Payroll Compliance · Bangladesh
Salary TDS and Statutory Compliance in Bangladesh
We calculate tax deducted at source on every salary, deposit it on time, file the quarterly withholding returns and keep your payroll in line with the Labour Act, from wage payment dates to overtime, festival bonus and maternity pay.
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Definition
What Is Salary TDS in Bangladesh?
Salary TDS (tax deducted at source) is the income tax an employer in Bangladesh must deduct from each employee’s salary and deposit with the government, under Section 86 of the Income Tax Act 2023, at the average rate of tax on the employee’s estimated yearly income from employment.
The employer, not the employee, is responsible for deducting, depositing and reporting this tax. If it is not deducted or deposited on time, the employer pays the tax, interest and penalties.
Statutory compliance also covers
- ✓Paying wages on time and at the right rates under the Labour Act
- ✓Overtime, festival bonus and maternity benefit
- ✓Provident fund deductions and records
Deadlines
Salary TDS Deposit and Return Deadlines
Deducting the tax is only half the job. These are the dates that decide whether you pay interest.
Deposit the tax deducted within two weeks after the end of the month, from July to May.
Tax deducted in the first 20 days of June is due within seven days. Later June deductions are due almost at once.
File the withholding return under Section 177 by 25 October, 25 January, 25 April and 25 July.
Send the yearly salary statement for each employee, with tax deducted, alongside the October return.
Deadlines as described in published guidance on the Income Tax Act 2023. Check each year's Finance Act for changes.
The rules we track
The Periodic Table of Payroll Compliance
Eight rules touch every payroll in Bangladesh. Four come from the tax law and four from the labour law.
Running a provident fund? See provident fund and gratuity administration. Paying foreign staff? See expat payroll and work permits.
What is at stake
What Happens if Salary TDS Is Wrong or Late?
One missed deposit can start a chain. The employer becomes liable for tax it did not deduct or deposit, interest runs every month, and the salary expense itself can be disallowed in the company’s tax assessment.
Our monthly checks are built to stop the first domino: every deduction is reconciled to the deposit challan before the deadline, and every quarter’s return is filed from the same records.
Our monthly control
- 1Recalculate each employee's average rate
- 2Match the total deducted to the challan
- 3Keep the evidence for the quarterly return
FAQs
Salary TDS and Compliance: FAQs
What is salary TDS in Bangladesh?
It is the income tax an employer deducts from each employee’s salary and deposits with the government under Section 86 of the Income Tax Act 2023, at the average rate of tax on the employee’s estimated yearly employment income.
How is tax on salary calculated in Bangladesh?
The employer estimates each employee’s income from employment for the income year, works out the tax on it, divides the tax by that income to get the average rate, and applies the rate to each month’s salary.
When must salary TDS be deposited?
For deductions from July to May, within two weeks after the end of the month. In June the deadlines are shorter: deductions in the first 20 days are due within seven days, and later ones almost immediately.
When is the withholding tax return due?
The return under Section 177 is filed quarterly, by 25 October, 25 January, 25 April and 25 July, covering the previous three months.
What happens if an employer deducts or deposits tax late?
The employer is liable for the tax, pays simple interest of 2% a month on the late amount for up to 24 months, may have the salary expense disallowed, and can face penalties and, for failure to deposit, prosecution.
Which employees must show proof of their tax return?
Published guidance says employees in management or administrative roles, and supervisors in production, must give the employer proof that they filed their tax return.
What statutory payroll rules apply besides tax?
Under the Labour Act, wages must be paid before the seventh working day after the wage period, overtime is paid at twice the ordinary rate, and workers get festival bonuses and paid maternity leave. A provident fund also applies to larger employers.
Can you handle TDS for foreign employees?
Yes. Tax depends on whether the employee is resident or non-resident for the income year, and we apply the right treatment alongside their work permit and payroll records.
Never Miss a TDS Deadline Again
Send us your last three payrolls and challans. We will check the deductions, deposits and returns, show you any gaps, and quote a fixed monthly fee to run it for you.