Payroll in Bangladesh: attendance, overtime and income tax without spreadsheets

Payroll in Bangladesh has a particular shape: a mix of monthly staff and daily-rated workers, shifts that start at seven in the morning, overtime that has to be counted and paid at the right rate, attendance from a fingerprint device that somebody exports once a month, festival bonuses, salary advances before Eid, and income tax to deduct under whatever slabs the NBR set for this financial year. Most businesses run it in a spreadsheet built by someone who has since left. This guide explains what payroll software should do at each step so that the sheet can retire.

The spreadsheet problem

A payroll spreadsheet works until it does not. Attendance is typed from a device report, so late marks are disputed. Overtime is a formula someone changed last Ramadan. Advances are remembered or forgotten. Tax is estimated because the slab formula is complicated and the declarations are on paper. And the month it breaks is the month before Eid, when everyone is waiting for salary. Payroll software replaces the sheet with a chain: attendance feeds hours, hours and salary structure feed gross pay, deductions and tax feed net pay, and the ledger is posted automatically.

Attendance from a biometric device

ZKTeco fingerprint and face devices are common in offices and factories across Bangladesh. The problem is not the device; it is getting punches out of it and into payroll without a USB drive. A payroll system should sync the device automatically. In SORS ERP, a small LAN sync agent runs on a Windows PC or as a Node service inside the office, reads punches from the ZKTeco device and pushes them to the cloud, so attendance appears in the HR module the same day, even though the ERP itself is hosted online. Attendance corrections, for a forgotten punch or a device fault, go through an approval step so that changes are visible and logged.

Shifts, late marks and overtime

A garment floor, a retail counter and a head office keep different hours. The software should let you define shift schedules (start, end, grace period, break), assign shifts to employees or departments, and rotate them. From punches and shifts it should calculate late arrivals, early departures, absent days and overtime hours automatically. Overtime rules differ by employer and by the law that applies to the workplace, so the rate and the basis (for example, a multiple of the basic hourly rate) should be configurable, and overtime should be approved before it is paid. Punctuality analysis by department tends to change behaviour faster than any memo.

Leave and holidays

Leave types (casual, sick, earned, maternity and any company-specific type) with entitlements per year, a leave application and approval workflow that staff can use from a phone, and a holiday calendar that includes the government list and your own closures. Leave without pay should flow into the salary calculation as a deduction without anyone re-typing it. Time-off and work-from-home requests belong in the same place so a manager sees the team’s day at a glance.

Salary structure: payheads and components

Define the structure once and assign it to employees.

Component	Type	Example
Basic	Earning, fixed	Base of most percentage calculations
House rent, medical, conveyance	Earning, fixed or percentage of basic	Common allowances in Bangladesh
Overtime	Earning, calculated	Approved hours times the configured rate
Attendance bonus	Earning, conditional	Paid when there is no absent day in the month
Festival bonus	Earning, periodic	Paid before Eid, usually a multiple of basic
Provident fund	Deduction, percentage	Employee and employer share tracked separately
Salary advance recovery	Deduction, scheduled	Instalments against an advance
Absent deduction	Deduction, calculated	Leave without pay days
Income tax	Deduction, calculated	From the configured slabs and the employee’s declaration

Each component is a payhead that posts to a ledger account, so the payroll journal to accounting is automatic and the salary expense lands in the right cost centre.

Advances and deductions

Salary advances are a fact of life around Eid. The software should record the advance as a loan to the employee, agree a recovery schedule, and deduct the instalments automatically each month until cleared, with the balance visible on the payslip. Other deductions, such as a fine under a disciplinary action or a phone bill recovery, should be entered once against the employee and month rather than in a hidden spreadsheet column.

Income tax: configurable slabs, not hard-coded numbers

Bangladesh income tax on salaries is deducted at source by the employer and depends on the slabs and exemptions set by the NBR for each financial year, plus the employee’s own declaration of investments and other income. The rules change with the Finance Act. That has one implication for software: the slabs must be configurable per financial year, following the NBR circular, not hard-coded. In SORS ERP you set the slabs for the year, employees submit tax declarations, and the monthly deduction is calculated automatically. We deliberately do not quote slab figures in our documentation; your accountant should enter them from the current circular and check the first month’s calculation by hand. The garments and manufacturing and service business pages describe how this plays out in those sectors.

The payroll run

A good payroll run is a controlled sequence rather than one big button.

1. Process. Pull attendance, leave, overtime, advances and tax for the period and compute gross and net for every employee.
2. Approve. A second person reviews the salary sheet, checks anomalies (an overtime spike, a new joiner’s pro rata amount) and approves.
3. Disburse. Pay through bank transfer, MFS or cash, and record the payment method per employee.
4. Finalise. Lock the period, post the journal, and generate payslips.

The salary sheet becomes the document for the bank and the auditor; the ledger posting happens once, correctly, and the reports module can schedule the monthly salary summary to the owner’s inbox.

Payslips and final settlement

Payslips as PDFs, per employee, per month, with earnings, deductions, tax and the advance balance shown. When an employee leaves, a final settlement calculates the last salary pro rata, unused leave encashment where your policy allows, outstanding advances and any other dues, and produces a settlement statement for signature. Keeping these documents inside the system rather than in a folder matters when a labour dispute or an audit asks for them two years later.

What is not there yet

Being clear about the edges: in SORS ERP, probation and notice-period tracking, resignation and exit clearance workflows, training programs and certificates, bonus and incentive schemes beyond configured payheads, salary arrears and the service book are on the roadmap rather than in the product today. Recruitment, performance appraisal, disciplinary actions and warning letters are live. If one of the roadmap items is central to you, ask about timing before you sign.

Where SORS ERP fits

SORS ERP’s HR and payroll module covers employees and departments, ZKTeco biometric sync through a LAN agent, shifts, leave, overtime, attendance corrections, salary structures with payheads, advances, income tax with slabs configurable per financial year, a process, approve, disburse and finalise payroll run, PDF payslips, salary sheets and final settlement, with the journal posted to the accounting module automatically. It is a browser-based system from a company founded in 2024, without a native mobile app; staff use the web app on their phones for leave and time-off requests. Several HR phase-two items listed above are still on the roadmap, and we would rather say so here than in month three.

To run one month of your own attendance file and salary structure through a live payroll, request a demo.

Written by the team that builds SORS ERP, the ERP described on this site. We implement it ourselves in Bangladesh, so the guidance here comes from setups we run rather than from general research. More about SORS Technology.

Frequently asked questions

Does the payroll software include Bangladesh income tax slabs?

The slabs are configurable per financial year following the NBR circular, rather than fixed in the software, because they change with the Finance Act. Your accountant enters the current slabs and exemptions, employees submit tax declarations, and the monthly deduction is calculated automatically.

Which biometric attendance devices work with SORS ERP?

ZKTeco fingerprint and face devices, through a LAN sync agent installed on a Windows PC or as a Node service in the office. The agent reads punches from the device and pushes them to the cloud, so attendance appears the same day without anyone exporting a file.

Can employees apply for leave and get payslips on a phone?

SORS ERP is a responsive web app, so leave applications and time-off requests can be made through a browser on an Android phone, and payslips are generated as PDFs that can be emailed or printed for each employee. There is no separate native mobile app.

Can one payroll handle factory shift workers and office staff together?

Yes. Shift schedules are assigned per employee or department, so a rotating factory shift and a fixed office schedule run in the same payroll period with their own late and overtime rules. Salary structures are also assigned per employee, so daily-rated and monthly staff coexist.