Run Employee Benefits in Bangladesh Without a Local HR Team
PayrollBangladesh is a benefit administration provider in Dhaka that runs your employees’ statutory and voluntary benefits on your behalf. We enrol your staff, calculate provident fund and festival bonus on basic wage, administer group insurance and gratuity, deposit every contribution inside the statutory deadline, and settle end-of-service dues under the Bangladesh Labour Act 2006 as amended in 2026 — so every entitlement is paid correctly and every payment is on record.
Reviewed by Romana Akter Shila, CEO, PayrollBangladesh · 8 years in EOR and payroll operations · Last updated: 21 September 2026
What Is Benefit Administration in Bangladesh?
Benefit administration is the work of enrolling employees in their entitlements, calculating each one correctly, depositing fund contributions on time, and keeping the records that labour inspectors and auditors ask for.
In Bangladesh, almost every statutory benefit is calculated on basic wage, not gross pay. Provident fund, festival bonus, gratuity, overtime and most end-of-service payments all run off basic — so a salary structure that loads pay into allowances understates every one of those liabilities, and the shortfall compounds year on year.
You can run this in-house or outsource it. Outsourcing moves the calculations, deposits, trustee paperwork and employee queries to a specialist, while you keep control of policy and budget. If your team is already employed through our employer of record service, benefit administration is included.
Employee Benefits We Administer in Bangladesh
Whether you call it benefit administration, benefits outsourcing or employee welfare management, the calculation, deposit and record-keeping stay on our side for every benefit below.
- Provident fund administration — member enrolment, 7–8% contribution matching, nominee records, trustee board paperwork and annual audit support.
- Festival bonus — two bonuses a year, calculated on basic wage and pro-rated for part-year service.
- Group insurance — scheme set-up, enrolment, premium reconciliation and claim follow-up to settlement.
- Gratuity and end-of-service benefits — accrual, monthly provisioning and payout at exit.
- Workers’ Participation and Welfare Fund — the 5% net-profit allocation and trustee administration, where the law applies to you.
- Leave and maternity benefit — statutory balances and maternity pay, run with leave management.
- Tax on benefits — taxable perquisites valued and withheld through TDS processing under NBR rules.
- Voluntary benefits — health cover, transport, meal and mobile allowances, and any custom perk you choose to offer.
How Does Our Benefit Administration Process Work?
Our benefit administration runs in six steps — from a benefits audit through to year-end reconciliation — and keeps every entitlement calculated on the correct wage base and deposited inside the statutory deadline. Every engagement follows the same documented sequence, whether you have ten employees or five hundred. You set benefit policy and budget; we carry the calculation, the deposits and the records.
- Benefits audit — we review your salary structure, current benefits and worker classification against the Labour Act, and report the gaps.
- Plan design — statutory benefits mapped to your headcount, voluntary benefits priced, and the full package agreed with you.
- Enrolment — employees registered in provident fund, insurance and payroll, with nominee and dependant records completed.
- Monthly administration — contributions deducted, matched and deposited; bonuses and allowances paid through payroll.
- Employee support — balance statements, claim assistance and answers to benefit questions, so your managers are not fielding them.
- Year-end reconciliation — fund audit support, insurer invoice reconciliation and end-of-service provisioning.
Your benefits audit report names every gap we find, with the section of the Labour Act behind it.
What Employee Benefits Does Bangladesh Law Require?
Bangladesh law requires employers to pay two festival bonuses a year, provide statutory leave and maternity benefit, and pay service benefits on resignation or dismissal. Depending on your headcount, paid-up capital and fixed assets, it may also require a provident fund, group insurance and a Workers’ Participation Fund. The Bangladesh Labour (Amendment) Ordinance 2025 took effect on 17 November 2025 and was enacted by Parliament as the Bangladesh Labour (Amendment) Act 2026 in April 2026, changing several of these entitlements at once. We track every rule below so your payroll and your reserves stay current.
- Festival bonus — two bonuses each year for a worker with one year of continuous service; each bonus is capped at one month’s basic wage (Labour Rules 2015, rule 111(5)).
- Provident fund — a permanent employee who has completed one year of service contributes 7–8% of monthly basic wage and the employer contributes an equal amount (section 264(9)). Employers with 100 or more permanent workers must establish a fund, with the state Progoti universal pension scheme as an alternative on the employee’s written request.
- Group insurance — required for establishments with 100 or more permanent workers (section 99), with claims settled within 120 days.
- Workers’ Participation Fund — companies with paid-up capital of at least Tk 1 crore, or fixed assets of at least Tk 2 crore, pay 5% of net profit into the Participation Fund, Welfare Fund and Workers’ Welfare Foundation Fund at 80:10:10, within nine months of year-end (section 234).
- Maternity benefit — 120 days, split 60 days before and 60 days after delivery, raised from 112 days by the 2026 amendment (section 46).
- Leave and holidays — 10 days casual leave, 14 days sick leave, and earned leave of one day for every 18 days worked in offices (one day for every 14 in factories). Paid festival holidays rose from 11 to 13 days (section 118(1)).
- Resignation benefit — a permanent worker with at least three years’ service now receives 7 days’ wages per completed year; 15 days’ wages per year between three and ten years; and 30 days’ wages per year at ten years or more — or gratuity, whichever is higher (section 27(4)). Eligibility fell from five years to three.
- Dismissal compensation — newly introduced: a worker with at least one year of service who is dismissed is entitled to 15 days’ wages for each completed year.
One classification warning. The 2026 amendment redefined “worker” under section 2(65) by the actual duties performed rather than by job title. Staff you currently treat as outside the definition — titled “officer” or “executive” — may now be entitled to every benefit above. This is the most common and most expensive gap we find, and we check it in the benefits audit before anything else.
Statutory vs Voluntary Employee Benefits: What Is the Difference?
Statutory benefits are required by the Labour Act and cannot be reduced by contract. Voluntary benefits are the ones you choose to offer to attract and keep staff. We administer both — the difference is who sets the rules.
| Question | Statutory benefits | Voluntary benefits |
|---|---|---|
| Who sets the rules? | Labour Act 2006 and Labour Rules 2015 | Your company policy |
| Examples | Festival bonus, provident fund, maternity benefit, group insurance, WPPF | Health cover, transport, meal and mobile allowances |
| Can you reduce them? | No — a contract cannot go below the law | Yes, with notice under your own policy |
| Calculated on | Basic wage, in almost every case | Whatever your policy states |
| Risk if missed | Fines and imprisonment under the 2026 penalties, plus back-payment | Retention and employee-relations risk |
The 2026 amendment raised the general penalty under section 307 from Tk 5,000 to a range of Tk 25,000–Tk 50,000 with up to three months’ imprisonment, and non-payment of minimum wage under section 289(1) to Tk 50,000–Tk 100,000 or up to one year. Labour penalties in Bangladesh can no longer be absorbed as a predictable operating cost.
Why Foreign Companies Choose Us for Benefit Administration
PayrollBangladesh has operated in Dhaka since 2011 and supports over 50 international businesses in Bangladesh, across information technology and software, international NGOs and development agencies, and engineering and manufacturing. We are the legal employer for staff under our EOR and staffing engagements, which means we carry these same benefit obligations on our own payroll every month — not as an advisory exercise, but as the employer on record.
Related services: statutory compliance, compensation consulting, staff payroll services and accounting services.
How Much Does Benefit Administration Cost in Bangladesh?
The cost has two parts. The first is the benefits themselves — your matching provident fund contribution, two festival bonuses, insurance premiums, and the WPPF allocation where it applies. That part is driven by your basic-wage structure and your headcount, not by us. The second is our administration fee, which depends on how many benefits we run and for how many employees. We itemise both in every quote, so you can see which costs are statutory and which are ours.
Frequently Asked Questions About Benefit Administration in Bangladesh
It enrols employees in their entitlements, calculates each one on the correct wage base, deposits provident fund and other contributions within the statutory deadline, reconciles insurer invoices and claims, and keeps the records that labour inspectors and auditors ask for. PayrollBangladesh does this work while you keep control of benefit policy and budget.
The Bangladesh Labour (Amendment) Ordinance 2025, effective 17 November 2025, requires employers with 100 or more permanent workers to establish a provident fund, with the government’s Progoti universal pension scheme as an alternative. Under section 264(9), a permanent employee who has completed one year of service contributes 7 to 8 percent of monthly basic wage, and the employer contributes an equal amount. The Ordinance became the Bangladesh Labour (Amendment) Act 2026 in April 2026, and we confirm your exact obligation against the gazetted text during the benefits audit.
Under rule 111(5) of the Bangladesh Labour Rules 2015, a worker with one year of continuous service receives two festival bonuses a year, and each bonus may not exceed one month’s basic wage. Because the bonus is calculated on basic rather than gross pay, your salary structure determines the cost directly.
Under section 234, a company with paid-up capital of at least Tk 1 crore, or fixed assets of at least Tk 2 crore, on the last day of the accounting year must pay 5 percent of its net profit into the Participation Fund, the Welfare Fund and the Workers’ Welfare Foundation Fund in a ratio of 80:10:10, within nine months of the close of the year.
Section 99 of the Bangladesh Labour Act requires establishments with 100 or more permanent workers to introduce group insurance under the existing insurance laws. Employers below that threshold often provide it voluntarily to retain staff.
Under section 27(4) as amended, a permanent worker resigning with at least three years of continuous service receives 7 days’ wages for each completed year; with more than three and less than ten years, 15 days’ wages for each completed year; and with ten years or more, 30 days’ wages for each completed year, or the amount under the employer’s gratuity scheme, whichever is higher.
Your staff need a legal employer in Bangladesh first. PayrollBangladesh’s employer of record service employs them locally and includes benefit administration, so no local entity registration is required on your side.
It depends on whether the person is a worker under the Labour Act. The 2026 amendment to section 2(65) judges this by the actual duties performed rather than job title, so staff titled officer or executive may be covered. We review classification during the benefits audit.
Benefit Administration in Bangladesh
Ready to Take Benefits Off Your Team’s Plate?
Tell us your headcount and the benefits you run today. We come back with a gap check against the Labour Act as amended in 2026, a compliant benefit structure, and a clear quote that separates statutory cost from our fee.