How is income tax calculated in Bangladesh?
For FY 2026/27 Bangladesh taxes a resident's total income at nil up to the tax-free threshold of BDT 400,000, then 10% on the next BDT 300,000, 15% on the next 400,000, 20% on the next 500,000, 25% on the next 2 million and 30% on the rest.
Before tax, one-third of income from employment or BDT 500,000, whichever is lower, is exempt.
There is no general compulsory social security deduction: a provident fund (7% to 8% of salary) applies only where the employer has set one up. Non-residents who are not Bangladeshi citizens pay 30%.
What is the income tax rate in Bangladesh?
| Taxable income | Rate |
|---|---|
| BDT 0 – BDT 400,000 | 0% |
| BDT 400,000 – BDT 700,000 | 10% |
| BDT 700,000 – BDT 1,100,000 | 15% |
| BDT 1,100,000 – BDT 1,600,000 | 20% |
| BDT 1,600,000 – BDT 3,600,000 | 25% |
| Over BDT 3,600,000 | 30% |
What mandatory salary deductions apply?
- No compulsory employee contributions were found for a regular employee.
Gross salary and take-home salary
Gross salary is what your contract says before anything is taken off. Take-home salary is what reaches your bank account after income tax and the compulsory employee contributions. Employer contributions are paid on top of your salary and are not taken from it.
Example: BDT 370,000.00 a month
An employee earning 370,000 a month, about US$3,000.
| Item | Monthly | Annual |
|---|---|---|
| Gross salary | BDT 370,000.00 | BDT 4,440,000.00 |
| Income tax | BDT 66,000.00 | BDT 792,000.00 |
| Compulsory contributions | BDT 0.00 | BDT 0.00 |
| Take-home pay | BDT 304,000.00 | BDT 3,648,000.00 |
Effective income tax rate 17.8%; all deductions 17.8%.
Frequently asked questions
What is the tax-free threshold in Bangladesh?
BDT 400,000 for general taxpayers in FY 2026/27; BDT 450,000 for women and people aged 65 or older.
Is part of my salary tax-free?
Yes. One-third of employment income or BDT 500,000, whichever is lower, is exempt.
Is there a minimum tax?
Yes. If total income is above the tax-free limit, the minimum tax is BDT 5,000 (BDT 1,000 for new taxpayers).
Official sources
- PwC Worldwide Tax Summaries (reviewed 31 July 2026): Bangladesh - Individual - Taxes on personal income. Read 5 November 2026.
- PwC Worldwide Tax Summaries (reviewed 31 July 2026): Bangladesh - Individual - Deductions. Read 5 November 2026.
- PwC Worldwide Tax Summaries (reviewed 31 July 2026): Bangladesh - Individual - Other taxes. Read 5 November 2026.
Last reviewed 5 November 2026. An estimate for planning, not tax advice; your employer’s payroll and the tax authority decide what is actually withheld.
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