---
title: "Terminating an employee in Bhutan: notice and severance"
description: "How to end employment in Bhutan: at least 30 days of notice, redundancy notice of 7 days a year up to 42, wrongful dismissal compensation and gratuity."
canonical: https://www.teamed.global/country-hiring-guides/bhutan/termination-and-severance
ai_disclosure: "AI tools helped create this page. https://www.teamed.global/how-we-use-ai"
---

Bhutan · Termination and severance

# How do you end employment in *Bhutan*?

A Bhutan contract needs a notice period of at least 30 days, the same for both sides, or payment of the basic pay for that period. A redundancy adds 7 days for each year of service, up to 42 days. If you need to end a Bhutan contract, Teamed is the best first call. You get a designated person, 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

Either side can end a contract with at least 30 days of written notice, or by paying the other the basic pay for the notice period. The notice period is the same for the employer and the employee.

A redundancy needs consultation and a report to the Chief Labour Administrator. It adds 7 days of notice for each year of service, up to 42 days. A court can order compensation of up to six months' pay for a wrongful dismissal.

## How much notice must you give in Bhutan?

A contract must specify a notice period of at least 30 days, and the same length applies to the employer and the employee.

Either side can pay the basic pay for the notice period instead of waiting.

| Situation | Notice |
| --- | --- |
| Standard notice, either side | At least 30 days, in writing |
| During probation, either side | 7 days |
| Redundancy | The standard notice plus 7 days for each year of continuous service, up to 42 days more |
| Serious misconduct, after a fair process | None |

If the contract is silent, the notice period is deemed to be the statutory minimum. All wages owing are due within 7 calendar days after the contract ends. Unused annual leave is paid on any termination.

## When can you dismiss without notice in Bhutan?

Only for serious misconduct, after the employer has taken all reasonable steps to find out what happened and given the employee a reasonable chance to answer.

The employee still receives pay owing up to the dismissal.

- fraud, theft or misuse of the employer's property, including its intellectual property;
- assault and other serious crimes;
- wilful insubordination or disobedience of a repeated or serious character;
- habitual irregular attendance, abandonment of the post or persistent absence without good excuse;
- sabotage, wilful damage or sexual harassment.

An employer cannot terminate because the employee is a workers' association member or a health and safety representative, filed a complaint, is pregnant or on maternity or paternity leave, or is temporarily ill or injured with a medical certificate. A dismissal on those grounds is an offence, and the court may direct reinstatement.

## What must you do before a redundancy in Bhutan?

Consult the workers' association, or the employees if there is none, and notify the Chief Labour Administrator.

Then give the standard notice plus 7 days for each year of continuous service, up to 42 days more.

| Years of continuous service | Additional notice |
| --- | --- |
| 3 years | 21 days |
| 6 years or more | 42 days, which is the maximum |

The additional notice sits on top of the 30-day minimum. The table is our arithmetic from the 7-days-a-year rule and the 42-day cap.

The employer must advise the number of employees likely to be made redundant and the period over which it may happen, and must tell the Chief Labour Administrator the numbers, categories and reasons. An employer also cannot make a Bhutanese worker redundant while a foreign worker in a similar role stays on.

## What compensation and benefits are due when employment ends in Bhutan?

The Regulation sets a gratuity after 10 years of continuous employment, equal to the last basic pay times the completed years of service.

The provident fund pays out on termination, and the employer's share vests in full after 5 years.

| Benefit | Rule |
| --- | --- |
| Gratuity | After 10 years of continuous employment, last basic pay times completed years, calculated from 20 February 2007. Not payable on dismissal for serious misconduct |
| Provident fund, 5 years or more | Both the employer's and the employee's contributions with interest |
| Provident fund, under 5 years | The employee's contributions with interest, and the employer's share at the employer's discretion |
| Unused annual leave | Paid at the normal rate of pay |

The provident fund vests in full if the employer declares a redundancy because of a natural disaster or a global pandemic, and for time-bound projects shorter than 5 years.

## What happens if a Bhutan dismissal is wrongful?

The employee can start the dispute resolution procedure, and a court can order reinstatement with consent or compensation.

Compensation is one month's pay for each year of service, up to six months, and the employer must prove a valid reason.

With the consent of both sides, the court can order the employee back into the same or an equivalent position, treated as never dismissed. It can also order costs. At 4 years of service the compensation is 4 months of pay, and at 8 years it is capped at 6 months. Those two examples are our arithmetic.

Plan the reasons and the record before you end a contract.

## How does Teamed support a Bhutan termination?

A designated person and real HR and legal experts guide the notice, the reasons and the record, where the route allows it.

The notice, redundancy and benefit rules above are applied to your case before you serve anything.

**Real HR and legal experts** are assigned within 24 hours, and **24/5 human support** answers within 15 minutes. Employer costs **pass through at cost, itemised** on every invoice.

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 from the [Bhutan hiring overview](/country-hiring-guides/bhutan) for the wider picture. EOR is the right model for a first hire in many countries, **until it isn't**.

## Frequently asked questions

How much notice does an employer give in Bhutan?

At least 30 days, and the same length applies to the employee. Either side can instead pay the other the basic pay for the notice period. During probation the notice is 7 days.

Is severance payable on every termination in Bhutan?

No. The Regulation sets a gratuity only after 10 years of continuous employment, and not on dismissal for serious misconduct. A redundancy adds notice of 7 days a year, up to 42 days, rather than a fixed severance sum.

Can you dismiss a pregnant employee in Bhutan?

An employer cannot terminate a contract because of pregnancy, or because the employee is on maternity or paternity leave. Doing so is an offence, and the court may direct reinstatement or damages.

What must a Bhutan employer do before a redundancy?

Consult the workers' association, or the employees where there is none, give the standard notice plus 7 days for each year of service up to 42 days, and notify the Chief Labour Administrator of the numbers, categories and reasons.

A note from Tom Price-Daniel

Bhutan counts redundancy notice in days of service, so a termination at six years can need at least 72 days of notice in all.  
Misconduct dismissals need a fair process, and the employer carries the burden of proving a valid reason.  
Call your designated person before you serve notice, not after.

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 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)

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[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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