Bangladesh labour law compliance guide for foreign employers

This page is informational and reflects Bangladesh law as we understand it on the review date. It is not a substitute for licensed legal or tax advice in Bangladesh or in your own jurisdiction. Statutory figures change; confirm current values with your adviser before relying on them.

Which laws govern employment in Bangladesh?

Employment in Bangladesh is governed primarily by the Bangladesh Labour Act 2006 (Act XLII of 2006), as amended in 2013, 2018 and 2025, together with the Bangladesh Labour Rules 2015. Income tax on salaries falls under the Income Tax Act 2023 administered by the National Board of Revenue, and foreign employment is regulated by BIDA under its work-permit guidelines.

The Act consolidated 25 earlier statutes and applies to "workers" in shops, commercial establishments and industrial undertakings. Its most important limitation for a foreign employer is the definition of worker in s.2(65): people employed mainly in a managerial, administrative or supervisory capacity are excluded, so a software architect or finance manager may fall outside the Act's leave and termination rules unless their contract adopts them. The full text is published by the Ministry of Law at bdlaws.minlaw.gov.bd.

What must an employment contract contain, and how long is probation?

Every employer must issue a written appointment letter and an identity card with photograph at the time of engagement (s.5). Probation is six months for clerical roles and three months for other workers, extendable by a further three months where performance cannot yet be judged (s.4(8)); a worker completing probation becomes permanent automatically.

What are the working-hours and overtime limits in Bangladesh?

The standard limit is 8 hours a day and 48 hours a week, extendable with overtime to 10 a day and 60 a week, averaging no more than 56 a week over a year (ss.100–102). Overtime is paid at twice the basic wage and dearness allowance (s.108). Every worker gets one weekly rest day (s.103).

How much leave are workers entitled to in Bangladesh?

Workers are entitled each year to 10 days' casual leave (s.115), 14 days' sick leave on full pay (s.116), earned annual leave of one day per 18 days worked in shops and offices and one per 14 in factories since 2025 (s.117), and 13 days' paid festival holidays (s.118). Maternity benefit is 120 days' paid leave (s.46).

What must employers pay in wages, bonuses and Provident Fund?

Wages are due within seven working days of the end of the wage period (s.123). Two festival bonuses a year, each up to one month's basic wage, are due after a year's service (Labour Rules 2015, r.111(5)). Where a Provident Fund exists, workers contribute 7–8% of basic wages and the employer matches it (s.264); mandatory from 2025 at 100+ workers.

How is gratuity calculated in Bangladesh?

Gratuity is defined in s.2(10) as wages of at least 30 days for every completed year of service, or any part of a year exceeding six months, rising to 45 days' wages per year where service exceeds ten years. It is paid on termination, retrenchment, discharge, retirement or resignation as the Act provides, in addition to any compensation due.

How do termination, resignation and dismissal work?

An employer may terminate a permanent worker without cause on 120 days' written notice (60 days for other workers) or pay in lieu, plus compensation of 30 days' wages per completed year of service (s.26). Dismissal for misconduct requires a charge, hearing and enquiry under ss.23–24. A monthly-rated worker who resigns must give 60 days' notice (s.27).

How is income tax withheld from salaries in Bangladesh?

Employers must deduct income tax from salary at source under the Income Tax Act 2023 and deposit it monthly with the NBR. For assessment year 2026-27 the first BDT 375,000 of income is exempt (BDT 425,000 for women and those aged 65+), with rates of 10% to 30% above that and a minimum tax of BDT 5,000.

What do foreign nationals need to work in Bangladesh?

Foreign nationals require an E-visa issued on a BIDA recommendation, then a BIDA work permit and an online security clearance obtained through the One Stop Service portal after arrival; clearance is deemed granted if no objection is raised within 21 working days. Commercial offices may employ one foreigner per five local staff, industrial projects one per twenty.

The full process, document list and Nexus fees are on the expatriate work-permit page.

What did the 2025 amendment change?

The Labour (Amendment) Ordinance 2025, promulgated on 17 November 2025 and enacted by Parliament in April 2026, is the largest revision since 2013. It made Provident Fund mandatory at 100+ permanent workers, raised maternity leave to 120 days and festival holidays to 13, set factory earned leave at one day per 14 worked and cut the union threshold to 20.

• Definition of worker extended to gig and platform workers, domestic workers, seafarers and non-profit employees.
• Provident Fund mandatory at 100+ permanent workers, or enrolment in the national Progoti universal pension scheme.
• Maternity 120 days (60 + 60); festival holidays 13; factory earned leave 1 per 14 days.
• Trade unions may be formed by 20 workers (scaled by establishment size up to 400 for 3,000+); up to five unions per establishment.
• Employment Injury Scheme fund and an Alternative Dispute Resolution authority created; complaint committees required under s.332A.
• Layoff and resignation compensation improved for newer employees; blacklisting and forced labour expressly prohibited.

Source reporting: The Business Standard (10 April 2026), WTW Insights (March 2026), Bangladesh Law Digest (March 2026). Confirm the consolidated gazette text with counsel before relying on any single figure.