Salary TDS · Bangladesh payroll compliance
PayrollBangladesh runs tax deduction at source (TDS) on salary for companies that employ staff in Bangladesh. Every month we calculate each employee’s withholding, deposit it to the Government Treasury before the deadline, file the quarterly withholding tax return and issue year-end tax certificates, so your Bangladesh payroll stays compliant without an in-house tax team.
Monthly
Salary tax deducted at the average rate in every pay run
2 weeks
To deposit deducted tax after each month ends (July–May)
4 returns
Quarterly withholding returns a year, each due on the 25th
Tk 4 lakh
Tax-free income limit for individuals in FY 2026-27
What we do
What Our TDS Processing Service Covers
One team handles every TDS step for your Bangladesh payroll, from the monthly calculation to the year-end certificates.
01
Monthly Salary Tax Calculation
We estimate each employee’s taxable income for the income year from their salary structure, allowances, benefits and expected bonuses, then set the monthly deduction. When pay or investment proofs change, we recalculate so the year closes without over- or under-deduction.
02
Treasury Deposit Before the Deadline
Deducted tax is paid to the Government Treasury by challan within each month’s deadline, with the shorter June windows tracked separately. Every challan is recorded against its pay run, so an auditor can trace each payment from payslip to treasury.
03
Quarterly Withholding Tax Returns
We prepare and file the withholding tax return for every quarter. Deposit and return are separate obligations with separate deadlines; we track both, so a paid deposit is never mistaken for a filed return.
04
Employee Tax Certificates and Year-End Statements
Each employee receives a tax deduction certificate showing salary paid, tax deducted and the challan details. We prepare the yearly salary statement for the October return and the employee return details for the April return.
05
Employee Tax Declarations and Investment Proofs
We collect employees’ investment declarations at the start of the income year, check the supporting documents before they reduce the deduction, and follow up on missing proofs before year-end. Employees receive their tax calculation sheet by email.
06
Corrected Returns and Post-Filing Support
When figures change after filing, we prepare corrected returns and keep the working papers behind every deduction. We stay with each filing until the obligation is closed.
How it works
How Our TDS Processing Works
Five steps, repeated every month and every quarter, so nothing depends on someone remembering a deadline.
- Share your payroll dataSalary structures, allowances, benefits, employees’ TINs where they have one, and your company TIN and WIN.
- Annual tax estimateWe calculate each employee’s expected tax for the income year and set the monthly deduction.
- Monthly deductionThe deduction runs inside your payroll every month, with a TDS report for your finance team.
- Deposit and recordWe deposit the tax by challan before the deadline and file the challan against the pay run.
- Returns and certificatesWe file the quarterly return, issue employee certificates and support you after filing.
Deadlines
Bangladesh TDS Deadlines We Track for You
Every salary TDS date in the income year (1 July to 30 June), on one calendar we run for you.
Every month
Deposit window
Tax deducted from July to May is deposited within two weeks after the month ends. We deduct in each pay run and file the challan against it.
June
Shorter windows
Deductions made 1–20 June are due within 7 days, 21–29 June by the next day, and 30 June on the same day.
Every quarter
Withholding returns
Returns are due by 25 October, 25 January, 25 April and 25 July, each covering the previous three months.
Year-end
Statements and certificates
The yearly salary statement goes with the October return, employees’ return details with the April return, and each employee receives a tax deduction certificate.
What you receive
What You Receive Every Month and Quarter
Clear records your finance team and auditors can use, without chasing anyone for them.
- Monthly TDS reportTax deducted for every employee in the pay run, with the running total for the income year.
- Challan recordsEach treasury deposit matched to the pay run it came from.
- Employee tax sheetsA tax calculation sheet emailed to each employee, showing how the deduction was worked out.
- Quarterly return packThe filed withholding return with its proof of submission.
- Year-end certificatesA tax deduction certificate for every employee, ready for their own return.
- Audit-ready working papersThe calculations behind every deduction, kept in one place for the tax office.
Who it is for
Who Needs Outsourced TDS Processing
- Foreign companies with a Bangladesh entity Salary withholding applies to every entity type, including subsidiaries, branch offices and liaison offices with no local revenue.
- Employers without in-house tax staff The deduction, deposit and return cycle runs every month and every quarter, whether or not someone is free to do it.
- Growing local companies When headcount rises, monthly deposits and quarterly returns outgrow a small accounts team.
- Overseas finance teams Teams that need Bangladesh tax reports in English, from one point of contact.
Why us
Why Outsource TDS Processing to PayrollBangladesh
- One cycle, one set of numbers TDS runs inside the same payroll cycle, so the payslip deduction, the challan and the return always match.
- Every deadline tracked Monthly deposits, the June deposit windows and the four quarterly returns each have their own date in our calendar.
- Audit-ready records Challans and returns are filed against each pay run, ready if the tax office selects your return for audit.
- Built for foreign clients Reports and correspondence in English, with invoicing in USD or BDT.
TDS sits alongside the rest of your payroll obligations. For salary structuring and employee tax-saving advice, see our tax planning services in Bangladesh. To hand over the full monthly payroll run, see payroll outsourcing in Bangladesh.
Common errors
Common TDS Mistakes We Prevent
Five common salary TDS errors, and how our process prevents each one.
!
Deducting at one month’s slab rate
Salary TDS is deducted at the average rate on the year’s estimated income. Applying a slab to a single month over- or under-deducts.
!
Treating the deposit as the return
Paying the challan does not file the quarterly return. They are two obligations with two deadlines.
!
Missing the June windows
June deposits are due within days, not two weeks, so a normal month-end routine misses them.
!
Never re-estimating
Bonuses, raises and new investment proofs change the year’s tax. Without a re-estimate, the shortfall lands in the last months.
!
Skipping withholding on salary
Salary paid without proper withholding can be disallowed as a business expense, which raises the company’s own tax.
FAQ
TDS Processing in Bangladesh: Frequently Asked Questions
We calculate tax on each employee’s salary every month, deduct it in payroll, deposit it to the Government Treasury by challan, file the quarterly withholding tax return and issue tax deduction certificates to employees. We also file the yearly salary statement with the October return and support you after filing until each obligation is closed.
The employer estimates each employee’s taxable income from employment for the whole income year (1 July to 30 June), works out the tax, and deducts it at that average rate from each month’s salary. The estimate is revised whenever salary, bonuses or declared investments change.
For tax deducted from July to May, deposit is due within two weeks after the end of the month of deduction. June is tighter: within 7 days for deductions made 1–20 June, by the next day for 21–29 June, and on the same day for 30 June.
Quarterly. Returns are due by 25 October, 25 January, 25 April and 25 July, each covering the previous three months. The October return also carries the yearly statement of salary paid to each employee, and the April return carries details of employees’ own income tax returns.
Late or short deposits attract simple interest of 2% a month for up to 24 months. Not filing the quarterly return can bring a penalty of 10% of the last assessed tax or Tk 5,000, whichever is higher. Salary paid without proper withholding can also be disallowed as a business expense.
Tk 400,000 for general individual taxpayers, set by the Finance Act 2026 for FY 2026-27 and FY 2027-28. Some groups, such as women and senior citizens, have higher limits. Where income exceeds the limit, a minimum tax of Tk 5,000 applies.
If you hire through an employer of record, the EOR is the legal employer and is responsible for salary TDS. If you have your own subsidiary, branch or liaison office in Bangladesh, that entity must deduct and deposit TDS on salaries itself, and we can run the process for it.
Your company’s TIN and Withholding Identification Number (WIN), the employee list with employees’ TINs where they have one, salary structures, allowances and benefits, expected bonuses, and employees’ investment declarations. For a payroll already running, we also need this income year’s challan records and filed returns.
Yes. Festival bonuses are part of income from employment, so they belong in each employee’s estimated yearly income. When a bonus is confirmed or paid, we re-estimate the year’s tax and adjust the remaining monthly deductions, so the year does not close with a shortfall.
Yes, where their income exceeds the tax-free limit or they fall in a category the law names, such as employees in executive or managerial positions. Individual returns are due by 30 November after the income year ends, and the employer reports details of employees’ returns with the April withholding return.
Yes. We start from your challan records and filed returns for the months already processed, check them against payroll, correct any gaps we find, and then run the remaining monthly deposits, quarterly returns and year-end certificates.
| Rule | What it says | Legal basis |
|---|---|---|
| Governing law | Salary TDS is governed by the Income Tax Act 2023, which replaced the Income Tax Ordinance 1984 from 22 June 2023 | Income Tax Act 2023 |
| Salary deduction | Employers deduct at the average rate on each employee’s estimated yearly income from employment | Section 86 |
| Withholding registration | Every entity that deducts tax at source must hold a Withholding Identification Number (WIN) | Income Tax Act 2023 |
| Deposit, July–May | Within two weeks after the end of the month of deduction | Withholding Tax Rules 2024 |
| Deposit, June | 1–20 June: within 7 days; 21–29 June: next day; 30 June: same day | Withholding Tax Rules 2024 |
| Withholding return | Quarterly, by 25 October, 25 January, 25 April and 25 July | Section 177 |
| Yearly salary statement | Filed with the October quarter return | Section 177 return schedules |
| Employees’ return details | Filed with the April quarter return | Section 177 return schedules |
| Late or short deposit | Simple interest of 2% a month, up to 24 months; possible imprisonment of up to one year | Section 315 (prosecution) |
| Return not filed | Penalty of 10% of last assessed tax or Tk 5,000, whichever is higher | Section 266 |
| Non-compliant salary expense | Can be disallowed and taxed as special business income | Section 56 |
| Tax-free income limit | Tk 400,000 for general individual taxpayers in FY 2026-27 and FY 2027-28; higher for some groups | Finance Act 2026 |
| Rates above the limit | Progressive, from 10% to 30% | Finance Act 2026 |
| Minimum tax | Tk 5,000 where income exceeds the tax-free limit | Income Tax Act 2023 |
Rules as of October 2026. Thresholds and deadlines change with each Finance Act and NBR rule update.