Among the amazing ancient temples and historical sites, such as Angkor Wat, Cambodia boasts a vibrant culture. More importantly, Cambodia has also emerged as one of Southeast Asia's most compelling destinations for international hiring. A young, growing workforce, competitive labor costs, and an increasingly open economy make hiring in Cambodia attractive for both global employers and ambitious job seekers.
The country's Labor Law governs all employment relationships, covering everything from contracts and payroll in Cambodia to leave entitlements and termination procedures. Understanding these rules before you hire is essential for compliance. This guide covers key facts, contracts, taxes, benefits, working hours, leave, onboarding, and termination requirements to help American employers navigate the Cambodian market with confidence.
Key Facts About Employment in Cambodia
Information Category | Details |
Minimum Wage in Cambodia | 833,792 KHR per month. |
Standard Workweek | 48 hours per week as the general legal maximum; generally 8 hours per day. |
Payroll Frequency | Generally monthly. |
Fiscal Year | January 1 – December 31 |
Main Employment Laws | Labor Law (1997) Law on Social Security Schemes and implementing NSSF rules MLVT prakas / notices MEF/GDT tax rules Prakas on Tax on Salary No. 575 dated September 19, 2024. |
Employment Contracts in Cambodia
Employment contracts in Cambodia serve as the legal foundation for all employment relationships. Employers must carefully structure these agreements to comply with local regulations and protect both parties' interests.
Types of Employment Contracts:
- Unlimited Duration Contracts (UDC): These permanent employment arrangements have no predetermined end date and provide employees with enhanced protections, including seniority pay benefits.
- Fixed Duration Contracts (FDC): These contracts specify a predetermined end date and are commonly used for project-based or temporary positions, with a maximum duration of two years.
- Temporary Contracts: Short-term arrangements used for seasonal work or specific projects, typically lasting less than six months.
Mandatory Contract Elements:
- Full names and addresses of both employer and employee
- Job title and description of duties
- Workplace location
- Salary, allowances, and payment schedule
- Probation period (up to 3 months for regular employees; 2 months for skilled workers; 1 month for unskilled workers)
- Notice period for termination
- Hours of work and overtime arrangements
- Leave entitlements
- Reference to applicable collective bargaining agreements (if any)
For fixed-duration contracts, the contract must include a precise end date.
Payroll, Taxes, and Social Security in Cambodia
Employment law in Cambodia requires both employers and employees to contribute to the National Social Security Fund (NSSF). Below is a summary of the key obligations.
Employer Payroll Contributions
Contribution Type | Rate | Notes |
Health Insurance | 2.60% | Mandatory NSSF contribution |
Occupational Risk / Work Injury | 0.80% | Capped at 1,200,000 KHR/month |
Mandatory Pension Fund | 2.00% | Capped at 1,200,000 KHR/month |
Total Employer Cost | 5.40% |
Employee Payroll Contributions
Contribution Type | Rate |
Mandatory Pension Fund | 2.00% |
Total Employee Cost | 2.00% |
Individual Income Tax (Salary Tax)
Cambodia applies a progressive salary tax at the following monthly brackets:
Monthly Income (KHR) | Tax Rate |
0 – 1,500,000 | 0% |
1,500,001 – 2,000,000 | 5% |
2,000,001 – 8,500,000 | 10% |
8,500,001 – 12,500,000 | 15% |
Over 12,500,000 | 20% |
Compensation & Benefits in Cambodia
Benefit | Details |
Health Insurance | Mandatory via NSSF (employer contributes 2.60%) |
Private Health Insurance | Optional; commonly offered by multinational employers (e.g., Allianz plans) |
Life Insurance | Optional supplemental benefit; offered by competitive employers |
Seniority Pay (UDC workers) | 15 days of monthly salary paid twice yearly (7.5 days in June, 7.5 days in December) |
Transportation Allowance | Common discretionary benefit |
Study / Education Allowance | Offered by some employers to attract skilled workers |
Child Education Allowance | Common in larger enterprises |
Festival Bonuses | Traditional during Khmer New Year and Pchum Ben; not legally mandated |
Tax Deduction (Dependents) | KHR 150,000/month deduction per dependent child or non-working spouse |
Working Hours and Overtime in Cambodia
Category | Details |
Standard daily hours | 8 hours/day |
Standard weekly hours | 40 hours/week (up to 48 hours/week permitted) |
Maximum overtime per day | 2 hours (total daily cap: 10 hours) |
Overtime approval | Requires prior written approval from the MLVT (at least 7 days in advance) |
Overtime – normal daytime | 150% of the regular hourly wage |
Overtime – night (10 PM–5 AM) | 200% of the regular hourly wage |
Work on a weekly rest day (Sunday) | 200% of the regular hourly wage |
Work on public holidays | Regular daily wage + 100% premium per hour worked |
Night work (non-overtime, 10 PM–5 AM) | 130% of the regular hourly wage |
Meal allowance | Required for employees working overtime |
Leave and Statutory Time Off in Cambodia
Leave Type | Entitlement | Pay | Notes |
Annual Leave (40-hr week) | 15 days/year (1.25 days/month) | 100% | +1 day for every 3 years after 4 years of service |
Annual Leave (48-hr week) | 18 days/year (1.5 days/month) | 100% | Part-time leave is pro-rata |
Sick Leave | Up to 6 months | See below | Requires medical certificate |
First month | Full | 100% | — |
Months 2–3 | Partial | 60% | — |
Remaining months | Unpaid | 0% | Employer may dismiss after 6 months |
Maternity Leave | 90 days | 50% | Nursing breaks (2×30 min/day) until the child is 12 months |
Paternity Leave | Up to 7 days | Unpaid (use annual leave) | No statutory paid paternity leave |
Bereavement Leave | 7 days | Unpaid | Death of a parent, spouse, or child |
Marriage Leave | 7 days | Unpaid | One-time benefit |
Leave Carryover | Allowed | N/A | Unused statutory leave cannot be forfeited; it must carry over or be paid out at termination |
The following public holidays are observed in Cambodia:
- New Year’s Day
- Victory over Genocide Day (January 7)
- International Women’s Day
- Khmer New Year (Choul Chnam Thmey, mid-April – 3 days)
- International Labor Day
- Visak Bochea Day (Buddha’s Birthday, May – date varies)
- Royal Plowing Ceremony (May – date varies)
- King Norodom Sihamoni’s Birthday (May 14)
- Queen Mother’s Birthday (June 18)
- Constitutional Day (September 24)
- Pchum Ben Festival (October – 3 days)
- Commemoration Day of King Norodom Sihanouk (October 15)
- King’s Coronation Day (October 29)
- Independence Day (November 9)
- Water Festival (Bon Om Touk, November – 3 days)
- Peace Day (December 29)
Hiring and Onboarding Process in Cambodia
Steps to Legally Hire in Cambodia:
- Draft the employment contract in both Khmer and English, specifying all mandatory terms (job title, salary, probation period, notice period, working hours).
- Register the employee with the MLVT and the National Social Security Fund (NSSF) within the required timeframe; failure to register carries penalties.
- Collect required employee documents: National ID or passport, family book (if applicable), educational certificates, and a medical certificate.
- Set up payroll in Cambodia: Configure monthly (or bi-weekly) payroll, withhold salary tax at the correct progressive rate, and make employer NSSF contributions (5.40% of salary).
- Register for tax: Ensure the employee's salary tax withholding is set up with the General Department of Taxation.
- Onboarding timeline: In practice, the full process, from offer acceptance to first working day, typically takes 14–21 days, allowing time for document collection and government registrations.
Work Permits for Foreign Hires:
- Foreign nationals require a valid E-class business visa (initially 30 days, extendable up to 12 months at a time).
- A separate work permit and employment card are also required; these are the employer's responsibility to obtain through the MLVT.
- The standard cap on foreign workers is 10% of the workforce, though businesses unable to find qualified local candidates can apply to exceed this quota under Prakas No. 277/20.
Termination & Notice Periods in Cambodia
Terminating employment in Cambodia requires adherence to specific legal procedures and notice requirements based on the length of service. Improper termination can result in significant financial liability and legal complications.
Notice Period Requirements:
The notice period for termination depends on the employee's length of service:
- Six months or less of service: Seven days' notice required
- 6 to 24 months of service: 15 days' notice required
- 2 to 5 years of service: One month's notice required
- 5 to 10 years of service: Two months' notice required
- More than 10 years of service: Three months' notice required
Valid Reasons for Dismissal:
Employers must have legitimate grounds for termination, including poor performance, behavioral misconduct, violation of company policies, economic reasons (redundancy), or inability to perform job duties. Termination without valid cause may result in wrongful dismissal claims and financial penalties.
Severance Pay Basics:
- Fixed Duration Contract (FDC) employees: Entitled to statutory severance of 5% of total wages paid during the contract period
- Unlimited Duration Contract (UDC) employees: Receive seniority pay instead of severance, 15 days of monthly salary per year of service (up to a maximum of six months' salary and benefits)
- Calculation basis: For employees with 6 months to 1 year of service, calculate seniority payment at seven days of regular salary; for those with more than one year, calculate at 15 days per year of service
