Payroll in Bangladesh

Mercans is your premier partner for top-quality payroll services in Bangladesh, offering both Managed and SaaS solutions. Our steadfast commitment to delivering exceptional payroll outsourcing in Bangladesh is unmatched. Drawing from extensive experience in the payroll sector, Mercans ensures precise and compliant payroll services, establishing us as the preferred option for businesses of all sizes. Count on Mercans for prompt and accurate payroll transactions, complemented by the convenience of multi-currency payments tailored to the Bangladeshi market. As your dedicated local payroll provider in Bangladesh, we feature a team of in-country payroll specialists well-versed in local regulations, providing comprehensive assistance for a seamless payroll experience customized to your business requirements.

Payroll Services in Bangladesh

At Mercans, our unwavering commitment to local compliance in Bangladesh goes beyond a mere checklist. We proactively navigate the intricate regulatory landscape — including the sweeping Bangladesh Labour (Amendment) Act 2026 — ensuring your business aligns seamlessly with the country’s norms. Here’s an insight into how Mercans expertly manages key activities, safeguarding both compliance and operational efficiency:

Comprehensive Services Include

Payroll Settlement

• Precise calculations encompassing income tax deducted at source, provident fund contributions where applicable, and other deductions.
• Inclusion of overtime, festival allowances, and applicable benefits.
• Monthly file preparation for tax deducted at source (TDS) filings with the National Board of Revenue (NBR).

Payment Processing

• Generation and delivery of payslips.
• Efficient management of statutory benefits, leave entitlements, and provisional costs.
• Streamlined handling of payments through a compliant local Bangladeshi Taka (BDT) bank account.

Regulatory Compliance

• Preparation of the annual statement of salary payments and employee return information required by the NBR.
• Accurate monthly withholding and remittance of tax deducted at source.
• Ongoing monitoring of Bangladesh’s active labour law reform programme and evolving Finance Act provisions.

Statutory Fund Management

• Provident fund administration where applicable, including tracking Bangladesh’s new size-based mandatory provident fund threshold.
• Workers’ Participation and Welfare Fund calculations for qualifying establishments.
• Expert management of NBR filings and e-TIN registrations.

Minimum Wages in Bangladesh

Bangladesh does not have a single, universal national minimum wage. Instead, minimum pay is set sector by sector through dedicated Minimum Wage Boards, covering more than 40 gazetted sectors. The best-known figure, BDT 12,500 per month, is the minimum wage specifically for the ready-made garment (RMG) sector, effective since December 2023 and topped up with annual increments. For general private-sector or office-based roles not covered by a specific sector wage board, no statutory minimum wage floor applies — pay is instead governed by the individual employment contract and the general provisions of the Labour Act. Mercans confirms the applicable wage board and rate, if any, for each specific role and sector.

Working Hours

Under the Labour Act 2006 (as amended), standard working hours are 8 hours per day and 48 hours per week. With overtime, the working day can extend up to 10 hours, and the working week up to 60 hours, with an average of 56 hours per week. Female workers may not work night shifts (10:00pm–6:00am) without their consent.

Probation Period

The statutory probation period is 6 months for clerical workers and 3 months for other categories of workers.

Payroll Cycle in Bangladesh

The payroll cycle in Bangladesh can be structured on a daily, weekly, bi-weekly, or monthly basis, depending on the employer and sector. Employees must receive their salaries within seven days following the end of the relevant pay period. Salaries are paid in Bangladeshi Taka (BDT), generally via a local bank account.

Company Registration in Bangladesh

When establishing a business presence in Bangladesh to run local payroll, foreign companies typically choose from the following structures:

Setting up and maintaining any of these structures — including the ongoing corporate compliance obligations that come with them — requires dedicated legal and administrative resources. Mercans’ Employer of Record and Global Payroll solutions allow companies to hire and pay employees in Bangladesh without first establishing any of these entities.

Employer Registration for Payroll in Bangladesh

Companies must obtain an e-TIN (electronic Taxpayer Identification Number) from the National Board of Revenue (NBR), a fully digital process generally completed within a few working days once the company is incorporated. Employees whose income exceeds the applicable tax-free threshold — or whose employer requires a TIN for payroll purposes regardless of income level — must also each obtain their own individual e-TIN.

Depending on company size, employers may additionally have obligations toward a provident fund and toward the Workers’ Participation and Welfare Funds, both described below.

Payroll Taxes in Bangladesh

Personal Income Tax in Bangladesh

Bangladesh applies a progressive personal income tax scale, updated by the Finance Act 2026 for the assessment year beginning 1 July 2026. The general tax-free threshold rose to BDT 400,000, with higher thresholds for women, senior citizens, persons with disabilities, and gazetted freedom fighters.

Women and senior citizens (65+) benefit from a higher tax-free threshold of BDT 425,000, persons with disabilities BDT 500,000, and gazetted freedom fighters BDT 525,000. Non-resident foreigners are generally taxed at a flat 30% rate. Because Bangladesh’s tax administration has been undergoing significant restructuring, with NBR functions recently split between separate policy and enforcement bodies, Mercans confirms the exact current thresholds and any filing extensions before processing payroll for each engagement.

Tax Reporting

Employers must remit tax deducted from employee salaries within approximately 15 days of the relevant month’s end, submit an annual statement of salary payments by 1 September, and submit annual employee return information by 15 April. Individual income tax returns are statutorily due by 30 November each year (Tax Day), though the tax authority has in recent cycles granted filing extensions of several months — Mercans monitors the current-year deadline for each engagement rather than assuming the statutory date will hold without extension.

Provident Fund and Workers’ Welfare Funds in Bangladesh

Provident Fund — New Mandatory Threshold

Historically, establishing a provident fund was voluntary unless at least three-quarters of employees formally petitioned the employer to create one. Under the Bangladesh Labour (Amendment) Act 2026, establishments with 100 or more permanent workers must now establish and maintain a provident fund, or alternatively enrol eligible workers in the government’s voluntary Universal Pension Scheme if sufficient employees request it in writing. Where a provident fund applies, both employer and employee typically contribute 7–8% of monthly basic salary, with employer contributions matching the employee’s.

Workers’ Participation and Welfare Funds

Separately, under Chapter XV of the Labour Act, a company whose paid-up capital reaches at least BDT 1 crore, or whose fixed assets reach at least BDT 2 crore, must pay 5% of the prior year’s net profit into a combination of funds: 80% to a Workers’ Participation Fund distributed directly to eligible workers, 10% to a Workers’ Welfare Fund, and 10% to the national Bangladesh Workers’ Welfare Foundation Fund. This payment is due within 9 months of the close of the relevant accounting year.

Universal Pension Scheme

Bangladesh’s Universal Pension Scheme, including its private-sector “Progoti” track, remains voluntary as of this writing, offering a monthly pension from age 60 after a minimum of 10 years’ contribution. While not currently mandatory, Mercans monitors ongoing government efforts to expand enrolment in case participation requirements change.

Termination and Notice Periods in Bangladesh

Termination in Bangladesh is governed by the Labour Act 2006, as amended. Notice periods depend on the employee’s status and pay structure:

Either party may pay wages in lieu of notice instead of serving the notice period. Employees resigning after 5 years of service are generally entitled to compensation of 14 days’ wages per year of service, rising to 30 days’ wages per year of service after 10 or more years. The 2026 amendment also reduced the minimum service required for lay-off compensation eligibility from 1 year to 3 months, with compensation set at a minimum of 50% of basic wages.

Employee Benefits in Bangladesh

Mercans, in adherence to Bangladeshi labour law, ensures that employees receive the right benefits by staying vigilant about statutory deductions and entitlements.

• Annual Leave: Varies by industry — commonly 1 day of leave for every 18 days worked in factories and shops, 1 day per 22 days in tea plantations, and 1 day per 11 days in newspaper establishments.
• Festival Holidays: 11 paid holidays per year for government-declared national holidays.
• Casual Leave: 10 days of paid casual leave each calendar year.
• Sick Leave: 14 days of paid sick leave annually (non-carryover), requiring a medical certificate.
• Maternity Leave: Increased under the 2026 amendment to 120 days total (60 days before and 60 days after delivery), paid in full.

Benefits of Payroll Outsourcing in Bangladesh

For our payroll services, we have strategically implemented a robust tool designed to seamlessly operate across diverse countries, ensuring regional uniformity and meeting the specific requirements of our clients. This tool reflects our commitment to delivering:

• Stringent Data Security Measures Incorporating industry-leading security measures to safeguard sensitive data, including compliance with GDPR, SOC, ISO, and OWASP standards. ISO 27001 and ISAE3402 certifications ensure adherence to stringent information security protocols, guaranteeing the highest level of data protection.
• Consistent and Sustainable Performance: Ensuring reliable performance that meets the dynamic demands of payroll services, providing clients with consistent and sustainable solutions, even as Bangladesh’s labour law and tax administration continue to evolve.
• Flexibility and Scalability: Offering flexibility and scalability to accommodate evolving client needs and adapt to changing business environments, ensuring seamless integration and expansion.
• Collaborative Cloud Platform: Utilizing a cloud-based platform that facilitates collaborative work, promoting efficiency and accessibility across teams, enhancing collaboration and productivity.

Key Features of Electronic Payroll Support

• Full Traceability: Enabling a traceable process from generation to transmission and validation, ensuring transparency and accountability at every step.
• Efficiency in Human Resources: Enhancing the efficiency of the human resources area by streamlining the payroll settlement process, resulting in significant time savings and improved resource allocation.
• Certified Suppliers: Partnering with certified suppliers who uphold the highest standards of information security with ISO 27001 certification, ensuring secure data transmission processes and bolstering the integrity of our services.

Payroll Solutions in Bangladesh

Uncover the potential of seamless payroll processing in Bangladesh with Mercans’ Global Payroll Solutions. Our flexible models ensure local compliance, support multi-currency transactions, and offer connectivity to global Human Capital Management (HCM) and Enterprise Resource Planning (ERP) systems. Paying correctly has never been more straightforward.
Explore Our Flexible Models

• SaaS (Software as a Service): Tailored for enterprise businesses managing multi-country payroll with intricate complexities arising from diverse data points, locations, currencies, and languages. Our SaaS model streamlines operations for optimal efficiency.
• Managed Services: Designed for mid-sized and large enterprise businesses, our Managed Services model caters to those operating multi-country payroll. It provides on-demand HR expertise, ensuring security, reliability, and compliance across the board.
• HRMS (Human Resource Management System): Perfect for mid to large businesses in expansion mode, our HRMS model offers a comprehensive range of functionalities, including payroll and benefits. Businesses can select the specific features they need, ensuring a tailored and efficient solution.

Streamline Payroll with Mercans’ Technology and Integrations

Mercans leads the way in providing top-tier payroll solutions in Bangladesh, offering a diverse range of tailored options to meet our clients’ unique needs. Choose Mercans as your reliable ally, ensuring a smooth and effective payroll process in Bangladesh’s dynamic business environment.

• Cutting-Edge Technology: Explore the forefront of innovation with Mercans’ state-of-the-art technology, driving our global payroll solutions.
• Seamless Integrations: Effortlessly integrate your Human Capital Management (HCM) systems with Mercans’ solutions, enhancing connectivity and efficiency.
• Recognized Excellence: Partner with an esteemed organization known for its commitment to excellence in delivering outstanding payroll services.

Outsource to Payroll Company in Bangladesh

In the dynamic business landscape of Bangladesh, Mercans stands as a beacon of excellence, offering tailored solutions to meet the diverse needs of our clients. With a large, youthful workforce, growing non-garment sectors, and a rapidly evolving regulatory environment following the 2026 Labour Act reforms, Bangladesh presents unique opportunities for business expansion. Mercans is your trusted partner in navigating the complexities of the Bangladeshi market. Our unwavering commitment to 100% local compliance, coupled with our extensive knowledge of Bangladeshi labor laws, ensures that businesses establish a solid presence in Bangladesh with ease. By choosing Mercans, companies can leverage our expertise to streamline operations, adhere to statutory requirements, and lay the groundwork for sustained growth in this dynamic environment. With Mercans by your side, embark on a journey of success and prosperity in Bangladesh’s vibrant business landscape.