Payroll Processing in Bangladesh for Foreign Firms
PayrollBD is a Bangladesh payroll processing provider working for companies registered abroad. We calculate gross to net pay for your Bangladesh staff, deduct tax at source under the Income Tax Act 2023, issue payslips, and file the monthly return with the National Board of Revenue. Your legal employer status does not change.
Why choose PayrollBD?
Three things separate this engagement from a generic bookkeeping arrangement, and all three are boundaries rather than promises. Each names what we hold, what you hold, and where a file stops. If a fourth thing matters to you, it belongs in the scope note before work starts, not in a claim on this page.
- Named stage ownership — every cycle carries the six stage numbers set out below, and a query about stage four reaches the person who ran stage four, not a queue.
- Named record set — we maintain the salary register, the payslip file and the deduction working, and each is retrievable by cycle rather than by request date.
- Named jurisdictional boundary — we act on Bangladesh payroll duties only. Your home-country filings, board approvals and employment decisions stay outside our file and we say so in the scope note.
What is payroll processing?
Payroll processing is the monthly work of turning employment terms into paid salaries and the records that prove it. It covers gross to net calculation, statutory deductions, payslips, and the reporting your finance team and the tax authority both need.
For a company registered outside Bangladesh, it also means meeting Bangladeshi deduction and filing duties for staff who work here. The work repeats on a fixed monthly cycle, so the same inputs are collected, calculated, checked and recorded in the same order every time. What separates it from bookkeeping is that a payroll error reaches an employee’s bank account and a statutory return in the same month, which is why a cycle closes on your approval rather than on convenience.
What does each run cover?
Each cycle runs the same seven tasks, in the same order, so nothing is decided twice. The list below is the standing scope of a processing engagement. Anything outside it is scoped in writing before work starts, and we tell you which item it falls under.
- Salary calculation — gross to net for every person on the cycle, including variable pay.
- Tax at source — deduction computed under the Income Tax Act 2023 as part of the run.
- Payslips — itemised slips issued to each employee with the deductions shown line by line.
- Wage records — the underlying register kept so a later inspection has something to read.
- Leave and attendance — your inputs folded into the cycle before figures are fixed.
- Final settlement — the closing calculation for anyone whose employment ends in the cycle.
- Finance reporting — a per-cycle summary your finance team can post to its own ledger.
How does a payroll run work?
A run moves through six controlled stages. Each stage closes before the next opens, and you approve the figures before any money moves. The stages below carry the same numbers we use on your file, so a question about stage four is a question we can answer without unpicking the whole cycle.
What does every run produce?
Every cycle ends with the same four outputs: an approved salary register, itemised payslips, the deduction record behind them, and a finance summary. Those four are what an auditor, an employee and your own ledger each ask for, so the cycle closes only when all four exist for that month.
How is salary tax deducted?
Deduction at source is the employer’s duty in Bangladesh, not the employee’s. Section 86 of the Income Tax Act 2023 sets the rate at the average rate applicable to estimated total income, so the figure moves as an employee’s yearly total changes.
We compute it inside each run, keep the working, and hand your finance team the record behind every deduction (Income Tax Act, 2023). The return that follows goes to the National Board of Revenue, the tax authority constituted under President’s Order 76 (President’s Order 76, 1972).
Who needs payroll processing?
Processing suits a company that already employs people in Bangladesh and wants the monthly cycle run correctly by a team on the ground. If you have no legal entity here, the engagement changes shape, and the link at the end of this panel points to the route that fits.
- Foreign company, local staff — people employed in Bangladesh with no payroll or HR function here.
- Entering the market — an international business testing Bangladesh before committing to a full team.
- Finance-led handover — a finance leader moving payroll off spreadsheets and onto a controlled cycle.
- Multi-country group — a regional group needing the Bangladesh leg run to the same standard as the rest.
- No local entity yet — hiring before incorporation, handled through our Employer of Record service.
What does outsourcing change?
Handing the cycle over moves four things off your desk: the calculation, the deduction, the records and the filing. What stays with you is the decision on what each person is paid and the approval before money moves. The list sets the boundary in both directions.
- Calculation moves — gross to net is computed by us and checked before it reaches you.
- Deduction moves — tax at source is applied inside the run under the Income Tax Act 2023.
- Records move — the wage register and payslip file are maintained and kept retrievable.
- Filing moves — the monthly return of deducted tax is prepared and submitted to the National Board of Revenue.
- Approval stays — no figure is finalised until you sign off that cycle.
- Pay decisions stay — what each person earns remains yours to set and to change.
Which payroll deadlines are fixed by law?
Three deadlines govern a Bangladesh payroll cycle, and none of them is negotiable. The table sets each one against the section that fixes it. We work the cycle backwards from these dates rather than forwards from convenience, which is why the input cut-off sits where it does (Bangladesh Labour Act, 2006).
| Payroll duty | Time allowed | Governing section |
|---|---|---|
| Wages for a completed wage period | Within seven working days of the period ending | Bangladesh Labour Act 2006, s.123(1) |
| Final payment when employment ends | Within thirty working days of the ending date | Bangladesh Labour Act 2006, s.123(2) |
| Monthly return of tax deducted at source | By the fifteenth of the following month | Income Tax Act 2023, s.177(3) |
| Extension of that return date | Deputy Commissioner may extend where the fifteenth is a holiday | Income Tax Act 2023, s.177(4) |
Which payroll model fits you?
Three engagement models cover most situations, and the difference between them is who holds the employment contract. Processing assumes you already employ the people. The other two — managed payroll and Employer of Record — exist for companies that do not, or that want the whole function held elsewhere. The table names who holds what under each.
| What you need | Payroll processing | Managed payroll | Employer of Record |
|---|---|---|---|
| Employment contract sits with | Your own entity | Your own entity | PayrollBD |
| Local entity required | Yes | Yes | No |
| Who approves each cycle | You | You | You |
| Who files the tax return | PayrollBD | PayrollBD | PayrollBD |
Frequently Asked Questions
Four questions come up in almost every first conversation about Bangladesh payroll. The answers below are the same ones we give on a call, including the one where the honest answer is that it depends on a document we have not seen yet.
How long does a run take?
A run closes inside the cycle you agree with us, and the fixed point is the legal one, not ours. Section 123(1) of the Bangladesh Labour Act 2006 requires wages within seven working days of the wage period ending, so we set the input cut-off far enough ahead of that to leave room for your approval.
If inputs arrive late, the approval window narrows rather than the legal deadline moving.
Who deducts the salary tax?
The employer does, and that duty does not move to the employee. Section 86 of the Income Tax Act 2023 requires deduction at the average rate applicable to estimated total income, which means the figure is recalculated as an employee’s yearly position changes.
We apply it inside each run for local and foreign staff alike, then prepare the monthly return that goes to the National Board of Revenue by the fifteenth of the following month.
What decides the scope?
Headcount and the list of tasks you hand over decide it, and both are written down before work starts. Nothing about the arrangement is left to be inferred later from an invoice or an email thread. The scope note is the one document both sides work from, and it is set in three steps:
- You tell us how many people are on the cycle and where they sit.
- We map your requirement against the seven standing tasks listed above.
- Anything outside those seven is named separately in the scope note, so nothing is assumed.
Once that note is agreed, the scope only changes when you change it in writing.
What if we have no entity?
Then payroll processing is not the right fit, and the honest answer is that you need a different arrangement first. Processing assumes an entity that already holds the employment contracts. Without one, an Employer of Record holds the contract instead and runs the payroll under its own registration, which is a different engagement with different accountability.
We will tell you which of the two your situation needs before any scope note is written, because getting that wrong is slow to unwind.
Send us your Bangladesh payroll
Tell us how many people you pay in Bangladesh and where your company is registered. We reply with a scope note naming the seven tasks we would run, the deadlines that apply, and the approvals that stay with you. Nothing reaches an authority before you agree that note in writing.
Reviewed by Eicra Binte Islam — HR Admin, PayrollBD
Last updated 5 September 2026