Payroll Information

Payroll Cycle

The standard payroll cycle in Cambodia is monthly, with paydays typically falling on the 7th or 8th of the following month. However, some companies may have biweekly or semi-monthly pay cycles.

‍

Employment Law

Employment in Cambodia is governed by the Labor Law of 1997, which outlines the rights and obligations of both employers and employees. Some key provisions of the law include:

• Minimum Wage: The minimum wage for workers in the garment and footwear sector is set by the government, while the minimum wage for other sectors is negotiated by employers and employees. The minimum wage in Cambodia for 2023 is set at 3,320,000 Riel per month (approximately USD 820).
• Working Hours: The standard working week in Cambodia is 48 hours, with a maximum of 8 hours per day. Overtime must be paid for work beyond this limit.
• Annual Leave: Employees are entitled to 18 days of paid annual leave after 1 year of continuous employment.
• Sick Leave: Employees are entitled to paid sick leave for up to 7 days per year.
• Maternity Leave: Female employees are entitled to 90 days of paid maternity leave.
• Termination: Employers must have a valid reason to terminate an employee and must provide notice or severance pay in accordance with the Labor Law.

‍

Employment Contract

Employment contracts are required for all employees in Cambodia and must be in writing. The contract should include details such as job title, salary, working hours, and any other benefits or obligations. The contract must also comply with the Labor Law and any other relevant regulations. Probationary periods of up to 3 months are allowed, during which time either party may terminate the employment without notice or severance pay. After the probationary period, termination must be in accordance with the Labor Law.

‍

Probation Period / Trial Period

The probationary period in Cambodia can last up to 3 months. During this time, either the employer or the employee may terminate the employment relationship without notice or severance pay.

‍

Working Hours

The standard working week in Cambodia is 48 hours, with a maximum of 8 hours per day. The work schedule may be divided over 6 days or 5.5 days per week, depending on the employer's preference. Employees are entitled to at least 1 day off per week.

‍

Overtime

Overtime work is permitted in Cambodia, but it must be paid at a rate of at least 1.5 times the regular hourly rate. Overtime work is limited to a maximum of 2 hours per day and must not exceed 200 hours per year, except in certain industries where the limit is 300 hours per year.

‍

Bonus

Employers may choose to offer bonuses to their employees, but there is no legal requirement to do so. If bonuses are offered, they must be paid in accordance with the terms of the employment contract.

‍

Termination

Employers must have a valid reason to terminate an employee, such as poor performance, misconduct, or redundancy. The employer must provide notice or severance pay in accordance with the Labor Law. The amount of notice or severance pay depends on the length of service and the reason for termination.

‍

Notice Period

The notice period required for termination depends on the length of service and the reason for termination. For example, if an employee is terminated for poor performance, the employer must provide at least 7 days' notice for employees with less than 6 months of service, 15 days' notice for employees with 6 to 12 months of service, and 30 days' notice for employees with more than 1 year of service.

‍

Redundancy / Severance Pay

Employers may need to make redundancies if there is a genuine business need to do so. The employer must provide notice or severance pay in accordance with the Labor Law. The amount of notice or severance pay depends on the length of service and the reason for termination. Employers are also required to consult with the affected employees and their representatives before making redundancies.

‍

Maternity Leaves

Female employees are entitled to 90 days of paid maternity leave. The employer is required to continue paying the employee's regular salary during the maternity leave period.

‍

Paternity Leave

Male employees are entitled to 3 days of paid paternity leave. The employer is required to continue paying the employee's regular salary during the paternity leave period.

‍

Parental Leaves

Cambodia does not have a specific parental leave policy. However, the Labor Law provides for unpaid leave for employees who need to care for a child or a family member who is sick or injured.

‍

Vacation and Annual Leaves

Employees are entitled to 18 days of paid annual leave after one year of continuous employment. If the employee has worked for less than 1 year, they are entitled to 1.5 days of paid annual leave per month of service.

‍

Sick Leaves

Employees are entitled to paid sick leave for up to 7 days per year. If an employee is sick for more than 7 days, they may be required to provide a medical certificate.

‍

Other Leaves

Cambodia does not have specific policies for other types of leave such as bereavement leave, personal leave, or compassionate leave. However, employers may choose to offer such leave to their employees as part of their benefits package.

‍

Other Benefits

Employees are entitled to have study allowance, family health care, child education allowance, accommodation allowance, monthly mobile allowance, and monthly transportation allowance.

‍

Holidays

Cambodia has 28 public holidays per year, including both national and religious holidays. If a public holiday falls on a day when the employee would normally work, the employer is required to provide a paid day off or pay the employee at a rate of 200% of their regular hourly rate.

‍

Taxation

Personal Income Tax

In Cambodia, personal income tax is levied on individuals based on their annual income. The tax rates are as follows:

• 0% for annual income up to KHR 1,200,000 (approximately USD 300)
• 5% for annual income between KHR 1,200,000 and KHR 2,400,000 (approximately USD 600)
• 10% for annual income between KHR 2,400,000 and KHR 3,600,000 (approximately USD 900)
• 15% for annual income between KHR 3,600,000 and KHR 4,800,000 (approximately USD 1,200)
• 20% for annual income between KHR 4,800,000 and KHR 7,200,000 (approximately USD 1,800)
• 25% for annual income between KHR 7,200,000 and KHR 12,000,000 (approximately USD 3,000)
• 30% for annual income over KHR 12,000,000 (approximately USD 3,000)

‍

Social Security

In Cambodia, social security contributions are made by both employees and employers. The current rates are as follows:

• Employees contribute 1.3% of their monthly salary to the National Social Security Fund (NSSF).
• Employers contribute 0.8% of their monthly payroll to the NSSF.

The NSSF provides coverage for employees in the event of work-related injuries, illnesses, disabilities, and death.

‍

Others

Cambodia also imposes various other taxes, including a tax on profit for companies, a tax on rental income, a tax on transfers of ownership of property, and a tax on vehicles. The rates and regulations for these taxes vary depending on the type of tax and the specific circumstances.

‍

Visas and Foreign Workers

General Information

Visa Requirements

Foreign nationals who wish to work in Cambodia must obtain a work visa, also known as an "E" visa. To be eligible for a work visa, applicants must have a valid passport with at least 6 months validity, a work permit issued by the Ministry of Labor and Vocational Training, and a medical certificate showing that they are free from communicable diseases.

‍

Application Process

The application process for a work visa in Cambodia involves several steps. First, the employer must apply for a work permit from the Ministry of Labor and Vocational Training on behalf of the employee. Once the work permit is issued, the employee can apply for a work visa at the Cambodian embassy or consulate in their home country. The application typically requires the employee to provide a passport photo, a copy of their passport, the work permit, and a visa application form. The processing time for a work visa varies depending on the embassy or consulate, but it generally takes several days to a week.

‍

Duration of Visa

A work visa in Cambodia is typically issued for a period of one year, although it may be renewed upon expiration. The visa allows the holder to stay and work in Cambodia for up to one year.

‍

Work Permit Renewal

The work permit must be renewed annually, and the employer must submit a renewal application at least one month before the expiration date. The employee must also undergo a medical examination and obtain a new medical certificate.

‍

Work Visa Extension

If a work visa holder needs to stay in Cambodia beyond the expiration date of their visa, they can apply for a visa extension at the immigration department in Cambodia. The extension may be granted for up to one year, but the applicant must provide a valid reason for the extension.

‍

Working Without a Visa

It is illegal to work in Cambodia without a valid work visa and work permit. Foreign nationals caught working illegally may be subject to fines, imprisonment, and deportation.

‍

Additional Requirements

In addition to the above requirements, foreign nationals may be required to provide other documentation or undergo additional screening, depending on their specific circumstances. It is important to check with the relevant authorities or a qualified immigration lawyer to ensure that all requirements are met.

‍