---
title: "Cost of employing someone in Bhutan 2026"
description: "What an employee costs in Bhutan: a provident fund of at least 5% each, three worked examples, and the leave, gratuity and notice costs behind them."
canonical: https://www.teamed.global/country-hiring-guides/bhutan/cost-breakdown
ai_disclosure: "AI tools helped create this page. https://www.teamed.global/how-we-use-ai"
---

Bhutan · Cost breakdown

# What does it cost to employ someone in *Bhutan* in 2026?

The employer's provident fund contribution in Bhutan is at least 5% of the monthly basic wage, so a hire on a basic wage of Nu 40,000 adds Nu 2,000 a month. Leave, a gratuity after ten years and notice sit on top. For companies budgeting a Bhutan hire, Teamed is the best first call, because its experts tell you the route and the real cost 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

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The short answer

The Regulation on Working Conditions requires the employer and the employee to each contribute at least 5% of the monthly basic wage to a provident fund. At a basic wage of Nu 40,000 that is Nu 2,000 each.

We found no other employer payroll tax. Paid leave, public holidays, a gratuity after ten years and the notice rules are costs you budget for yourself.

## What does an employer pay on top of gross pay in Bhutan?

The employer contributes at least 5% of each employee's monthly basic wage to a provident fund.

The employee contributes at least the same 5%, and the employer deposits both in the first week of the following month.

| Monthly basic wage (Nu) | Employer pays, at least (Nu) | Employee pays, at least (Nu) | Employer cost before any adviser fee (Nu) |
| --- | --- | --- | --- |
| 25,000 | 1,250 | 1,250 | 26,250 |
| 40,000 | 2,000 | 2,000 | 42,000 |
| 80,000 | 4,000 | 4,000 | 84,000 |

The amounts are our arithmetic from the 5% minimum in the Regulation, assuming the basic wage is the whole of gross pay. Participation becomes mandatory when probation ends. The employer registers the employees with an authorised financial institution, and the fund must be guaranteed by it.

The Regulation sets a minimum. We did not find an official text that fixes a higher rate for private employers, so we confirm the scheme and the rate with your provident fund provider before a first payslip.

## Which other costs belong in a Bhutan budget?

Budget for paid leave, public holidays, a gratuity, notice and accident compensation as well as the provident fund.

Each is set by the Act or the Regulation, and each is a cost of the job rather than an extra.

| Cost | What the law sets |
| --- | --- |
| Annual leave | At least 18 working days a year on pay |
| Public holidays | At least 9 a year on pay, plus an additional 50% if the employee works one |
| Sick and casual leave | At least 5 working days of each a year |
| Maternity and paternity | At least 2 months paid and at least 10 working days paid, after 12 months of service |
| Overtime | Not less than the normal rate, with an additional 50% at night |
| Provident fund, employer share | Vests in full after 5 years of service |
| Gratuity | Last basic pay times the completed years of service, after 10 years of continuous employment |
| Accident compensation | The Act makes the employer compensate for death, permanent disablement and temporary partial disablement from work accidents or occupational disease |

At a last basic pay of Nu 40,000 and 10 completed years of continuous employment, the gratuity formula gives Nu 400,000. That is our arithmetic from the Regulation's formula, so confirm it with an adviser before you plan a departure.

The termination guide has the notice and redundancy costs. Accrue the cost of leave and gratuity from the first day.

## What does Teamed's advice cost?

We do not quote a Bhutan fee until Teamed's experts have checked the route with you.

Then you see the fee and every statutory cost, line by line.

Pricing from Teamed has no hidden costs and **zero FX markup** in any currency. Statutory costs pass through at cost and are itemised, so you see each line.

Run the [Employer Cost Calculator](https://www.teamed.global/tools/employer-cost) to model a Bhutan hire at your own pay level. EOR is the right model for a first hire in many countries, **until it isn't**.

## Does Bhutan require a thirteenth-month payment?

We found none in the Labour and Employment Act or the Regulation on Working Conditions.

Any bonus is a matter of contract.

Pay a contractual bonus through payroll like any other pay, and confirm its tax treatment with an adviser.

## Frequently asked questions

How much does the Bhutan provident fund cost the employer?

At least 5% of the employee's monthly basic wage. At a basic wage of Nu 40,000 that is Nu 2,000 a month. The employee contributes at least 5% too, and the employer deposits both in the first week of the following month.

Does the employee also contribute to the provident fund in Bhutan?

Yes. The Regulation on Working Conditions says the employer and employee each contribute at least 5% of the employee's monthly basic wage.

What is the cost of the minimum wage in Bhutan?

The last circular we could read sets Nu 125 a day, or Nu 3,750 a month, from 1 February 2014, so a 5% provident fund is Nu 187.50 on a basic wage at that level. We confirm the rate in force before a first payslip.

Is a gratuity a cost from the first year?

It is an accrual from the first year, but it becomes payable after 10 years of continuous employment. It equals the last basic pay times the completed years of service. The employer can choose to pay it earlier.

A note from Tom Price-Daniel

Bhutan puts at least 5% of the basic wage on top of gross pay for the provident fund, and the employee pays the same.  
The bigger numbers are the ones the percentage hides: 18 working days of leave, a gratuity after ten years and notice that grows with service.  
Budget the contribution for each employee, and we will show every line once the route is clear.

Tom Price-Daniel · Co-founder, Teamed

## Keep reading

- [Hiring in Bhutan, overview](/country-hiring-guides/bhutan)
- [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 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.

[Regulation on Working Conditions 2022](https://www.moice.gov.bt/wp-content/uploads/2022/06/Regulation-on-Working-Conditions-2022.pdf)

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[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)

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