Hire in Bangladesh
Here’s where you get started with human resources best practices and hiring in Bangladesh.
Bangladeshi Taka (BDT)
Key Country Facts
Bangladesh, officially the People’s Republic of Bangladesh, is a country in South Asia. It is the eighth-most populous country in the world, with a population exceeding 163 million people. Bangladesh is a unitary parliamentary democracy and constitutional republic following the Westminster system of governance. The country is divided into eight administrative divisions and 64 districts.
Bangladesh covers an area of 148,560 km2 and shares land borders with India to the west, north, and east, Myanmar to the southeast, and the Bay of Bengal to the south. It is narrowly separated from Nepal and Bhutan by the Siliguri Corridor, and from China by the Indian state of Sikkim in the north, respectively.
Bangladesh has a typical monsoon climate characterized by rain-bearing winds, moderately warm temperatures, and high humidity. A mild winter lasts from October to March, and a hot, humid summer from March to June. Natural calamities, such as floods, tropical cyclones, tornadoes, and tidal bores occur almost every year.
The region that is now Bangladesh has been part of a few political entities, including Indian empires, Buddhist kingdoms, the Moghul empire, the British empire and the Pakistani nation. The culture of Bangladesh has also been influenced by Hinduism, Jainism, Islam, Buddhism, and Christianity. Bangladeshi identity solidified around the importance of the Bengali mother tongue and the distinctiveness of a way of life connected to the floodplains of the region.
The Constitution grants freedom of religion and Bangladesh is officially a secular state. Islam is the state religion but it proclaims equal recognition of Hindus, Buddhists, Christians and people of all faiths. Islam is followed by over 90% of the population, Hinduism by ~8.5% and the rest are largely Christians or Buddhists.
The predominant language of Bangladesh is Bengali (also known as Bangla). More than 98% of people in Bangladesh speak Bengali as their native language. The Bengali Language Implementation Act, 1987 made it mandatory to use Bengali in all government affairs in Bangladesh. Laws historically written in English were translated into Bengali after the act. All subsequent acts, ordinances and laws have been promulgated in Bengali since 1987.
Bangladesh HR at a Glance
Bangladesh’s employment law is regulated by the 2006 Labour Act (‘Act’) and the 2015 Labour Rules (‘Rules’). The Act and Rules apply to employees working in commercial and industrial enterprises. The laws and regulations prescribe working hours, weekly vacations, annual leave, medical leave. It also uses the company’s profits for gratuity benefits, provident funds and participation.
Written employment contracts are standard in Bangladesh. The terms of the contract are legally-binding between the parties and. If there is no written employment agreement, employers must issue a letter of appointment.
It is legally required for the employer to issue an appointment letter upon hiring an employee, in writing, in the local language (Bengali) if there is no employment contract. The appointment letter should contain the following information:
the name of the worker
the name of the worker’s parents
the name of the worker’s spouse, if applicable
the present and permanent addresses of the worker
the designation of the worker
the type of work to be undertaken by the worker
the date on which the worker will join the establishment
the class of the worker
the wages or pay scale (wages or salary and the rate of the increase of annual salary, if any)
other payable financial benefits (house rent, medical expenses, education, food, conveyance, festival and attendance allowances and gratuity, if any)
a statement that the conditions of appointment will be governed by the establishment’s existing service rules, if any, and the existing Labour Act.
Workers employed in any institution are graded according to the type and condition of their work in any of the following classes:
The minimum age for workers in Bangladesh is 16 years.
Neither the Labour Act nor the Labour Rules restricts or prohibits carrying out background checks. An employer can conduct its own checks or hire a third party to do so.
Probation Period / Trial Period
Probation periods vary between industries:
If nature of work is clerical – 6 months
Other workers – 3 months, but extendable for a maximum of another 3 months if it is not possible to ascertain the quality of work in the 1st 3 months
A worker will be deemed to be a permanent worker after the completion of his or her probationary period, even if a confirmation letter has not been issued.
The maximum working week is 48 hours, normally spread over six eight-hour days. The weekly day of rest is generally Friday as Bangladesh is a majority Muslim country.
Full-time workers are entitled to one hour of break each day, which can be divided into two half-hour breaks or taken in one go.
The daily maximum number of hours an adult worker may be required to work is 8. The weekly maximum working hours of an adult worker is 48, with an additional 12 at overtime pay (maximum 60 hours/week), while maintaining a maximum annual average of 56 hours per week. Extra working hours or overtime shall not more than 2 hours a day, or total working hours in a day shall not be more 10 hours a day.
Overtime rate at twice the ordinary rate of the basic wage.
If a worker is required to work on festival leave, the employer is required to provide the worker with one substitute holiday and two days’ pay.
Employees who have been with a company for at least one year receive two festival bonuses annually. There is no mandatory minimum amount unless stipulated in the employment contract, but each festival bonus shall not be more than the basic wage amount.
An employer may dismiss a worker without notice or payment in lieu of notice if the worker has been convicted of any criminal offence or if the worker has been found guilty of misconduct.
A worker may be terminated from employment without any cause by giving the prescribed notice or pay in lieu.
A permanent worker may resign his service by giving the employer 60 days’ notice in writing. A temporary worker may resign by giving the employer 30 days notice in writing (for monthly rated worker) or 14 days notice, for other workers. Where a worker resigns without notice, he may do so by paying the employer an amount equal to the wages for the period of notice, in lieu of notice.
Termination without cause
An employer may dismiss an employee on a permanent contract by giving him a notice in writing of 120 days for monthly rated employees and 60 days for other employees.
An employer can pay compensation in lieu of the notice equivalent to 30 days wages for each completed year of service or gratuity, whichever is higher.
Resignation by employee
A permanent employee may resign by giving 60 days notice, in writing, to the employer. A temporary worker may resign by giving 30 days notice (for monthly rated) and 14 days notice, in writing (for other workers).
To resign without any notice, the employee may pay the employer an amount equal to the wages for the period of notice.
Redundancy / Severance Pay
For termination due to employee’s ill health or redundancy, severance must be paid if the employee has been in service with the same employer for at least 1 year. The amount varies depending on employee’s length of service.
For <10 years continuous service – 30 days wages for every year of service
For >10 years continuous service – 45 days wages for every year of service
If an employee is dismissed due to misconduct, he/she is not entitled to any compensation.
Where a permanent worker resigns, gratuity is paid according to years of service:
>5 but <10 years – 14 days wages for every completed year of service
>10 years – 30 days’ wages for every completed year of service
Post-Termination Restraints / Restrictive Covenants
The validity and enforceability of a non-compete clause is governed by Section 27 of the Contract Act 1872 of Bangladesh which states ‘Every agreement by which any one is restrained from exercising a lawful profession, trade or business of any kind, is to that extent void’. Thus, any agreement to restrain trade, profession or business is void.
However, employers may attempt to have restrictive covenants by having a carefully drafted, clear and precise ‘non-compete’ clause, and ensure there is the employee’s agreement. The employer should also have provisions for liquidated damage and limit the period of time and be able to show proof that there is confidential information or trade secrets to be protected.
Fixed-term contracts are permissible under the category of temporary employment. The law does not stipulate a maximum duration for such employment.
Tax and Social Security
The salary paid to employees is subject to income tax deduction at source. All remuneration and benefits received by an employee who is resident in Bangladesh, or for services rendered in Bangladesh, are taxable.
Taxable remuneration and benefits include salary, bonuses, commissions, accommodation allowances, transport benefits, education allowances for children, employer-provided domestic assistance, leave encashment and medical allowances.
Personal Income Tax
|Income Level (BDT)||Tax Rate (%)|
|Up to 300,000||
|On amount >500,000||25.0|
Employees in Bangladesh are not required to contribute towards a social security fund. However, companies with paid-up capital of at least BDT 10 million, or with value of permanent assets of at least BDT 20 million need to pay 5% of their profits into a Workers Profit Participation Fund. No contribution from employees is required in this case.
There is no social security tax.
*The above rates serve as a broad guideline. Actual rates charged will differ.
Salary payment or remuneration >BDT 20,000 has to be by bank transfer. Salary must be paid before the end of the 7th day after the last day when the wage is payable.
Employees who have completed one year of continuous service with an employer is entitled to annual leave:
one day for every 18 days of work, in the case of a shop, commercial, industrial, factory or road transport establishment worker
one day for every 22 days of work, in the case of a tea plantation worker
one day for every 11 days of work, in the case of a newspaper worker
If an employee does not use all accrued overtime in a year, he or she can carry forward unused time, subject to the following limitations:
Up to 40 days for factory or road transport workers
Up to 60 days for shop, industrial, commercial or tea plantation workers
All employees (except newspaper workers) are entitled 14 days of paid sick leave in a calendar year. Employees must present a medical certificate to receive sick leave.
Maternity & Parental Leave
Employees who have been in service of the same employer for at least 6 months are eligible for maternity leave of eight weeks before delivery and eight weeks after.
Employees who have worked less than 6 months, or who have 2 or more surviving children, are only entitled to unpaid leave.
Women are not allowed to work for 8 weeks after giving birth.
Even if a female employee gives notice of maternity leave after the birth of her child, she is still entitled to the maternity benefits of eight weeks following date of delivery.
- There is no statutory paternity leave.
Casual leave is for the purpose of sudden illness, minor accidents and urgent issues. Prior application is required, unless the situation prevents such application from being made.
Employees are entitled to 10 days of paid casual leave per year, and this cannot be carried forward to the next year.
There are 15 major public holidays each year, 11 of which are paid days (also known as festival leave).
The employees are entitled to payment if the bargaining contract states that they should be paid on the optional holidays or when the employees are under a union that advocates for their wages and salaries.
Benefits to the Employee in Bangladesh
In certain situations, such as death, retrenchment, discharge or termination of employment, a worker is entitled to compensation or gratuity, whichever is higher.
A worker may also be entitled to compensation in the event of a layoff or dismissal in certain circumstances.
Further, a worker may be entitled to provident fund, if the fund has been constituted in the establishment.
A worker may also be entitled to workers’ profit participation fund and workers’ welfare fund, if applicable to the establishment.
Employers are required to provide compensation to employees who sustain a work-related injury. Compensation depends on the age of the worker.
Old-age Social Pension
For men aged 65 and above or women aged 62 and above whose annual income does not exceed BDT 10,000, and not receiving any other government or nongovernment allowance. Only one member of a family can receive the pension.
Disability Social Pension
Must be aged 6 or older and medically assessed with a sensory, mental, speech, or physical disability, not receiving any other government or nongovernment allowance and if the annual income does not exceed BDT 36,000.
Survivor Social Pension
This is paid to widows and women who are divorced or abandoned by their husbands, and do not receive any other government or nongovernment allowance, and if their annual income does not exceed BDT 12,000.
Large companies may provide employees with additional benefits such as:
Private health insurance
Most companies in Bangladesh provide provident benefits to their permanent employees, which are usually derived from employer and employee contributions. They also usually provide gratuity benefits to permanent employees.
Visas and Foreign Workers
There are no numerical limitations on short-term visas. Employment visas and work permits are available for employees transferring from one corporate entity in a foreign jurisdiction to a related entity in Bangladesh if the labour market test is satisfied (ratio of foreign to local employees).
A foreign worker must obtain an employment visa and a work permit to work in Bangladesh.
A labour market test is required as a precursor to an employment visa and a work permit. An advertisement must be published in a daily newspaper or online for the recruitment of local personnel before the appointment of a foreign national.
The current maximum ratio of foreign to local employees is 1:5 for commercial offices and 1:20 for industrial enterprises.
Foreign nationals are generally taxed only on income earned from working in Bangladesh and on foreign income received from Bangladesh sources.
Public Holidays in 2022
|1||Shaheed Day||February 21st|
|2||Sheikh Mujibur Rahman’s Birthday||March 17th|
|3||Shab e-Barat||March 18th|
|4||Independence Day||March 26th|
|5||Bengali New Year / Bihu||April 14th|
|6||Jamatul Bidah||April 29th|
|7||Eid Ul Fitr||May 2nd|
|8||Buddha Purnima||May 16th|
|9||Laylat al Qadr||May 28th|
|10||Eid ul-Adha||July 10th|
|12||National Mourning Day||August 15th|
|13||Shuba Janmashtami||August 19th|
|14||Vijaya Dashami||October 5th|
|16||Victory Day||December 16th|