obligations. It requires managing payroll, taxes, and benefits locally.

2. Hire independent contractors: This is best suited to short-term or project-based work and offers more flexibility. However, misclassifying employees as contractors can lead to penalties, including retroactive tax and benefit payments.

3. Engage employees through an EOR: Using an Employer of Record in Bangladesh allows businesses to legally access talent without setting up a local entity. The EOR assists with managing payroll, taxes, benefits, and labor law requirements.

Payoneer Workforce Management acts as an Employer of Record in Bangladesh and assists you with onboarding, payroll, and also supports with mitigating risks related to contractor misclassification.

How to onboard employees in Bangladesh

Onboarding employees in Bangladesh involves issuing a compliant employment agreement, collecting employee documentation, registering for payroll, and enrolling employees in benefits where applicable.

Typical onboarding responsibilities may include:

• Setting up payroll and benefits: Register local employees in the payroll system and ensure they are enrolled in all legally required benefit programs in accordance with local employment standards.
• Arranging equipment and access: Provide the local talent with the appropriate hardware, tools, and system access so they can begin their work smoothly from day one.
• Conducting an initial orientation: Host an orientation session during the employee’s first week to review company policies, outline the onboarding process, and clarify expectations for their role.
• Facilitating team introductions: Coordinate opportunities for the new employee to meet their immediate team members and interact with colleagues across the broader organization.

Payoneer Workforce Management enables companies to compliantly engage talent across borders through its technology platform.

Pay employees in Bangladesh

Bangladesh payroll must follow local rules around currency, pay schedules, minimum wages, bonuses, and statutory benefits.

Payroll basics

Employers should pay employees in Bangladeshi taka (BDT). Salaries are typically paid on the last day of each month. The minimum wage in Bangladesh is BDT 12,500 per month.

Income tax

Bangladesh applies a progressive income tax system, with rates ranging from 0% to 30%, depending on income level.

End of service benefit

Employees are entitled to an end-of-service benefit based on their length of service.

Length of service	Benefit
Up to 10 years	At least 30 days’ wages per completed year
More than 10 years	45 days’ wages per completed year

The benefit is payable for each completed year of service or for service periods exceeding 6 months.

Annual bonus

Employees are entitled to 2 annual festival bonuses, based on their religious affiliation:

• Muslim employees receive bonuses for both Eid-ul-Fitr and Eid-ul-Azha
• Hindu employees receive 2 bonuses for Durga Puja
• Christian employees receive 2 bonuses paid at Christmas

Health coverage and social security

Bangladesh does not operate a national public health insurance system. Government-run Essential Health Services Packages (ESP) provide access to basic healthcare services, including outpatient and inpatient care.

There is no mandatory national social security contribution scheme. The Employees’ Provident Fund is optional, although some employers choose to contribute.

An EOR, like Payoneer Workforce Management, offers a streamlined way to pay employees in Bangladesh. Our unified, all-in-one platform gives you a single dashboard to manage a global workforce and enables you to pay contractors and employees in just a few clicks.

Employment laws in Bangladesh

Any company engaging employees in Bangladesh must adhere to local employment laws and regulations. Here’s what you need to know.

Working hours and overtime

The standard working schedule is 8 hours per day and up to 48 hours per week. Total working time, including overtime, must not exceed 10 hours per day or 60 hours per week. Average weekly working hours must not exceed 56 hours over the course of a year.

Overtime is paid at 2 times the employee’s wage and is calculated on basic pay, DA, and ad-hoc wages. Previously paid overtime and bonuses are excluded from overtime calculations.

Employees required to work on weekends are entitled to compensatory time off. Work performed on public holidays entitles employees to 1 substitute holiday plus 2 days’ compensatory wages.

Probation

Probation periods are set as follows:

Role type	Maximum probation
Most workers	3 months
Clerical workers	6 months

Probation may not exceed 6 months in total. There is no statutory notice requirement during probation, though Payoneer Workforce Management recommends a minimum notice period of 14 days.

Businesses may get support to stay compliant with local labor laws by using Payoneer Workforce Management’s infrastructure.

Minimum wage in Bangladesh

The minimum wage in Bangladesh is currently BDT 12,500 per month. It’s important to check regularly for any changes to minimum wage rates to stay compliant with local laws.

Employment contracts in Bangladesh

Employment contracts in Bangladesh are legally binding and must include key terms and conditions. These usually include:

• Company and employee information
• Start date and term of employment (e.g., permanent, fixed term)
• Job title and description
• Base salary and benefits
• Working hours, overtime pay, and leave entitlements
• Probationary period details
• Termination details

Always check local regulations to see what needs to be included in Bangladeshi employment contracts.

Payoneer Workforce Management allows you to onboard talent quickly and securely with localized contracts and payroll.

Leave policy in Bangladesh

Employers in Bangladesh must provide statutory leave entitlements covering public holidays, earned leave, sick leave, and maternity leave.

Public holidays and vacation time

Bangladesh observes 11 public holidays each year.

Vacation time/earned leave accrues at a rate of 1 day for every 18 days worked and becomes available after 1 year of service.

Unused vacation leave may be carried forward to the following year, subject to a maximum accumulation of 60 days. If vacation leave is requested and not granted, it may be carried forward without a cap. Any accrued leave must be paid out upon termination.

Parental leave

Maternity leave in Bangladesh is 120 days.

Paternity leave is not mandated by law, although some employers choose to offer it as a benefit.

Sick and casual leave

Employees in Bangladesh are entitled to 14 days of sick leave per year. They are also entitled to 10 days of casual leave for personal or emergency reasons.

Work permit in Bangladesh

The rules for work permits in Bangladesh vary depending on the employee’s country of origin and the role being performed. It’s important to check government websites and resources for specific details.

Background check in Bangladesh

Employers may want to conduct background checks before engaging an employee in Bangladesh. These may include criminal record checks, employment history verification, education verification, and social media checks, depending on applicable regulations. 

Employers typically need the employee’s consent and must disclose the nature of the checks being performed. It’s important to check local regulations before running any background checks.

Employment termination in Bangladesh

Employment termination in Bangladesh must follow statutory notice and severance rules. Termination procedures vary by circumstance and should be handled on a case-by-case basis.

Valid termination scenarios

Employment may end due to employee resignation, mutual agreement, termination during probation, or employer-initiated termination for misconduct, performance issues, absenteeism, or redundancy.

Notice requirements

Statutory notice periods apply as follows:

Scenario	Notice period
Employee resignation	60 days
Employer termination	120 days
Minimum notice (both parties)	60 days

Severance pay

Employees are entitled to severance pay equal to 1 month of salary for each completed year of service.

Company registration in Bangladesh

Companies may choose to register a business in Bangladesh to establish a permanent presence, access local markets, or meet long-term strategic goals. Details on registration requirements are available through government resources.

However, for many businesses, using an EOR in Bangladesh is a faster and streamlined way to engage talent. 

Payoneer Workforce Management enables compliant onboarding and engagement of talent in 160+ countries without having to set up a legal entity.

PEO in Bangladesh

A Professional Employer Organization (PEO) in Bangladesh can support HR and payroll functions, but requires you to have a legal entity in-country. 

On the other hand, an Employer of Record in Bangladesh does not require a legal entity and instead acts as the legal employer for your local team. This often makes it the better choice for companies new to the Bangladesh market.

Payoneer Workforce Management’s Employer of Record services in Bangladesh

Payoneer Workforce Management helps growing companies onboard, pay, and manage employees in Bangladesh without setting up a local entity. 

As your EOR in Bangladesh, we offer assistance with employment contracts, benefits administration, taxes, and payroll, while you retain control over daily operations.

Book a demo to learn more about Payoneer Workforce Management.

FAQs

1) What is an Employer of Record in Bangladesh?

An Employer of Record in Bangladesh is a third-party organization that legally employs workers on your behalf and manages payroll, taxes, and employment contracts, so you can engage talent without a local entity.

2) How much does it cost to hire Bangladeshi talent?

The employer cost is approximately 5.5% on an annual salary of USD 60,000. Use our employee cost calculator for a detailed employment cost estimate.

3) Why should you hire talent with an EOR in Bangladesh?

An Employer of Record in Bangladesh can help streamline the process of engaging local talent. Payoneer Workforce Management allows you to onboard and pay independent contractors and employees across the globe in 70+ currencies, without setting up a local entity.