Employer Tax Contributions

Tax Type	Rate	Base
Pay As You Earn (PAYE) / Tax Deducted at Source (TDS) on Salaries	Progressive (0% - 25%)	Employee's Taxable Income
Provident Fund (PF)	7% - 8% (Matching contribution)	Employee's Basic Salary
Workers' Profit Participation Fund (WPPF)	5%	Company's Net Profit before Tax (if criteria met)

Filing & Compliance

• Employers must have an e-TIN number and ensure all employees have one.
• Deducted PAYE/TDS must be remitted to the National Board of Revenue (NBR) within 7 days of the end of the month.
• Workers' Profit Participation Fund contributions are due within nine months of the close of every accounting year.

In Bangladesh, employers are responsible for deducting income tax from employee salaries and remitting it to the National Board of Revenue (NBR).

Employee Tax Deductions

A portion of income from employment, up to BDT 450,000 or one-third of the total employment income, whichever is less, is tax-exempt. Income from employee share schemes (the fair market value at the time of receipt less the acquisition cost) is taxable in the year it's received. Gifts from a spouse, parent, or child are tax-exempt if declared on both the donor's and recipient's tax returns; other gifts are taxable.

Tax Rates and Slabs (as of January 1, 2025)

• Up to BDT 350,000: 0%
• BDT 350,001 – 450,000: 5%
• BDT 450,001 – 750,000: 10%
• BDT 750,001 – 1,150,000: 15%
• BDT 1,150,001 – 1,650,000: 20%
• BDT 1,650,001 and above: 25%

Tax-Free Limits for Specific Categories

• Female taxpayers: BDT 400,000
• Senior male taxpayers (65 years and above): BDT 400,000
• Individuals with disabilities: BDT 475,000
• Gazetted freedom fighters: BDT 500,000

Tax Deduction at Source (TDS)

Employers are responsible for deducting tax at source from employee salaries according to the applicable tax slabs. This requires calculating the estimated annual taxable income, determining the applicable average tax rate, and deducting the tax amount each pay period. The withheld tax must be deposited to the NBR by the employer. Specific rates and limitations exist for other TDS categories, such as payments to contractors, fees for professionals, royalties, and others.

Investment Allowance

An investment allowance is available, providing a tax rebate equal to 15% of the investment amount, capped at BDT 1,000,000. Qualifying investments include life insurance premiums (up to 10% of face value), provident fund contributions, certain approved debentures or shares, and donations to specific organizations.

Allowances and Benefits

Medical expenses are generally taxable. An exception applies to medical expenses paid by an employer (excluding shareholder-directors) for heart, kidney, eye, liver or cancer surgery, which are exempt. Various allowances and benefits may be provided by employers and are subject to taxation based on their nature and specific regulations.

Filing and Deadlines

Employers must deduct TDS and deposit it with the NBR. Annual income tax returns for individuals are also required, with deadlines and procedures outlined by the NBR. Further, companies may also have a corporate tax rate of 22.5% for publicly traded companies. Those dealing with coal-based power generation or other energy sectors have varying and progressively decreasing exemptions.

Information is current as of February 5, 2025, and may be subject to change based on updates to tax laws and regulations by the NBR.