Employing in Cambodia
The Constitution and the 1997 Labor Law collectively govern labor relations, employment contracts, working conditions, and workers’ rights in Cambodia. The Labor Law broadly applies to workers engaged under employment contracts performed within Cambodia, excluding certain public servants and military personnel. It requires employers to provide employment contracts that may be fixed-term (up to two years) or indefinite, with specific provisions for probationary contracts (limited to three months for standard employees) and apprenticeship contracts (not exceeding two years).
Employers with eight or more employees must establish internal regulations approved by labor inspectors, which cannot restrict workers’ legal rights.
Onboarding time
Minimum Wage
Employer costs
Employee costs
Onboarding time
Team APAC can onboard your talents within an average of 96 hours.
Minimum Wage
The monthly minimum wage is equivalent to USD 208.
Employer costs
- Pension Fund – 2%
- Occupational Risk Contribution – 0.80%
- Health Care Contribution – 2.60%
Employee costs
- Pension contribution: 2%
- Payroll contribution: 2%
Payroll
The payroll process in Cambodia typically follows a monthly cycle, with salary payments made on the last working day of each month. Employers gather employee documentation, register the business with authorities, establish workplace policies, track attendance, and prepare statutory contributions such as social security.
Payroll cycle
Employers must pay salaries at least once a month, usually on the last working day of the month. For laborers, payments must be made at least every 16 days to comply with local labor regulations.
Payroll calculations
The payroll calculation phase involves inputting data to compute gross pay, deductions, overtime, and taxes, ensuring compliance with minimum wage and working hour regulations.
Compliance requirements
Employers in Cambodia are responsible for specific tax and social security contributions, including a 2.6% health insurance payment and a 0.8% contribution to the National Social Security Fund, capped monthly. Non-resident employees face a flat 20% tax rate.
Additional payments
13th Salary
In Cambodia, there is no statutory requirement for employers to pay a 13th-month salary to employees.
Bonuses
There is no legal requirement that employers provide employee bonuses, but many companies provide them as discretionary or contractual rewards, often linked to performance or company profits.
Commissions
Commissions are often provided as part of compensation packages, especially in sales roles or for services rendered as intermediaries, such as brokers or agents.
Other allowances
In Cambodia, common allowances, although not mandatory, include healthcare allowances, housing allowances, transportation allowances, and attendance bonuses.
Taxes
Cambodia does not have a traditional personal income tax system. Instead, it levies a monthly salary tax or contributions on individuals earning employment income. Residents, or those domiciled in Cambodia or present in the country for more than 182 days in a year, are taxed on their worldwide income. Non-residents are subject to a flat 20% tax on income sourced within Cambodia.
Employers are responsible for withholding and remitting this tax or contribution each month, and employees are not required to file personal income tax returns.
Employee Income Tax
The tax rates for residents are progressive, starting at 0% for monthly salaries up to 1.5 million KHR (approximately US$361) and increasing through several brackets to 20% for salaries exceeding 12.5 million KHR (around US$3,739). Fringe benefits are also taxed at a flat rate of 20%.
Income Tax
The income tax rates are as follows:
- 0% – From 0 to 1.500.000 KHR
- 10% – From 1.500.000 KHR to 2.000.000 KHR (capped at 75.000 KHR)
- 15% – From 2.000.000 KHR to 8.500.000 KHR (capped at 175.000 KHR)
- 20% – From 8.500.000 KHR to 12.500.000 KHR (capped at 600.000 KHR)
- 25% – Over 12.500.000 KHR (capped at 1.225.000 KHR)
Employment eligibility
Foreign nationals seeking employment in Cambodia must obtain a valid E-class visa (commonly the EB visa for employees) along with a work permit and an employment card issued by the Ministry of Labor and Vocational Training (MLVT). Employers act as sponsors and are responsible for compliance with immigration and labor regulations, with government inspections conducted periodically.
The application process involves submitting company registration documents, quota approval, and employee documents such as passport, visa, health certificate, and employment contract.
Visa
Employers are required to first obtain approval from the MLVT by demonstrating that no qualified Cambodian candidate is available for the position. Employment of foreigners is subject to a quota limiting foreign workers to 10% of the total workforce, divided into 3% for office staff, 6% for skilled labor, and 1% for unskilled labor. To employ foreigners beyond this quota, companies must seek special authorization from the MLVT.
Visa types
Cambodia offers several types of work visas and permits for foreign nationals seeking employment in the country. Here are some of the main types.
Types of Work Visas:
- EB visa – applies to those employed, starting a business, freelancing, or staying in the country for over one month. It also covers spouses and children of EB visa holders.
- EP visa – issued to foreign nationals who have entered Cambodia on an E-class visa and are seeking employment or planning to start a business after their initial 30-day stay. This visa allows a stay extension of up to three months, during which the holder must secure a job; otherwise, they must leave the country.
- EG visa – issued to foreigners looking for work in Cambodia with durations of one, three, or six months without specific employment conditions.
- ET visa – a technical visa extension for those employed in specific trades or industries, intended for skilled technicians and workers in designated sectors.
Compliance documents
To sponsor employees for Cambodia work visas and permits, companies must submit the following documents/ information:
- Certificate of incorporation bearing the company stamp
- Registered business address
- Tax patent with company stamp
- A list of all international and local employees to verify the ratio does not fall below 9:1
- Approval from the Ministry of Commerce (MOC)
- The company’s articles of incorporation
Employees must provide the following details/ documents:
- Full name, gender, date of birth, and height
- Copies of their ID cards and passports
- Copy of their E visa
- Current residential address
- Full names of their mother and father
- Educational background
- Three recent photographs
- Health certificate
- Job position and role within the company
- The year they first obtained their E visa
Background check
In Cambodia, visa-related background checks consist mainly of verifying criminal records and confirming the applicant’s identity to ensure compliance with legal and security standards. The official Police Clearance Certificate, issued by the Ministry of Justice, is the primary document confirming whether an individual has a criminal record in Cambodia. The aforesaid certificate is commonly required for visa applications, employment, and immigration purposes. Applicants must submit personal information such as their full name, date of birth, any previous names, and proof of residence through a letter from the local commune (Sangkat) office, along with a completed application form and identification documents like a passport bio page. The process mandates the applicant’s consent and adherence to Cambodian data privacy laws.
We can help you! Contact us!
Benefits
In Cambodia, mandatory employee benefits are primarily regulated by labor law and encompass several key provisions. These include minimum wage, standard working hours and paid leaves.
Furthermore, the National Social Security Fund (NSSF) requires contributions from both employers and employees, providing basic healthcare coverage as well as pension benefits covering retirement, disability, and survivors’ pensions. Seniority bonuses, typically between $2 and $11 monthly after one year of employment, are also common and generally expected by workers.
Beyond these statutory requirements, many employers offer supplemental benefits such as healthcare allowances or private insurance to supplement NSSF coverage, housing and transportation allowances, attendance and performance bonuses, meal allowances, home office stipends, and extra paid leave such as paternity leave. These benefits are particularly prevalent in competitive sectors like banking, telecommunications, and manufacturing, where employers tailor offerings to meet employee expectations and enhance workforce retention.
Private health insurance
Private health insurance in Cambodia is designed to cover healthcare costs not fully covered by the National Social Security Fund (NSSF).
Team APAC providers
We offers multiple health insurance options, allowing customers to choose between International Health Insurance, providing worldwide coverage on a pay-and-claim basis, or a Local Health Insurance, which offers a cashless access to treatment within the provider’s network. We offer the flexibility to cover either the employee only (single option) or the employee and their dependents (family option), tailored to meet the specific needs of your team.
- SafetyWing
- Allianz
Mandatory benefits
Cambodian labor law mandates several key employee benefits, including paid annual leave, public holidays, maternity leave, and paid sick leave
Both employers and employees must contribute to the NSSF, which covers occupational risks, healthcare, and pensions, ensuring comprehensive statutory protections for workers in Cambodia.
Mandatory benefits in Cambodia
Statutory employee benefits mandated by Cambodian law are:
- Paid Annual Leave
- Public Holidays
- Maternity Leave
- Paternity Leave
- Sick Leave
- Minimum Wage
- Seniority Indemnity – Upon termination, employees receive seniority indemnity calculated based on their length of service, replacing the former severance pay system.
- National Social Security Fund (NSSF) Contributions
Working hours
By law, normal working time may not exceed eight hours per day and 48 hours per week.
Working hours per day
The standard workday is 8 hours.
Working hours per week
The standard workweek is 48 hours.
Overtime pay
Overtime pay ranges from 150% to 200% of the regular wage depending on timing and conditions.
Leave
In Cambodia, employee leave entitlements are regulated by labor law. These are the paid annual leaves and public holidays. Other leave categories include sick leave, maternity leave, parental leave, and special leave for family-related events.
Annual leave
Cambodian employees accrue 1.5 days of paid vacation for each month of employment with a company, up to a maximum of 18 days per year. Additionally, for every three years of continuous service, they receive an extra day of leave per year.
Sick leave
Employees can take paid sick leave up to six days per month for a maximum of six months, contingent on a medical certificate. Payment during sick leave may involve contributions from both the employer and the NSSF.
Parental leave
Currently, there is no law requiring employers to provide parental leave.
Maternity leave
Female employees qualify for 90 days of maternity leave paid at 50% of their normal salary. Under the National Social Security Fund (NSSF), a portion of this salary is reimbursed if eligibility requirements are met.
Paternity leave
While not universally required by labor law, some employers or collective agreements provide one day of paid paternity leave. Male employees may also use annual leave for paternity purposes.
Long service leave
Cambodia does not have a statutory “long service leave” as a distinct category. However, employees are entitled to accrue additional annual leave days based on their tenure. After one year of service, employees are granted 18 days of paid annual leave. For each subsequent three years of continuous employment, an additional leave day is awarded.
Compassionate leave
Cambodia does provide for certain types of compassionate leave. Employees are entitled to seven days of unpaid bereavement leave in the event of the death of an immediate family member (father, mother, spouse, or child).
Family & domestic violence leave
Currently, Cambodia’s Law on the Prevention of Domestic Violence and the Protection of Victims (2005) does not explicitly provide for family and domestic violence leave as a workplace entitlement.
Termination
In Cambodia, employee termination is primarily governed by the Labor Law and recent Ministry of Labor notifications, which establish a structured legal framework to ensure fair treatment and compliance. This legal framework aims to balance employer operational needs with employee protections, reducing wrongful dismissal claims and ensuring transparency in employment contract termination.
Termination process
The termination process mandates written notice or pay in lieu of notice, a fair investigation for misconduct cases, and issuance of employment certificates upon termination. Employers are also required to notify the Ministry of Labor and Vocational Training within 15 days of the employee’s departure.
Termination reasons
Termination can occur for various reasons such as redundancy, misconduct, poor performance, or force majeure, each requiring proper documentation and adherence to due process to avoid disputes.
Notice period
Employers must provide notice periods based on the employee’s length of service: 7 days for less than 6 months, 15 days for 6 months to 2 years, and 1 month for over 2 years, unless termination is due to serious misconduct, which permits immediate dismissal without notice.
Severance Pay
Compensation obligations differ depending on the contract type. For fixed-duration contracts terminated without valid cause, employers must pay unpaid wages, unused leave, severance of at least 5% of wages during the contract, and damages equivalent to wages for the remaining contract period. For unspecified-duration contracts, compensation includes unpaid wages, unused leave, notice pay if notice is not given, seniority indemnity, and damages equal to seniority payments received.
In cases of serious misconduct, compensation is limited to unpaid wages and unused leave only.
Probation period
In Cambodia, the length of the probationary period depends on the type of employee. For regular employees, the probationary period can last up to three months. Specialized or skilled employees typically have a probationary period of up to two or three months. For non-specialized or unskilled employees, the probationary period is generally shorter, lasting up to one month.
Probation Period days
- Regular employee – up to 3 months probation period
- Specialized/ skilled employee – up to 2-3 months probation period
- Non-specialized/ unskilled employee – up to 1 month probation period
