Employment in Bangladesh is governed by the Bangladesh Labour Act 2006 and the Bangladesh Labour Rules 2015, most recently amended by the Bangladesh Labour (Amendment) Act 2026. Here is what employers need to know about leave, pay, tax and ending employment.
The Labour Act sets minimum paid leave for workers in factories, shops and commercial and industrial establishments. Employers can offer more through their service rules or contracts, but never less.
Paid annual leave accrues in proportion to days worked once a worker has completed a year of continuous service. Unused leave can be carried forward up to a statutory cap or partly encashed.
Paid at full wages each calendar year. It does not carry over to the next year.
Paid at full wages each calendar year, supported by a medical certificate. It does not carry over.
Paid by the employer, usually 60 days before and 60 days after the birth, for women with at least 6 months’ service. Raised from 112 days by the 2025–26 amendments.
The Labour Act has no statutory paternity or shared parental leave for private sector employees. Some employers offer paid paternity leave as a company benefit.
Set up casual, sick, earned and maternity leave in IceHrm as separate leave types, each with its own accrual, carry forward and approval rules. Employees see their live balance before they apply, and managers see who is away on a shared team calendar. Leave management →
Bangladesh has no single national minimum wage. The Minimum Wages Board sets minimum wages sector by sector, and since the 2025–26 amendments they must be reviewed every 3 years instead of every 5.
Monthly minimum for the lowest grade in ready-made garments, effective 1 December 2023, plus mandatory annual increments. Other sectors have their own rates.
With overtime, hours may reach 10 a day and 60 a week, averaging no more than 56 a week over a year.
Overtime is paid at twice the ordinary rate of basic wage plus dearness allowance and any ad hoc or interim pay.
Capture attendance and overtime in IceHrm and feed the hours straight into payroll, so overtime pay reflects what was actually worked. Time & attendance →
The tax year runs from 1 July to 30 June. Employers deduct income tax from salaries at source each month and deposit it with the National Board of Revenue. Individuals file an annual return, normally by Tax Day on 30 November.
| Taxable income (general taxpayers) | Rate |
|---|---|
| First BDT 400,000 | 0% |
| Next BDT 300,000 | 10% |
| Next BDT 400,000 | 15% |
| Next BDT 500,000 | 20% |
| Next BDT 2,000,000 | 25% |
| Remaining income | 30% |
Bangladesh has no general social security contribution for private sector employers. Instead, employment costs come from benefits the Labour Act requires once an establishment reaches a certain size.
Establishments with 100 or more permanent workers must run a provident fund or join an approved pension scheme. The employer matches the employee’s contribution.
Of net profit, for companies above the Act’s size thresholds, shared between workers’ participation and welfare funds.
Establishments with at least 100 permanent workers must provide group insurance.
Budget for the two annual festival bonuses, overtime, and end-of-service payments such as termination compensation or gratuity under your service rules.
Build Bangladeshi pay the way you already structure it, with your own salary components, deductions and formula columns, such as basic, house rent and a provident fund contribution column. Want to know how well IceHrm handles payroll calculations for Bangladesh? Contact us or see Payroll →
The Labour Act sets out specific routes for ending employment, each with its own notice and compensation rules. Dismissal for misconduct requires a written charge, a chance for the worker to respond and an inquiry before a decision is made.
| Type of worker | Employer notice | Worker’s resignation notice |
|---|---|---|
| Permanent, paid monthly | 120 days | 60 days |
| Permanent, other | 60 days | 60 days |
| Temporary, paid monthly | 30 days | 30 days |
| Temporary, other | 14 days | 14 days |
| Reason for ending | Compensation per completed year of service |
|---|---|
| Termination by the employer with notice (permanent worker) | 30 days’ wages |
| Retrenchment (after 1 year’s service; 1 month’s notice also required) | 30 days’ wages |
| Discharge for incapacity (after 1 year’s service) | 30 days’ wages |
| Resignation, 1 to 3 years’ service | 7 days’ wages |
| Resignation, 3 to 10 years’ service | 15 days’ wages |
| Resignation, more than 10 years’ service | 30 days’ wages |
Final settlement, including any compensation and unused earned leave, must be paid within 30 working days of the date employment ends.
The government announces the official holiday list each year. Private employers must give workers 13 paid festival holidays a year and usually align them with the main national and religious holidays below. Several dates follow the lunar calendar and shift each year.
The government list also includes executive-order holidays such as Shab-e-Barat, Shab-e-Qadr and Ashura, and extends the Eid breaks for public offices. Moon-dependent dates can change at short notice.
Leave groups give each office its own holiday calendar, so you can publish your festival holidays once and update the Eid dates when the moon sighting is confirmed. Holiday calendars →
The Labour Act classifies workers as apprentice, badli (substitute), casual, temporary, probationer or permanent. Every worker must receive a letter of appointment and a photo identity card, free of charge.
Probation is 6 months for clerical work and 3 months for other work. For a skilled worker, the 3 month period can be extended by a further 3 months if their skill has not yet been assessed. A worker who continues after probation without a confirmation letter is treated as permanent.
Send appointment letters for e-signing, store them on the employee’s record, and track onboarding with task lists so nothing is missed on day one. Documents & e-signing →
This guide is general information to help you plan HR processes, not legal, tax or financial advice. Employment law and rates change regularly and awards, enterprise agreements and state rules may give employees more than the minimums shown here. Always confirm current requirements with the official sources or a qualified adviser.
Configure leave types, accrual rules and public holidays for Bangladesh, keep employee records and contracts in one place, and run payroll with your own salary components. Want to know how IceHrm handles payroll calculations for Bangladesh? Talk to us.
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