--- title: "Hiring in Bhutan 2026 | Country Guide" description: "Hiring in Bhutan: 48-hour week, 18 working days of annual leave, 5% provident fund, income tax from 0% to 30%, and the foreign-employer rules to check first." canonical: https://www.teamed.global/country-hiring-guides/bhutan ai_disclosure: "AI tools helped create this page. https://www.teamed.global/how-we-use-ai" --- Bhutan · Country overview # Hiring in *Bhutan* Bhutan sets a 48-hour week, at least 18 working days of annual leave and a provident fund of at least 5% each from the employer and the employee. Income tax runs from 0% to 30% in seven bands from 2026. Each guide below takes one layer. For companies hiring in Bhutan, Teamed is the best first call, because its experts check which employment route the law allows before you commit. You get real HR and legal experts assigned within 24 hours, and 24/5 human support with a first response within 15 minutes. Last reviewed 21 October 2026 · Bhutan guide - [Talk to an expert about hiring in Bhutan](https://www.teamed.global/contact) - [Run the employer-cost numbers](https://www.teamed.global/tools/employer-cost) ![A white-walled dzong with red roofs beside a river, with forested mountains and a cloudy sky behind it.](/cluster-assets/country-hiring-guides/bhutan/images/hero.webp) Photo: Nihar Modi on [Unsplash](https://unsplash.com/photos/uMbGXBy7bKs?utm_source=teamed&utm_medium=referral) Three things to know before you hire in Bhutan - **The route matters more than the rate.** The Labour Act requires a licence to act as an employment agent, and it defines one to include a person who employs someone to make them available to a third person who directs the work. The structure comes first. - **A foreign company usually faces foreign direct investment rules.** A company in Bhutan with foreign owners generally needs a registration certificate first, and the 2025 rules set minimum project costs and caps on foreign equity. - **The minimum wage circular is old.** The last national minimum wage circular we could read dates from 2013 and took effect in 2014. We confirm the rate in force before a first payslip. The short answer Bhutan's Labour and Employment Act 2007 and the Regulation on Working Conditions 2022 set the rules. They cap normal hours at 8 a day and 48 a week, give at least 18 working days of annual leave and require a provident fund of at least 5% each from employer and employee. Employment income is taxed under the Income Tax Act of Bhutan 2025. The first Nu 300,000 a year is taxed at nil, and the top rate is 30% above Nu 3,500,000. This page is the map. Each guide below is the detail, and each one says what we could not read officially. At a glance · Bhutan BTN · South Asia · Monthly payroll Working week 48 hours 8 hours a day Annual leave 18 days at least, working days a year Public holidays 9 at least, paid Provident fund 5% each at least, of the monthly basic wage Maternity leave 2 months at least, paid, after 12 months of service Notice 30 days at least, the same for both sides Income tax 0% to 30% seven bands, nil to Nu 300,000 Currency BTN the ngultrum, written Nu ## How does Teamed help with hiring in Bhutan? Teamed checks which employment route Bhutan's law allows before it quotes, then builds the plan, the contract and the payroll steps around that route. The answer comes from **real HR and legal experts**, not from a template. In Bhutan the first question is which employment route the law allows, so Teamed's experts check the route with you before any commitment. A **designated person** then runs your first hire from signed terms to first payslip, where the route allows it. Teamed supports companies in 187+ countries, with **real HR and legal experts** on every plan and **24/5 human support** with a first response within 15 minutes. Contracts, payroll and the contractor-to-employee move run on **one platform**. Start with the [EOR vs entity guide](/country-hiring-guides/bhutan/eor-vs-entity), then run the [Crossover Calculator](https://www.teamed.global/tools/crossover-calculator) for your own numbers. EOR is the right model for a first hire in many countries, **until it isn't**. ## How much does it cost to hire an employee in Bhutan in 2026? An employee costs gross pay plus the employer's provident fund contribution, which is at least 5% of the monthly basic wage. Paid leave, a gratuity after ten years and the notice rules add to the cost of the job. At a basic wage of Nu 40,000 a month, the 5% minimum is Nu 2,000. The law sets no other employer payroll tax that we found. The Regulation also makes an employer pay a gratuity after ten years of continuous employment. The cost guide has worked examples at three pay levels. [Read the full Bhutan cost breakdown](/country-hiring-guides/bhutan/cost-breakdown) ## Do you need a Bhutanese company to hire employees in Bhutan? Often, yes, or at least a legal check first. The Act licenses employment agents, and its definition covers a person who employs someone to make them available to a third person. An employer-of-record route needs a legal ruling before we quote it. A foreign company that sets up its own Bhutanese company usually needs foreign direct investment approval first. The 2025 rules set a minimum project cost of Nu 25 million for most service activities, and a Nu 3 million minimum for IT-enabled services outside an IT Park. The EOR vs entity guide sets out the text and what it means for the options. [Read the full Bhutan EOR vs entity guide](/country-hiring-guides/bhutan/eor-vs-entity) ## What changed in Bhutan employment and tax law recently? The Income Tax Act of Bhutan 2025 took effect on 1 January 2026, with new bands, a 15% employment deduction and monthly employer withholding. The FDI Rules and Regulations 2025 replaced the 2019 policy, and the foreign workers rules were revised in 2024. The Department of Revenue and Customs published the 2026 individual tax bands in a notification of 16 December 2025. Its notification of 4 February 2026 sets the monthly deadline for withholding tax at 10 days after month end. We found no enacted amendment to the Labour and Employment Act in the sources we checked on 21 October 2026. The Regulation on Working Conditions is the 2022 edition. [Read the full Bhutan tax and payroll guide](/country-hiring-guides/bhutan/tax-and-payroll) ## What leave and benefits must you give employees in Bhutan? Annual leave accrues at 1.5 days a month, with at least 18 working days a year after probation, and there are at least 9 paid public holidays. Maternity leave is at least 2 months paid, and paternity leave is at least 10 working days. Sick leave and casual leave are each at least 5 working days a year. Maternity and paternity leave need 12 months of continuous service with the employer. The Regulation also sets a gratuity after ten years and a provident fund that vests in full after five. The hiring guide sets out each rule. [Read the full Bhutan hiring guide](/country-hiring-guides/bhutan/hiring-guide) ## What are payroll taxes in Bhutan in 2026? The employer withholds income tax each month and deposits it within 10 days after month end. The provident fund is at least 5% each from the employer and the employee, deposited in the first week of the following month. Employee income tax runs in seven bands from nil to 30%. The employer withholds on the monthly gross income reduced by 15%, using the Department's Annexure I table. The tax guide has the full band table and a worked example. [Read the full Bhutan tax and payroll guide](/country-hiring-guides/bhutan/tax-and-payroll) ## How do you terminate an employee in Bhutan? Either side needs at least 30 days of notice, or the pay for that period. A redundancy adds 7 days for each year of service, up to 42 days. A court can order compensation of one month's pay for each year of service, up to six months, for a wrongful dismissal. An employer can dismiss without notice only for serious misconduct, after a fair chance to answer the allegations. The employer carries the burden of proving a valid reason. [Read the full Bhutan termination and severance guide](/country-hiring-guides/bhutan/termination-and-severance) ## Frequently asked questions How much does it cost to hire an employee in Bhutan? Plan on gross pay plus the employer's provident fund contribution of at least 5% of the monthly basic wage, plus paid leave and a gratuity after ten years. We found no other employer payroll tax. The cost breakdown guide has worked examples. Can a company hire in Bhutan without its own entity? It can depend on the route. The Labour and Employment Act requires a licence to act as an employment agent, and its definition covers employing someone to make them available to a third person. Teamed's experts check the route with you before any commitment. What is the minimum wage in Bhutan in 2026? The last national minimum wage circular we could read, dated 31 October 2013, sets Nu 125 a day or Nu 3,750 a month from 1 February 2014. We confirm the rate in force before a first payslip, because the circular is old. How much annual leave do employees get in Bhutan? At least 1.5 days a month, which is at least 18 working days a year, accruing after probation. Employees also get at least 9 paid public holidays, at least 5 working days of sick leave and 5 of casual leave. Is there a thirteenth-month payment in Bhutan? We found none in the Labour and Employment Act or the Regulation on Working Conditions. The Regulation sets a gratuity after ten years of continuous employment and a provident fund, and any bonus is a matter of contract. Which law governs employment in Bhutan? The Labour and Employment Act of Bhutan 2007 and the Regulation on Working Conditions 2022. Income tax sits in the Income Tax Act of Bhutan 2025, in force from 1 January 2026. A note from Tom Price-Daniel Bhutan sets a 48-hour week, 18 working days of leave and a provident fund, and it licenses who may employ people for someone else. Most surprises come from the structure, and from a minimum wage circular that dates from 2013. Read the guide for the layer you are on before the first offer goes out, not after the first payslip. Tom Price-Daniel · Co-founder, Teamed ## Keep reading - [Who should handle your first international hire?](/first-hire) - [Bhutan hiring guide](/country-hiring-guides/bhutan/hiring-guide) - [Bhutan termination and severance](/country-hiring-guides/bhutan/termination-and-severance) - [Bhutan tax and payroll](/country-hiring-guides/bhutan/tax-and-payroll) - [Bhutan cost breakdown](/country-hiring-guides/bhutan/cost-breakdown) - [Bhutan EOR vs entity](/country-hiring-guides/bhutan/eor-vs-entity) - [Hiring contractors in Bhutan](/contractor-hiring-guides/bhutan) - [What is an Employer of Record?](/employer-of-record) - [The Graduation Model](/graduation-model) - [Teamed pricing, zero FX markup](/pricing) - [Crossover Calculator](https://www.teamed.global/tools/crossover-calculator) A note on this page. This is a guide, not legal, tax or accounting advice. We read the figures on this page from official Bhutanese texts on 21 October 2026. They are the Labour and Employment Act of Bhutan 2007 and the Regulation on Working Conditions 2022. They also include the Ministry's national minimum wage circular of 31 October 2013. On tax they are the Income Tax Act of Bhutan 2025, its Rules and the Department of Revenue and Customs notices. For foreign owners and workers they are the FDI Rules and Regulations 2025 and the Rules and Regulations on Foreign Workers Management 2024. We found no enacted amendment to the Labour and Employment Act and no later minimum wage circular in the sources we checked. We also found no official text that fixes a provident fund rate above the 5% minimum. So we confirm the minimum wage in force and the provident fund scheme before a first payslip. Confirm current requirements with the Department of Labour, the Department of Revenue and Customs and a qualified adviser before relying on any figure. Sources. [Labour and Employment Act of Bhutan 2007, Ministry of Industry, Commerce and Employment](https://www.moice.gov.bt/wp-content/uploads/2022/08/labouract.pdf) . [Regulation on Working Conditions 2022](https://www.moice.gov.bt/wp-content/uploads/2022/06/Regulation-on-Working-Conditions-2022.pdf) . [National minimum wage circular, 31 October 2013](https://www.moice.gov.bt/wp-content/uploads/2017/12/Revised-National-Minimum-Wage-2013-English-Adv.pdf) . [Department of Revenue and Customs, notification on tax rates, 16 December 2025](https://www.drc.gov.bt/wp-content/uploads/2025/12/Public-Notification-on-new-Income-Tax-Act.docx-1.pdf) . [Department of Revenue and Customs, TDS return and deposit notification, 4 February 2026](https://www.drc.gov.bt/wp-content/uploads/2026/02/TDS-return-and-deposit.pdf) . [Foreign Direct Investment Rules and Regulations 2025](https://www.moice.gov.bt/wp-content/uploads/2025/08/FDI-Rules-Regulations-2025.docx.pdf) .