How much does it cost to hire someone in Bangladesh? Bangladesh is known for competitive salaries and a large, young, English-speaking workforce. But the monthly salary is not the whole story. Employers also pay festival bonuses, may need to fund a provident fund, and must budget for leave, overtime and end-of-service benefits. This guide breaks down the real cost of employing staff in Bangladesh in 2026.
- How salaries are structured in Bangladesh
- Minimum wage and typical pay levels
- Mandatory employer costs
- Income tax deducted from employee salaries (FY2026-27)
- Worked example
- Frequently asked questions
How salaries are structured in Bangladesh
Salaries in Bangladesh are usually stated as a gross monthly amount in Bangladeshi taka (BDT), split into components such as basic salary, house rent allowance, medical allowance and conveyance. This matters because several costs, such as festival bonuses and provident fund contributions, are calculated on basic salary, not gross. Basic salary is often 50–60% of gross.
Minimum wage and typical pay levels
Bangladesh has no single national minimum wage. Instead, the Minimum Wage Board sets rates by industry. In the ready-made garment sector, for example, the entry-level minimum wage was raised to BDT 12,500 per month in December 2023, with annual increments since then. Professional roles pay far more. Pay for software engineers, finance staff and managers depends heavily on experience, and international companies usually benchmark against multinational employers in Dhaka.
Mandatory and common employer costs
Festival bonuses
Employees with at least one year of continuous service are entitled to two festival bonuses per year, usually paid before Eid or the employee’s main religious festival. Under the Bangladesh Labour Rules, each bonus can be up to one month’s basic wage. Many employers pay a full month’s basic salary for each, so budget roughly two extra months of basic salary per year.
No general social security tax
Unlike many countries, Bangladesh does not charge employers a general payroll-based social security contribution. This is one reason total employment costs are relatively low.
Provident fund or pension
Under the labour law amendments introduced from November 2025, employers with 100 or more permanent workers must set up a provident fund. Employees contribute 7–8% of basic pay, and the employer matches it. Workers may instead choose the government’s universal pension scheme (Progoti), with matching employer contributions. Smaller employers often offer a provident fund voluntarily to attract talent.
Workers’ Profit Participation Fund (WPPF)
Larger companies that meet the capital or asset thresholds in the Labour Act must contribute 5% of net profit to WPPF and related welfare funds. This applies to the employing company, so if you hire through an Employer of Record you don’t set this up yourself.
Leave, overtime and end-of-service
- Paid leave: 10 days’ casual leave, 14 days’ sick leave, earned annual leave and 13 festival holidays per year
- Maternity leave: 120 days, paid by the employer
- Overtime: paid at twice the ordinary basic rate for workers covered by the Labour Act
- End-of-service benefits: compensation or gratuity on termination, retrenchment and, after three years’ service, resignation
Learn more in our Bangladesh labour law guide for employers.
Income tax on salaries (FY2026-27)
Employers must deduct income tax at source from monthly salaries. Under the Finance Act 2026, the individual tax-free threshold for FY2026-27 is BDT 400,000 per year (BDT 450,000 for women and taxpayers aged 65 and over). Above that, income is taxed at:
| Taxable income above the threshold | Rate |
|---|---|
| First BDT 300,000 | 10% |
| Next BDT 400,000 | 15% |
| Next BDT 500,000 | 20% |
| Next BDT 2,000,000 | 25% |
| Remaining income | 30% |
This tax is paid by the employee, but the employer is responsible for calculating, deducting and depositing it correctly.
Worked example: monthly cost of a BDT 100,000 salary
| Item | Monthly amount (BDT) |
|---|---|
| Gross salary (basic BDT 60,000) | 100,000 |
| Two festival bonuses (2 × basic, spread over 12 months) | 10,000 |
| Provident fund employer match (8% of basic, if offered or required) | 4,800 |
| Estimated monthly employer cost | ≈ 114,800 |
In this example, the employer pays around 10–15% on top of gross salary, before optional benefits such as group health insurance and before any provider fee. Actual costs depend on the salary structure, company size and benefits package.
Other costs to consider
- Group health or life insurance, which is very common among international employers
- Laptops, internet allowances or co-working space for remote staff
- Annual salary increments, often 5–10% given inflation
- Employer of Record or payroll outsourcing service fees
Frequently asked questions
Q: Is it cheap to hire in Bangladesh?
A: Salaries are competitive and there is no general social security tax, but you should budget for festival bonuses, benefits and compliant contracts.
Q: Can I pay my Bangladesh employee in US dollars?
A: Local employees are normally paid in BDT. Through an EOR you can be invoiced in USD and the provider pays salary locally.
Q: Do I need to open a company to hire in Bangladesh?
A: No. Read how to hire employees in Bangladesh without a company.
Get a cost estimate from NNRoad
NNRoad can prepare a detailed cost breakdown for any role in Bangladesh, covering salary structure, bonuses, benefits and fees, before you make an offer. Explore our Employer of Record service in Bangladesh or email [email protected].
This article is for general information only and does not constitute legal or tax advice. Figures are current as of 2026 and may change.