Bangladesh is on your radar. Maybe it’s the buzz around the growing tech scene— young, sharp talent and competitive labor costs that make your spreadsheets look like they’re smiling. It sounds good. Really good.
But then you look closer. Contracts need specific terms. Payroll has to factor in local holidays, mandatory bonuses, stuff you didn’t even think about. And if you misclassify someone? That’s not just a whoops. You could be on the hook for back pay, maybe even legal trouble. This guide breaks it all down. No jargon. No guesswork. Just the step-by-step on how to hire and pay employees in Bangladesh—legally and confidently.
Understanding core hiring and employment requirements
Before you post a job, there’s homework to do. Hiring in Bangladesh means setting up properly with the right licenses, understanding your obligations, and deciding if your new team member is an employee or contractor.
Business registration
You’ll need three things before you hire anyone:
- Registration with the Registrar of Joint Stock Companies and Firms (RJSC)
- A trade license from your local city corporation
- A tax identification number (TIN) from the National Board of Revenue (NBR)
Planning to hire non-Bangladeshi nationals? You’ll also need approval from the Bangladesh Investment Development Authority (BIDA).
Employment type
Here’s where it gets real. If you hire someone as a full-time employee, they’re protected by the Bangladesh Labor Act. That means statutory benefits, paid leave, tax withholding, and specific rules for firing and severance.
Contractors, on the other hand, don’t get those protections. They’re governed by civil law and typically work short-term. But if you misclassify someone, you could be on the hook for fines and back payments.
Not sure which route is safest? Many companies lean on an employer of record (EOR) like Pebl to handle classification and stay compliant.
Hiring in Bangladesh—step by step
You’re set up and ready to bring someone on board. Here’s how it typically goes:
- Post the job. Local platforms like Bdjobs.com get solid traction.
- Interview and select. Shortlist candidates and verify credentials.
- Negotiate the offer. Talk salary, benefits, and timing.
- Put it in writing. Every offer should be backed by a legally compliant employment contract.
- Onboard with care. Register new hires for payroll and benefits.
Employment contracts: What to include
A solid employment contract is a must in Bangladesh. Make sure it spells out:
- Salary and how often it’s paid
- Probation period (typically 3-6 months)
- Leave entitlements (casual, sick, annual, maternity/paternity)
- Termination process and severance details
- Working hours, job title, and where the work will be done
Hiring foreign talent? Here’s what changes
If you’re hiring non-Bangladeshi nationals, you’ll need BIDA approval, an e-visa recommendation, and proof of why a local hire couldn’t fill the role. Work permits are usually for specialist, technical, or leadership positions and must be renewed annually.
Getting payroll right
Once someone’s hired, paying them properly is the next hurdle. You’ve got deadlines to hit, taxes to deduct, and benefits to manage.
Payroll systems and how to choose
You have options:
- In-house payroll using local HR or finance staff
- Payroll software with built-in compliance
- A third-party provider (or EOR) that manages it all for you
Whichever route you choose, your system must:
- Calculate salaries and bonuses
- Withhold the right taxes
- Pay employees on time, typically by the 7th of the following month
- File reports with the NBR
Understanding salary structure and benefits
Minimum wages vary by industry. Typical payroll includes:
- Basic salary
- House rent allowance (around 40-50% of base)
- Medical and conveyance allowances
- Festival bonuses (usually two per year)
- Provident fund: 5% contribution from both employer and employee
- Paid leave and 16 weeks of maternity leave
Paying employees: What to know about methods and taxes
Most employers in Bangladesh pay via bank transfer. Some use mobile payments like bKash for short-term or off-site workers.
Taxes are deducted at the source based on a progressive tax structure. You’ll need to:
- File monthly tax returns
- Provide employees with annual salary certificates
- Report all contributions to the provident fund
Your payslips should clearly list:
- Gross salary
- Deductions (income tax, provident fund)
- Net salary
- Employer-paid contributions
Avoiding compliance missteps and handling exits
Here’s where employers often stumble:
- Not signing a contract
- Failing to register employees properly
- Filing taxes late or incorrectly
- Misclassifying workers
How to handle termination
For voluntary resignations, employees usually give 30 days’ notice. If you’re initiating the termination, you’ll need to document the reason and either give notice or pay in lieu.
Severance is typically one month’s salary for every year of service. And yes, you must follow the legal process or risk fines and disputes.
Tips, resources, and leveraging EOR support
Want to make the process smoother?
- Use local experts. HR and legal advisors who know Bangladesh’s labor code can help you navigate gray areas, fast.
- Partner with an EOR. An EOR like Pebl lets you hire in Bangladesh without setting up a legal entity. They handle contracts, payroll, taxes, and compliance so you don’t have to.
An EOR acts as the legal employer on your behalf. You still manage the team day to day, but they handle the paperwork, benefits, and risk management. It’s global hiring without the international headaches.
Pebl makes it easy
There’s a ton of talent in Bangladesh. Impressively so. And the opportunity? It’s real. You can tap into all of it—without getting tangled in red tape, without losing your mind over paperwork.
But only if you do it right. Because if you don’t? That’s when problems start. Missteps, compliance issues, unhappy employees. It’s not a great story. Which is why a lot of companies are turning to EORs. They’re essentially a shortcut, and a really smart one.
Enter Pebl. We help you hire and pay people in more than 185 countries—Bangladesh included—without getting buried in logistics. We handle the contracts, compliance, and payroll. You get to focus on the team, culture, and actual work.
So if you’re thinking, “Okay, we’re ready to go global, but can we not make it painful?”—yep, you can. That’s kind of the whole point.
This information does not, and is not intended to, constitute legal or tax advice and is for general informational purposes only. The intent of this document is solely to provide general and preliminary information for private use. Do not rely on it as an alternative to legal, financial, taxation, or accountancy advice from an appropriately qualified professional. The content in this guide is provided “as is,” and no representations are made that the content is error-free.
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