Cambodia Employment Guide
Cambodia Employment Guide
Cambodia is located in Southeast Asia, bordering Thailand to the west, Laos to the north, Vietnam to the east, and facing the Gulf of Thailand and Gulf of Cambodia to the south. It has a population of approximately 17 million, and its economy is dominated by agriculture, garment manufacturing, tourism, construction, and services. Phnom Penh, the capital, serves as the political, economic, and cultural center. Cambodia’s labor laws require employment contracts to be in writing, with a standard 48-hour workweek. Employers are obligated to provide a minimum wage, social insurance, and paid leave. Dismissals must comply with legal procedures and include financial compensation for employees. Its labor relations system is gradually improving and has a certain appeal to foreign-funded enterprises, but compliance requirements still need attention in some industries.
Check recruitment costs
Currency
Cambodian Riel (KHR)
Capital
Phnom Penh
Official language
Khmer
Salary Cycle
Monthly
Our Employment Guide in Cambodia
Browse the following tags to learn all about hiring employees in Cambodia
Understanding Cambodia's 2024 Minimum Wage Regulations
For businesses expanding into Cambodia, navigating local labor laws is crucial. The current minimum wage stands at 1,069,900 Cambodian Riel (KHR) per month. It's important to note that specific sectors, particularly the garment and footwear industries, may have different negotiated rates. Employers should verify the applicable rate for their specific industry to ensure full compliance.
Taxation and Social Security Contributions for Employees
Cambodia operates a unique tax system where employees are not subject to a traditional personal income tax. Instead, a Salary Tax is levied on monthly earnings. This tax features a progressive rate structure, ensuring lower-income earners are less burdened. Social security contributions are mandatory and calculated separately from the Salary Tax.
| Annual Taxable Income (KHR) | Tax Rate | Maximum Tax Amount (KHR) |
|---|---|---|
| 0 - 1,500,000 | 0% | 0 |
| 1,500,001 - 2,000,000 | 5% | 75,000 |
| 2,000,001 - 8,500,000 | 10% | 175,000 |
| 8,500,001 - 12,500,000 | 15% | 600,000 |
| Over 12,500,000 | 20% | 1,225,000 |
Mandatory Employer Contributions and Costs
Beyond employee salaries, employers must budget for statutory contributions. These are typically calculated as a percentage of the employee's wage and amount to approximately 5.40% of the gross salary. This includes funding for pension schemes, health insurance, and occupational risk coverage.
- Pension Fund: 2% of the gross salary
- Occupational Risk Insurance: 0.80% of the gross salary
- Health Insurance: 2.60% of the gross salary
For a precise calculation of total employment costs, including potential variations, consulting with a specialized HR provider like SailGlobal is recommended to obtain a tailored quote.
Standard Working Hours and Overtime Compensation
Cambodian labor law defines a standard workweek as 40 hours, typically structured as eight hours per day from Monday to Friday. Alternative schedules, such as a six-day workweek, are permissible but must not exceed 48 hours. Overtime is strictly regulated and must be compensated at premium rates.
Overtime pay rates are as follows:
- Weekday Overtime: 150% of the standard hourly rate
- Night (10:00 PM - 5:00 AM) or Weekend Overtime: 200% of the standard hourly rate
- Regular Night Shift Work: An additional 30% premium on the base rate
- Public Holiday Work: Employees receive their standard pay plus an additional 100% of that amount
For example, a company in Phnom Penh requiring staff to work on a national holiday must budget for double the daily wage. Adhering to these regulations is essential for maintaining a positive employer brand and avoiding legal complications.
Hire easily in Cambodia
Compare employee hiring costs across over 100 countries worldwide, helping you accurately calculate labor costs. Try it now
Cost Calculator
Please select the country/region you wish to recruit from, and the calculation can be done with just a few clicks.
USD