Guide to employment, payroll and benefits in


Rivermate offers complete payroll, benefits and compliance services for


01. Overview

Last updated: 

August 19, 2021

Bhutanese Ngultrum
Ease of doing business
GDP growth

02. Grow your team in


with Rivermate

Payroll, benefits, taxes, and compliance can be difficult to manage in


, particularly if you don't have established local relationships. You can hire employees in


effectively, conveniently, and in full compliance with all relevant labor laws using Rivermate's global employment solution. We handle the responsibilities and legal risks associated with foreign employment so you can concentrate on growing your company.

03. Summary

Bhutan is a landlocked nation in the Eastern Himalayas, officially recognized as the Kingdom of Bhutan. It is bordered on the north by China and on the south by India. Although Nepal and Bangladesh are close to Bhutan, they do not share a land boundary. The nation has a population of over 754,000 people and a land area of 38,394 square kilometers, ranking 133rd in the world. Bhutan is a secular monarchy that practices Vajrayana Buddhism. The country's green subtropical plains in the south rise from the subalpine Himalayan mountains in the north. There are peaks in Bhutan's Himalayas that are more than 7,000 meters above sea level. Bhutan's highest peak, Gangkhar Puensum, may also be the world's highest unclimbed mountain. Bhutan's biodiversity, which includes the Himalayan takin, is known for its diversity. Bhutan's capital, Thimphu, is the country's largest city. Bhutan and neighboring Tibet witnessed the spread of Buddhism, which began in the Indian subcontinent during Gautama Buddha's lifetime. From the southern Pala Empire of Bengal, the Vajrayana school of Buddhism spread to Bhutan in the first millennium. During the collapse of Buddhism in India, Tibet, Bhutan, Sikkim, and parts of Nepal became the last strongholds of the Mahayana schools. Bhutan was influenced by the Tibetan Empire as well. Ngawang Namgyal united Bhutan's valleys into a single state in the 16th century. Three Tibetan invasions were defeated by Namgyal, who also subjugated rival religious schools, codified the Tsa Yig legal system, and founded a theocratic and civil administration. Namgyal was the first Zhabdrung Rinpoche, and his successors, including the Dalai Lama in Tibet, served as spiritual leaders of Bhutan. Bhutan ruled over vast swaths of northeast India, Sikkim, and Nepal in the 17th century, and had a strong presence in Cooch Behar State. During the Bhutan War in the 19th century, Bhutan gave the Bengal Duars to British India. The House of Wangchuck ascended to the throne and sought stronger relations with the British in India. A treaty signed in 1910 promised British foreign policy advice in return for Bhutan's internal autonomy. In 1949, a new treaty with India was signed, in which both countries acknowledged the sovereignty of the other. Bhutan became a member of the United Nations in 1971. Bangladesh, Israel, Kuwait, Brazil, Japan, Thailand, and Turkey, as well as the European Union, have all extended their ties since then. Bhutan has its own military forces, despite being dependent on the Indian military. A representative government with an elected National Assembly and a National Council is established by the 2008 Constitution. Bhutan is a member of the South Asian Association for Regional Cooperation since its inception. Bhutan was ranked third in South Asia in the Human Development Index in 2020, behind Sri Lanka and the Maldives.

04. Public holidays

05. Types of leave

Paid time off

Public holidays

Sick days

Maternity leave

Paternity leave

Parental leave

Other leave

06. Employment termination

Termination process

Employers and workers alike have the right to cancel their contracts at any moment with sufficient notice. During this phase, both parties must submit at least 30 days' notice of contract termination or payment equal to income. Employers are permitted to fire employees without notice or compensation for specific circumstances. These justifications may include violating contract terms or creating other types of harm. The labor laws provide the following grounds for dismissal: theft, fraud, or misappropriation of property, willful disobedience, assault or another serious crime, sabotage, wilful absence, sexual harassment, causing damage, or violating the Tsa Wa Sum (disrespecting the King).

Notice period

Bhutan has no legislation regulations governing notice periods.

Severance pay

When an employer has worked for at least five years and their contract is terminated rather than dismissed, they may be entitled to severance pay based on their length of service.

Probation period

A contract of employment of one year or more may include a probationary period of up to 180 days, during which period either party may terminate the contract by giving the other party seven days notice. Employers are not permitted to require an employee to repeat a probationary period for the same or substantially similar work.

07. Working hours


The standard workweek in Bhutan consists of eight hours per day and forty-eight hours per week. Every week, employees are entitled to a 24-hour rest period, which employers should specify in the employment contract.


Employees have the option of working up to two overtime hours per day or 12 per week. Each employee is permitted to work only one overtime night shift per week. The overtime rate is determined by a company's internal service rules, but it must be at least equal to a person's standard pay rate.

08. Minimum wage


Employers may establish their own minimum wages through internal service rules, but they cannot be less than the federal minimum wage. The Ministry of Labor and Human Resources has the current minimum wage set at Nu. 125 a day.

Pay periods must be monthly or less frequent, and employers must maintain records of all paychecks.

09. Employee benefits


The government offers free public healthcare to all residents as part of the country's constitution. In the capital, there is just one private health care facility. Employers are not needed or obliged to provide health insurance.

The country's employment regulations do not cover any extra perks or incentives. Employers may add their own criteria in their businesses' internal service standards.

10. Why Rivermate as your Employer of Record / PEO?

Establishing an entity in


to hire a team takes time, money, and effort. The labor law in


has strong worker employment protection, requiring great attention to details and a thorough awareness of local best practices. Rivermate makes expanding into


simple and effortless. We can assist you with hiring your preferred talent, managing HR and payroll, and ensuring compliance with local legislation without the hassle of establishing a foreign branch office or subsidiary. Our PEO and Global Employer of Record solutions in


give you peace of mind so you can focus on running your business.

Please contact us if you'd like to learn more about how Rivermate can help you hire employees in


via our Employer of Record / PEO solution.

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