Employee Benefits in Bhutan

Bonuses and additional payments

In Bhutan, the Bhutan Labour and Employment Act (Section 126) provides for an annual basic bonus, which is a mandatory one-month’s wage for employees who have completed one year of continuous service. This is separate from any performance-based incentive an employer may choose to provide.

Annual leave

Employees in Bhutan are entitled to paid vacation leave after completing one year of continuous service. The statutory entitlement is 15 days per year for all employees, as mandated by the Labour Act. This leave is fully paid and can be taken throughout the leave year, as agreed between employer and employee. 

Additional leave may be offered as part of an employment contract, though it is not required by law. Many employers offer enhanced leave policies to stay competitive and improve retention. 

Unused statutory leave must be taken within the calendar year it is earned or within the first three months of the following year. Payment in lieu of unused leave is only permitted upon termination of employment.

Sick leave

Personal and sick leave are governed by the Bhutan Labour and Employment Act. Employees are entitled to ten days of paid sick leave per year, with a medical certificate required after three consecutive days of absence. Employers may offer more generous sick leave policies through employment contracts.

Parental leave

Employers must provide 90 days of fully paid maternity leave, funded by the National Pension and Provident Fund (NPPF). Pregnant employees who have worked for an employer for at least twelve months prior to the expected date of delivery are eligible for benefits. Written notice must be provided to the employer at least eight weeks before the due date.

Additional benefits

In addition to the above, employers contribute 10% of an employee’s gross salary to the NPPF for retirement savings, while the employee contributes 5%. 

When it comes to health insurance, Bhutan provides universal basic healthcare free of charge to all citizens through the National Health Service. Employers are not required to provide private health insurance. While Bhutan’s universal healthcare system provides comprehensive coverage, some expatriates and local professionals may seek supplemental private care.  

As your employer of record in Bhutan, we can consult with you about supplemental coverage options, such as additional pension contributions or private international health insurance, if needed.