Labour Environment

Employment of workers are governed by the Bangladesh Labour Law 2006 and Bangladesh
Labour Rules 2015.
Employment of staff engaged in a managerial, administrative or supervisory capacity is
governed by contract.

Labour Law

Bangladesh Labour Law 2006 (Amended 2013) and Bangladesh Labour Rules 2015 are the prevailing labour relation regulations currently. However, the Labour Law 2006 is mainly used to govern the relationship between employers and workers. Workers are defined in the law as:

“Worker” means any person including an apprentice employed in any establishment or industry, either directly or through a contractor, by whatever name he is called, to do any skilled, unskilled, manual, technical, trade promotional or clerical work for hire or reward, whether the terms of employment are expressed or implied, but does not include a person employed mainly in a managerial, administrative or supervisory capacity.

Considering this, there is ambiguity on whether management staff and employees in the service sector fall under this Act or that relationship can be simply governed through employment contracts. This area is being reviewed by the Bangladesh Courts and a new law is expected soon.

Personal Income Tax

ResidencyIn Bangladesh an individual is treated as a resident if they have been in Bangladesh for:

An aggregate period of 182 days or more in that tax year, or
90 days or more in that tax year provided he/she has previously been in Bangladesh for
an aggregate period of 365 days or more during the 4 years preceding that tax year.
Any company which is managed or controlled wholly in Bangladesh during that tax year.
Any trusts, funds or entity controlled or managed from Bangladesh.

Short term visitors and dependents of expatriates not earning any income in Bangladesh are
not taxable locally and do not have to file a tax return. Nationality has no impact on taxability.

Taxpayer’s Identification Number (e-TIN)

All individual taxpayers are required to obtain an e-TIN in order to file a tax return. This is
relatively easy and can be obtained from http://secure.incometax.gov.bd/TINHome.

Deadline for Tax Return Filing

The last date for filing tax returns is 30 November following the end of the income year which
is now termed Tax Day.

Employers are responsible for deducting taxes at source after providing for allowances from
monthly salary. However, all employees are responsible for filing of their own returns at the
end of the tax year. If, however, an individual has other sources of income such as house rent,
interest income etc., he/she is responsible for filing accordingly and paying taxes at the time
of filing. Income from salary includes the following:

Basic Salary
Festival Bonus
Incentive Bonus
Arrear Salary
Advance Salary

Wages or any other payment
Overtime
Contribution to PF
Pension Fund
Gratuity Fund

Superannuation Fund
Project Pay
Leave Encashment
Compensation Pay
Leave Fare Assistance

Individuals enjoying salary income are subject to tax on salary and all other benefits. A
summary of taxability and allowances are as below:

Income Head	Taxability
Basic Salary	Fully taxed
House Rent Allowance (in cash/with salary)	Tk. 25,000 per month or 50% of basic salary, whichever is lower is exempt from tax.
Rent free accommodation	Actual rent paid by employer or 25% of basic salary, whichever is lower shall be added to total income and taxed.
Conveyance Allowance (in cash/with salary)	Tk. 30,000 per annum is exempt from tax where no conveyance facility is provided by employer.
Conveyance provided for personal/private use	If employer provides conveyance for personal or private use, 5% of the employee’s basic salary or Tk. 60,000 whichever is higher, is added to total income and taxed.
Medical Expenses	Tk. 120,000 per annum or 10% of basic salary, whichever is lower is exempt from tax.
	Medical expenses up to Tk. 1,000,000 paid to a disabled employee shall not be included in his total income.
	Medical expenses paid to an employee (other than a shareholder director) for a surgery relating to heart, kidney, eye, liver and cancer of the employee, shall not be included in the total income of such employee.
Travel (local & foreign)	Amounts paid at actual against bills/receipts are tax free. Any benefit paid in addition in cash is taxable.
Festival Bonus	Fully taxable
Performance Bonus	Fully taxable
Utility expenses	Fully taxable
Telephone/Mobile allowance	Tax free as long as it is for official use.
Entertainment allowance	Fully taxable
Other allowances	Fully taxable
Any reimbursements	Tax free as long as it was incurred for official purposes.

Employers usually deduct taxes at source after providing for allowances from monthly salary. However, all employees are responsible for filing of their own returns at the end of the tax year. If, however, an individual has other sources of income such as house rent, interest income etc., he/she is responsible for filing accordingly and paying taxes at the time of filing.

Rates of Personal Tax

Income tax is charged to individuals on fixed slabs. The slabs of total income and
corresponding tax rates are given below:

Amount of Taxable Income	Rate
First Tk. 300,000	Nil
First Tk. 350,000 (in case of female, senior taxpayers over the age of 65 and people of third gender)	Nil
First Tk. 450,000 (in case of disabled taxpayers)	Nil
First Tk. 475,000 (in case of Gazetted War-Founded Freedom Fighter Taxpayer)	Nil
Tk. 50,000 above their applicable total income floor (in case of any one parent/legal guardian of Disabled Individuals)	Nil
On the next Tk. 100,000	5%
On the next Tk. 300,000	10%
On the next Tk. 400,000	15%
On the next Tk. 500,000	20%
On the balance	25%
The tax rate for non-residents	Flat 30%

Employment of Foreigners & Work Permit

Work permit is mandatory for every foreign national seeking employment in Bangladesh. Three
government authorities issue work permit in Bangladesh.

For private sector industrial enterprise, branch office and liaison office, outside of Export Processing Zone (EPZ) – Bangladesh Investment Development Authority (BIDA).
For employment of foreign national in the EPZ – Bangladesh Export Processing Zones Authority (BEPZA).
For employment of foreign national in any NGO – NGO Affairs Bureau.
Private sector industrial enterprises, branch office, liaison/representative office desiring to employ foreign nationals are required to apply to BIDA in their prescribed from. While issuing work permit, BIDA usually follows the following guidelines:
- Only nationals of countries recognized by Bangladesh are considered for employment.
- Employment of expatriate personnel is considered only in industrial/commercial establishments which are sanctioned/registered by the appropriate authority.
- Employment of foreign nationals is normally considered for the job for which local experts/technicians are not available.
- Persons below 18 years of age are not eligible for employment.
- The number of foreign employees should not exceed 5% in the industrial sector and 20% in commercial sector of the total employees, including top management personnel.
- Initially, employment of any foreign national is considered for a term of one year, which may be extended on the basis of merit of the case.
- Security clearance will be required from Ministry of Home Affairs.

Working Hours & Holidays

There are 14 public and religious holiday days in Bangladesh.
Bangladesh has a five-day working week. Weekdays are Sunday to Thursday. Friday and
Saturday are weekends.
Standard working hours are 40 hours a week. Government offices run from 9:00 a.m. to 5:00
p.m. and private sector businesses operate from 10:00 a.m. to 6:00 p.m. Banks and financial
institutions also work from 10:00 a.m. to 6:00 p.m.

Labour Environment