Employer of Record (EOR) in Bangladesh

An EOR in Bangladesh allows businesses to enter the market quickly and help maintain compliance with local laws, all while reducing the overhead costs of establishing a local entity. Atlas HXM offers a seamless EOR service that handles all aspects of employment for workers, including work permit assistance, from payroll processing to compliant administration.

Partner with Atlas HXM for a cost-effective, compliant solution to hire and manage your workforce in Bangladesh.

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Country InsightsBangladeshEmployer of Record

Quick Overview of EOR in Bangladesh

Expanding into Bangladesh doesn't have to mean drowning in paperwork or hefty setup costs. With an Employer of Record (EOR), you can bypass the complexities of local regulations and quickly hire employees, all while maintaining compliance with Bangladesh's labor laws. From payroll processing and tax compliance to benefits management, an EOR takes care of the legal nitty-gritty like income tax withholdings and statutory benefits, so you can focus on growing your business without the need to set up a costly local entity.

The EOR model offers a low-risk, cost-effective alternative to setting up a subsidiary. Establishing a local entity in Bangladesh can cost anywhere from USD 2,000 to USD 5,000 (BDT 220,000 to BDT 550,000) plus the cost of maintaining human resources (HR), legal assistance, accountants and more. It can also become highly administrative. By partnering with an EOR, you can avoid these setup costs and enter the market faster, avoiding the overhead of a physical office. This is especially beneficial for startups, SMEs, and businesses testing new markets, who need to act quickly and comply with complex local regulations.

Disclaimer: The contents of this article is not legal advice and should be used for reference only. If in doubt, please seek independent legal advice from a lawyer in the relevant jurisdiction.

What You'll Learn

  • Looking to hire in Bangladesh without the hassle and administrative burden of setting up a local entity? An EOR helps you onboard employees while maintaining compliance with payroll and local labor laws.

  • With a Direct EOR, you gain control, faster onboarding, and stronger compliance. It is ideal for businesses aiming to scale quickly.

  • On the other hand, an Indirect EOR may be more cost-effective but comes with slower processes and added complexity.

  • EOR service fees typically range from USD 200 to USD 500 (BDT 22,000 to BDT 55,000) per employee per month.

  • Atlas HXM offers a robust Direct EOR solution, providing smooth market entry, compliance, and seamless employee management: all in one platform.

How an EOR Works

At Atlas HXM, we provide EOR services that ensure your business remains compliant with Bangladesh's labor laws while you focus on growing your operations, free from administrative and legal burdens.

Candidate Selection

Atlas HXM does not recruit candidates, but will check the employment setup for compliance around new hires like validating right-to-work, reviewing contract terms against Bangladesh rules, and configuring payroll and statutory obligations correctly. EOR providers in Bangladesh, including Atlas HXM, can assist with work permit applications for foreign nationals. Anyone hired via EOR must either already hold valid work authorization or go through the proper work permit application process.

Employment Contracts

Atlas HXM drafts and administers employment contracts in compliance with the Bangladesh Labor Act. We clearly outline employment terms to reduce the risk of future disputes, such as:

  • Probationary period

  • Salary, benefits, and working hours

  • Leave entitlements and notice periods

Payroll & Benefits Management

Payroll is processed in Bangladeshi Taka (BDT), including:

  • Accurate tax withholdings and statutory contributions

  • Mandatory benefits such as festival bonuses

The EOR also helps maintain compliance with mandatory benefits, so employees are protected under Bangladesh's laws.

Work Permit Compliance

In Bangladesh, EOR providers can assist with work permit applications for foreign nationals. Atlas HXM manages compliant employment, payroll, tax obligations, and statutory requirements in alignment with local regulations.

Ongoing HR Support

Provides HR support, including: Leave management and attendance tracking and employee relations and regulatory updates throughout the employee's tenure. This allows businesses to focus on core operations, while Atlas HXM handles ongoing compliance.

Costs & Pricing

EOR services in Bangladesh are typically billed as a platform/service fee in the range of USD 200–500 (EUR 180–450 / BDT 22,000–55,000) per employee per month. This fee covers administration such as compliant contracts, payroll processing, statutory filings, and HR administration for workers who already hold valid work authorization. This service fee is separate from the employee's salary, benefits, taxes, and permit-related costs, which vary by role and jurisdiction. By using an EOR, companies avoid the cost and overhead of setting up a Bangladesh entity, which can require USD 2,000–5,000 (BDT 220,000–550,000) upfront before any operational spend.

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What to Choose: EOR vs PEO

EOR

Employer of Record

An EOR becomes the legal employer for your hires in a country where you do not have an entity. The EOR carries employer liability and handles compliant contracts, payroll, statutory benefits, tax filings, and labour-law adherence. You still direct the employee's work. This model suits companies expanding into Bangladesh without wanting to form a local entity or take on compliance risk.

PEO

Professional Employer Organization

A PEO provides outsourced HR services like payroll, benefits, HR admin, but only when you already have a local entity. You remain the legal employer, and the PEO shares administrative tasks without taking on employer liability. Suitable when you are already established in the country and are only looking to offload HR administration.

What’s Best for You?

  • Choose an EOR when you want to hire in Bangladesh without setting up an entity and want a partner who absorbs employer risk.

  • Choose a PEO when you already operate locally and just want HR support.

Work Life in Bangladesh

Bangladesh's employment framework is designed to balance operational needs with employee protections. Here's what you need to know:

Employment Types:

  • Permanent: Ongoing employment with full statutory benefits and enhanced job security.

  • Fixed-Term: Hired for a specific project or defined duration, entitled to the same statutory benefits as permanent employees

  • Temporary: Short-term assignments that are expected to be completed within a limited timeframe; entitled to statutory benefits like leave and overtime.

Probation Periods: Maximum probationary periods are 6 months for clerical employees and 3 months for others, with possible 3-month extensions. These periods allow employers to assess employee suitability before offering permanent employment. Notice periods during probation follow standard requirements, and the EOR ensures that all terms are compliant with the Labor Act.

Working Hours & Overtime: In Bangladesh, the standard workweek is 48 hours, with a maximum of 8 hours per day (occasionally up to 10 hours). Employees must receive appropriate rest intervals based on daily working hours. For eligible employees covered by the Labor Act, overtime is paid at twice the basic wage rate, and the EOR ensures that all overtime is calculated correctly and that employee work hours comply with local regulations.

Leave Entitlements

Leave Type

Eligibility / Duration

Payment / Notes

Annual Leave

1 day per 18 days worked (most industries)

Paid by employer; can carry forward and accumulate up to 60 days for shop, commercial, or industrial workers

Maternity Leave

16 weeks (8 before, 8 after birth)

Paid by employer; requires 6 months service

Sick Leave

14 days annually

Paid; requires medical certificate

Public Holidays

11 festival holidays

Paid; handled by Atlas HXM

Casual Leave

10 days annually

Paid; cannot be carried forward

Payroll & Benefits: Wages are calculated based on minimum wage requirements and industry standards. Atlas HXM manages payroll in BDT, income tax withholdings, statutory benefits, festival bonuses. Supplemental benefits can include health insurance, transportation allowances, and professional development options.

Atlas HXM can help you manage these aspects and can help ensure that employees are supported and compliant with Bangladesh's labor laws while businesses can focus on operations without administrative burdens.

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What to Choose: Indirect vs Direct EOR

Direct EOR

The EOR owns the legal entities in the target country, coordinating all employment-related tasks directly. It offers faster onboarding, better compliance, and more control.

Best for: Businesses looking to scale quickly, expand long-term, or enter Bangladesh with compliance.

Indirect EOR

The EOR provider acts as an intermediary between the business and a third-party local entity. While it can be cheaper, it may result in delays and compliance complexity.

Best for: Small teams or short-term hires with less urgent compliance needs.

What’s Best for You?

  • For Small Teams or Contractors: Indirect EOR could work, especially for temporary hires or testing a market.

  • For Scaling and Compliance: Direct EOR is the best choice. With Atlas HXM, you'll have control, faster entry, and streamlined compliance.

Taxes & Compliance

Bangladesh operates on a tax year running from July 1 to June 30. Employers must withhold income tax monthly and remit by the 15th of the following month, submit annual salary statements and tax certificates, and file various returns within specified deadlines. Individual tax returns must be filed by November 30 for the preceding tax year.

Category

Details

Employer Payroll Tax

Income tax withholding responsibility

  • Social Security: 15% of monthly salary for temporary workers via agencies

  • Group insurance: mandatory for organizations with 25+ permanent employees

Employee Payroll Tax

Residents: progressive income tax 0%–25%

  • Non-residents: flat 30% on Bangladesh-source income

  • Tax-free threshold: first BDT 300,000 annually

Pension System

Government old-age allowance: BDT 600 monthly for eligible seniors

  • Universal Pension Scheme: voluntary with four plans (Pragati, Surokkha, Samata, Probas)

  • Minimum 10 years contributions required for benefits

VAT & EOR Costs: Bangladesh applies VAT on services at the standard rate. EOR services may be subject to VAT, either included in quoted fees or added separately. Businesses may claim VAT credits if registered and meeting turnover requirements.

Atlas HXM handles tax compliance, including progressive income tax calculations, statutory contributions, year-end filings, and expatriate tax management, ensuring businesses remain compliant with local laws while minimizing administrative burden.

Termination

Employees must give written notice for termination, with statutory notice periods of 120 days for permanent employees and 60 days for other employees. Employee resignation requires 30 days notice (permanent) or 15 days (temporary). Severance pay is required for employees with 1+ years of service: 30 days' wages per year of service (limited to 25 years), plus 45 days' wages for each year above 10 years. The EOR helps ensure proper handling of terminations, including notice periods, final wages, and required documentation.

5 Things to Look for in an EOR Provider in Bangladesh

  1. Local expertise and knowledge of labor laws, tax regulations, and regulatory requirements.

  2. Advanced technology for payroll, reporting, and HR system integration.

  3. Experience in your industry and handling work permit management.

  4. Strong compliance track record and relationships with government agencies and legal advisors.

  5. Global presence to support multi-country expansion, with verified security and compliance standards (ISO 27001/27017/27018, GDPR).

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Atlas HXM provides direct EOR services, managing payroll, compliance and benefits efficiently. Our unified platform automates HR, payroll, and compliance tasks, while offering premium employee support, global benefits, and access to 9,000+ learning courses. Recognized by Everest Group PEAK Matrix 2025 and NelsonHall NEAT Assessment 2025, Atlas HXM combines compliance, technology, and global expertise.

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FAQs

Can an EOR in Bangladesh assist with work permit applications?

Yes. Atlas HXM can assist with work permit applications for foreign nationals and manage compliant employment once authorization is obtained.

What is the minimum wage in Bangladesh?

Minimum wages range from BDT 521 to BDT 16,240 per month depending on industry, with garment workers earning BDT 12,500 minimum.

What is the typical probation period?

Maximum 6 months for clerical employees, 3 months for others, with possible 3-month extensions.

How much notice is required for termination?

120 days for permanent employees, 60 days for others; employees give 30 days (permanent) or 15 days (temporary).

What are the working hour limits?

8 hours per day, 48 hours per week standard, with total hours including overtime not exceeding 60 hours weekly.

How is overtime calculated in Bangladesh?

Overtime is paid at twice the basic wage rate for hours worked beyond standard time.

         

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