What changed in Bhutan's tax system in 2026?

Two changes took effect on 1 January 2026. A 5% Goods and Services Tax (GST) replaced sales tax, and the Income Tax Act 2025 came into force. Annual taxable income up to Nu 300,000 is now tax-free, and rates rise from 5% to 30% above Nu 3.5 million. Provident fund and group insurance deductions were replaced by a standard deduction of 15% of employment income, capped at Nu 150,000.

What is the minimum wage in Bhutan?

The national minimum wage is Nu 215 a day, or about Nu 6,450 a month, and it applies to all workers regardless of nationality. Professional roles usually pay well above it. A revision has been under discussion, so we check the current rate before we issue a contract.

How can I hire in Bhutan without a local entity?

Good Balance Global can act as your Employer of Record (EOR). We become the legal employer, issue a contract under Bhutanese labor law, and run payroll and tax withholding in ngultrum. For foreign hires, we handle the work permit sponsorship. You manage the day-to-day work.

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Payroll and benefits guide

Bhutan

CapitalThimphu

Fiscal Year1 January - 31 December

Date Formatdd/mm/yyyy

CurrencyBTN (Bhutanese Ngultrum)

Payroll FrequencyMonthly

Employer Taxes5%

Employee Costs5%

Overview

Languages: Dzongkha
Income tax: 0% – 30%
VAT: 5%; Goods and Services Tax (GST), which replaced sales tax from 1 January 2026

Contributions

Employer

Provident fundStatutory minimum; all employers must join the NPPF or an approved provident fund scheme under the Regulation on Working Conditions 2022

Total employer cost

Employee

Provident fundStatutory minimum, deducted from salary

Total employee costExcludes tax deducted at source (TDS)

Minimum Wage & Working Hours

Minimum wage: Nu 215 / Daily; National minimum wage, about Nu 6,450 a month; applies to all workers regardless of nationality

Leave

Public holidaysAt least 9 days a yearPaid, including the King's birth anniversary and National Day; work on a public holiday earns an extra 50%

Leave type	Duration	Notes
Public holidays	At least 9 days a year	Paid, including the King's birth anniversary and National Day; work on a public holiday earns an extra 50%

Termination

Probation period: Up to 180 days for contracts of 1 year or more; either party can end the contract during probation with 7 days' notice. Probation can't be repeated for the same or similar work
Notice period: At least 30 days, the same for employer and employee
Notes: For redundancy, an extra 7 days per year of continuous service, up to 42 days, after consulting employees and notifying the Chief Labour Administrator

Benefits

Provident fundMandatory
Required for all employers under the Regulation on Working Conditions 2022, through the NPPF or an approved insurer scheme

Visas & Work Permits

Foreign worker work permit
Requirements
Sponsorship by a local employer and approval from the labor ministry; the permit is tied to the employer and role

FAQ

Sources

Last updated: November 1, 2026

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