Employer of Record (EOR) and Payroll in Bangladesh for Your Team

An employer of record is a Bangladesh company that legally employs staff for a foreign business. It issues the contract, runs payroll, withholds income tax and meets Labour Act duties, while the foreign business directs the daily work.

Yes, through an employer of record. Without a registered entity, a foreign company cannot register as an employer or run payroll in Bangladesh itself, so the EOR employs the staff locally and the foreign company pays a monthly service invoice.

Bangladesh has no separate EOR law. The EOR is the legal employer, so it must meet the Bangladesh Labour Act 2006, the Bangladesh Labour Rules 2015 and the Income Tax Act 2023 like any other employer. The foreign client should still avoid creating a fixed place of business in Bangladesh that could make it taxable there as a permanent establishment.

The main one is income tax, which the employer withholds every month under Section 86 of the Income Tax Act 2023 and deposits with the National Board of Revenue. There is no general state social-security contribution for private-sector staff. Provident fund contributions apply where a fund exists. Under the 2026 amendment, establishments with 100 or more workers must set one up, or join the national pension scheme, if two-thirds of workers ask in writing.

Workers covered by the Labour Act get 10 days of casual leave and 14 days of sick leave a year on full pay, one day of annual leave for every 18 days worked, 13 festival holidays, and 120 days of maternity leave after the 2026 amendment. Many employers give more than this minimum.

Yes. Two festival bonuses a year are standard practice. For workers covered by the Bangladesh Labour Rules 2015, they are required after one year of continuous service, each up to one month’s basic wage. We build them into the payroll calendar so they are paid on time.

For a permanent worker paid monthly, the employer must give 120 days’ written notice or pay wages in place of notice, plus any end-of-service benefits due. A permanent worker who resigns gives 60 days’ notice. We calculate the final settlement so nothing is missed.

Foreign nationals need a work permit and the right visa before they start work. Work permits are normally issued for one year and then renewed. Approval depends on the sponsoring employer and the authority involved, such as Invest Bangladesh (which took over BIDA’s role in August 2026) or BEPZA for export processing zones, so we assess each foreign hire before quoting.

You pay the employee’s gross salary and any statutory or agreed benefits, plus a monthly EOR service fee per employee. We send a written breakdown before you hire, so the full monthly cost is clear from the first payslip.

When you will sell to customers in Bangladesh, need licences or contracts in your own name, or expect a large and growing local team. Many clients start with an EOR and move staff to their own company once it is registered.