Payroll outsourcing in Bangladesh means a local provider calculates and pays salaries in taka, withholds income tax for the National Board of Revenue, administers Provident Fund, gratuity and festival bonuses under the Bangladesh Labour Act 2006, and reports the result to the client's finance team. EORBangladesh provides it as part of Employer of Record and as a standalone service for companies with their own entity.
What is included in outsourced payroll from EORBangladesh?
Monthly gross-to-net calculation in BDT, payslips, bank payment files, income-tax withholding and remittance to the NBR, Provident Fund and gratuity administration, festival-bonus calculation, statutory registers, and a consolidated report in USD, GBP or EUR with every BDT line visible.
- Salary structuring into basic wage (typically 60% of gross) and allowances so statutory calculations on basic are correct
- Income-tax deduction at source under current NBR rates, monthly remittance and the annual salary certificate for each employee
- Provident Fund contributions at 8% employee / 8% employer, with fund statements twice a year
- Gratuity accrual tracking and final-settlement calculation
- Festival bonus calculation and payment before Eid-ul-Fitr and Eid-ul-Adha (or the employee's own festivals)
- Leave encashment, overtime at twice the basic hourly rate (s.108), and final settlements on exit
- Payroll journal and reconciliation for your ledger, plus year-end reporting
What must be paid into Provident Fund and gratuity for Bangladesh staff?
Where a Provident Fund is constituted, the Act provides for an employee contribution of not less than 7% and not more than 8% of basic wages, matched equally by the employer (Bangladesh Labour Act 2006, s.264). Gratuity under the Act is a minimum of 30 days' wages for each completed year of service, rising to 45 days' wages per year where service exceeds 10 years (Bangladesh Labour Act 2006, s.2(10)). Employees also receive two festival bonuses each year, each capped at one month's basic wage, for employees with at least one year of continuous service (Bangladesh Labour Rules 2015, Rule 111).
How this affects your cost. On a BDT 150,000 gross salary with a BDT 90,000 basic, employer PF adds BDT 7,200, gratuity accrual BDT 7,500 and festival-bonus accrual BDT 15,000 a month — about 20% on top of gross. The
pricing page shows the full worked invoice.
How does the monthly payroll cycle run?
- By the 20thYou confirm joiners, leavers, salary changes, bonuses and reimbursements in the shared tracker.
- 21st–24th — Calculation and approvalWe produce the gross-to-net file and a variance report against last month for your sign-off.
- Last working day — Pay dateSalaries paid in BDT; payslips issued to employees by email and portal.
- By the 15th of the following monthIncome tax remitted to the NBR and Provident Fund contributions deposited.
- 28th — ReportingConsolidated invoice or journal in your currency with BDT detail and the exchange rate applied.
How is income tax withheld from salaries?
Employers must deduct income tax at source from salary at the rates set by the NBR under the current Finance Act and remit it monthly, issuing each employee an annual certificate. Current rules provide a tax-free threshold of BDT 375,000 for individuals (higher for women, senior citizens and persons with disabilities) and progressive rates of 5% to 30% above it (Finance Act 2026, FY 2026–27). Withholding failures are the employer's liability, which is one reason foreign companies without a local finance function use an EOR.
How is payroll reported to a foreign finance team?
You receive one document per month showing gross salary, each statutory deduction and employer cost, net pay, and the EORBangladesh fee, in your invoicing currency with the BDT amounts and the Bangladesh Bank rate used. Files are provided in PDF and CSV for import to Xero, QuickBooks, NetSuite or SAP; a sample report is available on request.
This page is informational only and is not a substitute for licensed legal or tax advice in Bangladesh or in your own jurisdiction. Statutory figures are quoted from the Bangladesh Labour Act 2006 as amended, the Bangladesh Labour Rules 2015 and current NBR rules, and were reviewed by Farhana Rahman, LL.M on 1 September 2026.