How Income Tax Works in Bangladesh
The Finance Act 2026 (FY 2026-27) changed Bangladesh's salary tax: the tax-free threshold rose to Tk 400,000, the old 5% starter bracket was abolished, and component-wise exemptions were replaced by a single employment exemption of 1/3 of income (max Tk 500,000). There is no mandatory social security deduction for private employees.
The 2026-27 slabs (annual)
| Annual income (BDT) | Rate |
|---|---|
| First 400,000 | 0% |
| Next 300,000 | 10% |
| Next 400,000 | 15% |
| Next 500,000 | 20% |
| Next 20,000,000 | 25% |
| Balance | 30% |
Worked example
Annual salary of Tk 1,200,000: exemption = 1,200,000 ÷ 3 = Tk 400,000. Taxable = 800,000. Tax = 10% × 300,000 + 15% × 100,000 = Tk 45,000/year (≈Tk 3,750/month).
Thresholds & minimum tax
General: Tk 400,000 · Women/seniors 65+: Tk 450,000 · Persons with disability: Tk 525,000 · War-wounded freedom fighters: Tk 550,000. A Tk 5,000 minimum tax applies to anyone above the threshold.
Try it: Bangladesh salary calculator →
Sources: NBR (nbr.gov.bd), Finance Act 2026. Estimate only — not tax advice.