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, from payroll processing to compliant administration.
Partner with Atlas HXM for a cost-effective, compliant solution to hire and manage your workforce in Bangladesh.
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.
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. 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 outlines employment terms to reduce 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.
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.
What to Choose: EOR vs PEO
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 is 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.
What to Choose: Indirect vs Direct EOR
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
|
Employee Payroll Tax | Residents: progressive income tax 0%–25%
|
Pension System | Government old-age allowance: BDT 600 monthly for eligible seniors
|
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
Deep knowledge of Bangladesh’s labor and employment framework, including the Bangladesh Labour Act 2006, wage board orders, industry-specific regulations, severance rules, and compliance requirements set by NBR, BIDA, and BEPZA.
Technology that supports Bangladesh-compliant payroll, including accurate income tax (AIT/PAYE) calculations, festival bonus administration, statutory filings, provident fund/gratuity setup, and integrated HR reporting aligned with local regulations.
A strong compliance track record within Bangladesh, supported by established relationships with local legal advisors, tax authorities, labor inspectors, and government institutions to ensure error-free payroll and statutory compliance.
A global presence with verified security standards (ISO 27001/27017/27018, GDPR), ensuring stable multi-country expansion while maintaining strict compliance with Bangladesh’s legal and data-protection requirements.
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 2026, Atlas HXM combines compliance, technology, and global expertise.
FAQs
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.