Employer of Record (EOR) Services in Bhutan

Employer of Record

From
$249/month

Contractor  Management

$49/month

Talent Sourcing

2% of gross salary / month

Start hiring in Bhutan

Simple, compliant hiring with Horizons EOR & PEO

Hire in Bhutan

The Kingdom of Bhutan is a small, remote country tucked into the Himalayas and wedged between China and India. With a population of only 775,000, this country has one of the smallest populations in the world. To protect its culture, the country banned TV and the internet until just 1999 when it became one of the last countries in the world to have these technologies. After adopting a new constitution in 2008, Bhutan became a constitutional monarchy and started to promote healthy development. Since this time, the country’s GDP has more than doubled, reaching $2.9 billion in 2023, and is expected to grow by 4.3% in 2024.

If you’re thinking about hiring workers in Bhutan, now is a great time and partnering with an EOR is one of the best ways to do it.

Facts & Stats

hire employees in Bhutan

What Is a Bhutan EOR?

An EOR is an employer of record, a service provider that can hire employees in one country on behalf of clients based in other countries. A Bhutan EOR can legally hire employees and contract them to work for your business without you needing to register an entity or even set foot in Bhutan. Without an EOR, you’d need to go through the long, difficult, and expensive process of registering a business in the country. You’d also have to work with lawyers and accountants regularly and that would further increase your costs. Instead, Bhutan EORs can recruit and hire your workers and then handle payroll, leave scheduling, benefits administration, and more. You pay the EOR a regular fee for each employee it manages and outsources your human resources (HR) functions for them to perform.

Save Money And Time with A Bhutan EOR

What Are the Benefits of a Bhutan EOR?

If you’ve never worked with an EOR before, you’ll discover that these service providers can greatly increase the convenience and efficiency of international hiring. The benefits of working with a Bhutan EOR include:

Not needing an entity: Without an EOR, you’d likely need to travel to Bhutan and work through the challenging process of registering a limited liability company or a corporation. This is going to cost a lot of time and money to set up and manage over the long term. It’s likely not worth it if you’re only looking to hire a few Bhutanese employees. Instead, an EOR can hire employees on your behalf, becoming their sole legal employer in Bhutan. While they will work for you, the EOR provides HR services to see to all their employment needs.
Language skills: Bhutan’s official language is Dzongkha, a Tibetan dialect. Bhutanese people also speak other local Tibetan languages and the languages of nearby Nepal and Sikkim, India. In Bhutan’s cities, especially due to its thriving tourism industry, English is widely spoken as an unofficial second language. These linguistic skills can make doing business in Bhutan easy and help businesses interested in doing business in the wider region as well.
Fast recruitment and onboarding: Most EORs have their own labor pools that you can select candidates from. If not, they’re able to advertise your vacancies effectively due to their familiarity with the local labor market. If you tried to hire Bhutanese employees on your own, you’d likely find that it would take weeks to months to find the talent you need. With an EOR, this can be reduced to anywhere from a few minutes to a couple of weeks. Once candidates are selected, EORs can onboard them quickly, usually through their online platforms, and the whole process rarely takes longer than a few days.
Affordability: Bhutan is a lower-middle-income country where salaries are quite low. Employers also pay just 5% of worker’s salaries toward social security. This means that Bhutanese employees can be highly affordable for most foreign-based firms.
Constant compliance: Partnering with an EOR makes the service provider the sole legal employer of your workers in Bhutan. With its extensive knowledge of local tax and labor laws in the country, the EOR prepares contracts that respect the workers’ rights and enters into these contracts with them. It also handles payroll, which means it can ensure that taxes and social security contributions are always properly calculated and remitted on time. In these ways, the EOR maintains constant compliance with employment laws and protects your company from fines and other penalties.

Horizons is Best IN Class

Why Choose Horizons?

Horizons stands out as a Bhutan EOR through:

A strong regional presence in the Asia-Pacific region, meaning senior management are on the ground to deal with any issues.
Client-focused infrastructure. Horizons won’t oversell you on products and services you don’t need. Horizons offers the easiest platform to compliantly hire and pay people worldwide.
Cost-effective solutions. At $499 per employee, per month, no EOR in Bhutan is more affordable. The cost is 100% transparent (onboarding, offboarding, deposit, no extra charges).
A customer-first culture. Horizons is an efficient bootstrapped company. It is not an externally-funded company burning investor cash to aggressively acquire new clients. Horizons is the only EOR that grows with its customer, reflecting the level of care and personal attention provided to each customer. Horizons will carefully advise on the best setup in each country: the type of contract needed, how to structure your benefits, and how to offboard a person while minimizing the risk of conflicts and extra cost
A long-term partnership. Horizons is the only EOR platform with a recruitment arm — a direct response to client demand. If any employee is leaving, or if our clients want to explore a new country, Horizons can recruit new candidates directly for the client. Horizons is:
- The only EOR doing this in-house — no subcontracting
- The only EOR doing this without a retainer — clients are only charged upon success
- The only EOR charging just a 2% fee per month.

Step-by-step Bhutan EOR

How Does a Bhutan EOR Work?

When you work with an EOR in Bhutan, you gain a valuable partner who can help you hire and manage local employees with ease. EORs typically provide the following services for their clients:

Hiring your employees: Some EORs offer recruitment services, which you can make use of if you haven’t already connected with the employees you wish to hire. Using its labor pools and local networks, an EOR can find you the people you need to fill your vacancies, whether you need an individual or a whole team. Once it finds appropriate candidates, it will put them forward to you for approval. Once you accept candidates, the EOR will hire them, becoming their sole legal employer in Bhutan while contracting them to work for you.
Managing employment contracts and onboarding: Most EORS will help you negotiate terms with candidates you want to hire by recommending working conditions and salaries that are appropriate and attractive. These terms can be negotiated directly with the candidates. Once they’re agreed upon, they’ll be formalized when the EOR writes legal contracts and enters into them with the employees. Once they’re officially hired, or sometimes even before, the EOR can start onboarding your workers for you. This is typically done through their online platforms with the workers uploading and signing relevant documents. They’ll be entered into the EOR’s employee management system and be ready to get to work.
Processing payroll and handling employment taxes: Payroll is one of the HR functions you’ll normally outsource to the EOR. While you still need to collect worked hours data, you’ll transfer it and the EOR will do the rest. Based on your data, it will calculate each employee’s gross salary and then calculate taxes and social security contributions. It will disperse the workers’ net salaries to them, remit withheld employee taxes, and pay social contributions. All of the EOR’s payroll records will be kept for you and it will also give each employee a detailed payslip for their information. The EOR will invoice you regularly for the funds needed for all of these tasks.
Administering benefits: Mandatory benefits like sick leave and paid holidays will be managed automatically by the EOR’s system. If you choose to offer your employees additional benefits like private pensions or insurance, these are often available for purchase as add-ons from the EOR. Otherwise, these programs can be purchased externally and the EOR can manage regular payments for you.
Taking care of exit procedures: When you need to terminate workers, either for individual reasons or group reasons like winding down your operations, the EOR will take care of this for you. As the employee’s legal employer, the EOR will have to provide them with appropriate notice and, if necessary, pay them severance.

stay compliant with Bhutan labor laws

Labor Laws

Bhutan completely modernized and reformed its employment laws with the Labour and Employment Act of Bhutan 2007 and the Constitution of Bhutan 2008. Since then, many other acts, rules, and guidelines direct employment in various industries. As the legal employer of your workers, it’s the EOR’s role to understand the application of all of these various laws and maintain compliance with them. At the same time, it’s useful for you to be aware of these major points of law so you know what you’ll need to provide for your Bhutanese workers.

Employment contract types

Contracts in Bhutan must be in written form and contain the duration of the work, tasks to be performed, notice period for termination, wages, working hours, probation period, and leave provisions. Fixed-term contracts are allowed; however, if a contract doesn’t specify a term, it will be considered permanent.

Project-based

Fixed-term

Indefinite

Working hours in Bhutan

The standard working hours in Bhutan are 8 hours per day and 48 hours per week. Overtime is allowed only by mutual agreement between the employee and employer. These overtime hours must not exceed 12 hours per week.

Overtime must be compensated in the following way:

Holiday Schedule in Bhutan [2024]

Bhutanese employees are entitled to at least nine paid public holidays each year.

Date	Holiday name
2 Jan, 2024	Nyinlo
12 Jan, 2024	Traditional Day of Offerings
5 Feb, 2024	Crown Prince’s Birthday
10 Feb to 11 Feb	New Year
21 Feb to 23 Feb	5th King’s Birthday
30 Apr, 2024	Death of Zhabdrung Shabdrung Kochoe
2 May, 2024	3rd King’s Birthday
2 Jun, 2024	4th King’s Coronation Anniversary
4 Jun, 2024	Lord Buddha’s Parinivana
16 Jun, 2024	Guru Rinpoche’s Birthday
10 Jul, 2024	First Sermon of Lord Buddha
5 Aug, 2024	Death of 3rd King

Paid time off

An employee who works for the first two hours of a shift is entitled to one ten-minute break. This may be taken or added to their meal break, which is given after four hours of work and lasts 30 minutes. These breaks are not paid.

Workers must be given at least 12 hours of rest between shifts and at least one period of 24 hours of rest per week.

Sick leave in Bhutan

Employees are entitled to five days of paid sick leave annually and must notify their employers to use this leave. Unused sick leave can be rolled over for up to five years.

Less than 6 months of sick leave:

(percentage of regular wages owed to the employee)

Over 6 months of sick leave

In order for employees to receive the full wages due to them, workers must present a valid medical certificate from a certified doctor to their employer.

Maternity leave in Bhutan

Expecting mothers are entitled to a minimum of two months of maternity leave after working for at least one year. Fathers who have worked for an employer for over a year are entitled to 10 working days of paid paternity leave.

Annual leave in Bhutan

Employees who have completed probation are entitled to 1.5 days of annual leave for each month worked or 18 days per year. Unused leave may be encashed.

Termination & severance in Bhutan

Employees’ contracts can be terminated with 30 days’ notice. Any employee who has worked for over 10 years for an employer is entitled to a gratuity of one month’s salary for each year of service provided.

Bhutan's compulsory social security contributions

The social security are regulated by the Social Security and Welfare Act and are managed by the Royal Insurance Corporation of Bhutan (RICB).

Employees are required to contribute 3% of their monthly salary towards the social security fund while employers contribute 5%.

The contributions cover various benefits including old-age pensions, disability benefits, and survivor benefits. This ensures that employees have financial support in these situations.

Bhutan social security for foreigners

The social security typically apply to all employees working in Bhutan, including foreign workers, unless specific exemptions are provided by law or bilateral agreements.

Individual income tax

Income tax is governed by the Income Tax Act of Bhutan and is administered by the Department of Revenue and Customs. Income tax rates are progressive, meaning that different portions of income are taxed at different rates.

Includes all forms of income such as salaries, wages, business profits, rental income, and any other sources of income. Various deductions are allowed, including those for expenses related to earning income, contributions to social security, and other allowances as specified by the tax laws.

Health insurance

Bhutan’s health care system is largely funded by the government through subsidies. The government provides free or highly subsidized health care services at public hospitals and clinics across the country. The Royal Insurance Corporation of Bhutan (RICB) is involved in providing health insurance products. Public health insurance schemes may be offered through this or similar institutions.

In addition to public health coverage, individuals may opt for private health insurance policies to cover additional services or provide more extensive coverage than what is available through public health services.

hassle-free Bhutanese compensation & benefits

Compensation & Benefits

Bhutan compensation laws

The state-mandated minimum monthly salary in Bhutan is 3,750 BTN (Bhutanese ngultrum)/month (about 45 USD/month). Average salaries for more skilled workers are higher at roughly 30,000 BTN/month (around 350 USD).

Overtime must be paid at a higher rate than the worker’s normal wages, though there is no rate mandated. However, for overtime hours performed between 10:00 p.m. and 8:00 a.m. and any work performed on public holidays, the worker must be paid 150% of their normal wages.

13 month salary in Bhutan

A 13th-month annual bonus is not mandatory in Bhutan.

Social security for Bhutanese nationals

Employers in Bhutan pay contributions equal to 5% of a worker’s salary for old age, invalidity, and survivor’s benefits, and employees are deducted 5% of their salaries for the same.

Hire borderless talent with Horizons

Hire in Bhutan without your own local entity.

With Horizons, you get quick service, transparent pricing, and expert support.

Frequently asked questions

How does an EOR in Bhutan handle compliance with local labor laws?

A Bhutan EOR will have legal experts to advise it on producing contracts that are fully in line with local labor laws. By handling tax and social security deductions through payroll and administering benefits, the EOR also ensures that workers receive their entitlements regularly.

What are the key benefits of using an EOR for hiring in Bhutan?

Working with a Bhutan EOR allows you to recruit and hire quickly. The EOR handles all relevant HR functions for you and maintains compliance with local laws. Best of all, this partnership allows you to hire Bhutanese workers without having to own a business entity in the country.

Employer of Record (EOR) Services in Bhutan