Hire employees and contractors in Cambodia

Remote’s guide to employing in Cambodia.

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  • Capital city

    Phnom Penh

  • Currency

    Cambodian riel
    (, KHR)

  • Population size

    17,300,000
    (2021)

  • Languages spoken

    Khmer

  • Availability

    Remote-Owned Local Entity

    We own our own entity in the countries where we operate to shield your company from risk and provide you and your employees with the signature Remote experience.

Facts & Stats

Cambodia is one of the world’s few constitutional monarchies (with 1900 years of verifiable history). This jewel of South East Asia has a rich and tumultuous history and Cambodians are known for their friendliness, kindness, and patience – traits which are synonymous with the country’s dominant Buddhism religion.

The country is famous for the Angkor Wat temple complex which draws around 2.6 million tourists annually as well as the mystical Mekong River Delta. Cambodia also boasts a patchwork of pristine rainforest dotted with a diverse range of over 8000 plant species.

Cambodians tend to value punctuality and may be frustrated by lateness. Often seniority is held in very high regard and those with the most experience in an organization tend to lead meetings. 

Cambodia is a growing economy powered by an $8 billion textile industry that is globally competitive, however more knowledge workers are starting to emerge from the country’s educational institutions.

Map of Cambodia
  • Capital city

    Phnom Penh

  • Currency

    Cambodian riel
    (, KHR)

  • Languages spoken

    Khmer

  • Population size

    17,300,000 (2021)

  • Ease of doing business

    Medium

  • Cost of living index

    47.91 (2021)

  • Payroll frequency

    Monthly

  • VAT - standard rate

    10%

  • GDP - real growth rate

    -5.3% (2020)

Grow your team in Cambodia with Remote

To employ Cambodian talent, companies must own a local legal entity in Cambodia or work with a global employment solution provider like Remote. Managing payroll, benefits, taxes, and compliance in Cambodia can get complicated, especially without established local relationships. 

Remote’s EOR services make it easy for your company to employ and pay workers in Cambodia quickly, efficiently, and in full compliance with all applicable labor laws. We take on the responsibility of employing and paying your team so you can focus on hiring great talent and growing your business.

Risks
of misclassification

Like many other countries, Cambodia treats self-employed individuals or contractors and full-time workers differently and there are risks associated with contractor misclassification. Remote’s team of employment experts can help you minimize risk and simplify compliance with local Cambodian regulations.

Employing in Cambodia

Workers' rights in Cambodia are protected by:

  • the Cambodian Constitution,
  • the Civil Code,
  • The Social Security Law of 2019
  • the Labor Code of 1997 (amended three times so far), and
  • Regulations passed by the Cambodian government and the Ministry of Labor and Vocational Training (MLVT)

— all of which guarantee equal pay for equal work and protections against discrimination based on age, religion, gender, and race.

Common questions that could come up during the hiring process include the minimum wage, overtime rates, and guaranteed paid time off. Remote can help you offer a complete, competitive, and compliant benefits package to your employees in Cambodia.

Public holidays

Below are national public holidays applicable for all regions in this country. Remote customers have access to a detailed list of regional public holidays within the Remote platform. Sign up now to access all public holiday information.

Minimum wage

Cambodia's monthly minimum wage rate for regular workers is US$194. The rate for probationary workers is set at US$ 192 per month.

Cambodia law specifies that businesses must pay wages “commensurate with human dignity” — a viewpoint Remote stands behind as well. For instance, Remote employees earn a minimum of $40,000 no matter where they’re based in the world.

Seniority pay

Seniority payments are only applicable to employees with a UDC.

All employees with a UDC are entitled to receive ongoing seniority payments in an amount  equal to 15 days of their wages and other benefits per year. Employers must pay the seniority indemnity to employees as follows:

  • An additional 7.5 days worth of their wage in June of each year; and
  • An additional 7.5 days worth of their wage in December of each year.

A new employee is entitled to a full installment of the seniority payment (being equal to 7.5 days of wages and benefits) if the employee worked for at least one month in the applicable period (being from January to June, or July to December).

If an employee has an FDC, they are not entitled to seniority payments, and they will receive  severance payments.

13th month bonus

13th month pay is a common practice, but not mandatory, before the implementation of seniority payment. Some employers have decided to cancel the 13th month pay when the Ministry of Labor and Vocational Training have decided to have seniority pay as mandatory payment. Therefore, the 13th month pay depends on the company’s individual decision.

Retention bonus

The payment of a retention bonus would not contravene Cambodian law. However, the Employer should be aware that an employer has an obligation to pay employees with a UDC a seniority payment, and payment of the retention bonus will not excuse the employer from paying the seniority payments.

Onboarding time

We can help you get a new employee started in Cambodia fast. The minimum onboarding time we need is only 20 working days.

Our team ensures your employees are onboarded and paid as quickly as possible while keeping your business compliant with all local employment legislation. The minimum onboarding time begins after the employee submits all required information onto the Remote platform. The onboarding timeline is also dependent upon registration with local authorities.

For all non-nationals of the country of employment, the Right to Work assessment (if applicable) will add three extra days to the total time to onboard. There may be extra time required if we need to follow-up on the right to work assessment.

Please note, payroll cut-off dates can impact the actual first day of employment. Remote has a payroll cut-off date of the 10th of the month unless otherwise specified.

Competitive benefits package in Cambodia

At Remote, we’re obsessed with helping you craft the best possible employee experience for your team. We are leading the way in practicing “fair equity,” which means making sure employees everywhere have access to both the required and supplemental benefits they need to thrive (and that will allow you to attract the best local talent).

Our benefits packages in Cambodia are tailored to fulfill the local needs of your employees. Typically, our packages contain some or all of the following benefits:

  • Health Insurance
  • Dental Insurance
  • Vision Insurance
  • Mental Health Support
  • Pension or 401(K)
  • Life and Disability Insurance

Calculate the cost to hire an employee
in Cambodia

Taxes in Cambodia

Learn how employment taxes affect your payroll and your employees’ paychecks in Cambodia. All employment taxes and payroll contributions have been paid by the employer since 2018.

  • Employer

      • 2.6%: Health Insurance
      • 0.8%: National Social Security Fund (Maximum 1,200,000 KHR)

Types of leave

Paid time off

Cambodian employees earn 1.5 days of paid vacation for every month they’re employed at a company, capped at 18 days off per year.

Workers earn an extra day off every three years and longer annual vacations can be negotiated collectively.

Public holidays

Cambodia observes 15 national public holidays for 2022 which will last 21 days. Any public holiday that falls on a Sunday automatically extends until the next working day.

Sick leave

Sick employees are entitled to six months of sick leave, with their full salary for the first month, 60% of their normal wages for the next two months, and no further benefits for the remaining three months.

Maternity leave

Female employees are entitled to 90 days of job-protected, paid maternity leave (with benefits equal to 50% of their normal salary) and two paid nursing breaks of 30 minutes each until their child turns 12 months.

Paternity/Parental leave

Cambodia’s employment law doesn’t mention any provisions for paternity leave. Workers are allowed a KHR 150,000 ($36.94) tax deduction for dependent minors (up to age 14, or 25 if the minor is still schooling), and a dependent spouse.

Bereavement leave

An employee is entitled to seven days of unpaid leave in the event of the death of an immediate family member.

Marriage leave

Employees who are getting married can apply for seven unpaid days off.

Employment termination

Termination process

Fixed Duration Contracts: Cambodian Labor Law recognizes three grounds for terminating a fixed duration contract before the end date without a severance payment:

  • Mutual agreement - A termination by mutual agreement between the employee and the employer must be made in writing. Prior notice is not required.
  • Serious misconduct - An employee can be terminated immediately if the employee commits an act of serious misconduct. The statutory deadline for employment termination on grounds of serious misconduct is seven days from the time the employer became aware of the employee's misconduct. Prior notice is not required.
  • Force majeure - An unforeseen event of force majeure (like a flood or an earthquake) that prevents the worker from fulfilling their obligations under the FDC. Prior notice is not required in this instance.

If one of the above reasons do not apply to the termination, the employer is legally obligated to pay severance to the employee on termination.

Undetermined Duration Contracts (UDC): Colombian employment law recognizes two grounds for terminating a UDC without notice and without payment of damages:

  • Serious misconduct: An employee can be terminated immediately if the employee commits an act of serious misconduct. Termination for this reason must take place within seven days from the time the employer became aware of the employee's misconduct. Prior notice is not required.
  • Force majeure: In the event of an uncontrollable situation (like a natural disaster) which prevents a worker from fulfilling their obligations under the UDC, the agreement can be terminated without prior notice.

Otherwise, a UDC can be terminated by either party provided:

  • Due notice of the termination is given in writing and the employer has a valid reason for terminating the employee (examples includes deficiencies in the employee’s aptitude or behavior, or business operation requirements of the employer) and the employer will not have to pay damages in this case
  • If the employer does not have a valid reason for terminating the employee, the employer can still terminate the employee so long as the employer pays applicable damages required by Cambodian law outlined below.

Notice period

The notice period varies based on the duration of employment as well as the type of employment contract.

  • Fixed Duration Contract (FDC) - FDCs cannot be terminated prior to the expiration date (unless the employer wants to pay out for the entire period of the contract), and the below notice periods relate to giving the employee notice that the contract will not be renewed and will terminate.
  • 6 months or less: no notice required
  • More than 6 months 10 days
  • More than one year: 15 days
  • Undetermined Duration Contract (UDC)
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Like stated above, payments can be made in lieu of notice and workers who have been notified of their pending termination are entitled to take two paid days off per week (during the notice period) for a job search.

Severance pay

Severance payments under Cambodian law depend on the nature of the contract between the employer and the worker and are only required if an employee is dismissed without cause.

Workers employed with a fixed duration contract are entitled to:

  • Severance Payment: A severance payment equal to at least 5% of the wages paid to the employee during the length of the contract. This is calculated by collecting the sum of the total wages, including bonuses, paid during the course of the contract. This sum is multiplied by 5% to determine the amount of the severance payment
  • Unused Annual Leave: Unpaid annual leave through to the termination date must be paid out in full
  • Other Benefits: Any other benefits agreed to between the employer and the employee in an employment contract, internal work rules, employee manual/HR handbook or collective bargaining agreement, if any.

If the employee is terminated before the expiration date of the employee's contract, the employee is also entitled to the following payment:

  • Damages: Damages for being laid off before the expiration date should equal the wages the employee would have received had they completed the original contracted term.

Probation periods

There is no compulsory obligation to provide probationary periods when engaging new employees. Many employers do choose to impose a probationary period and this is expected by Colombian employees. 

The probationary period does have some stipulations if applied:

  • cannot last longer than three months for regular employees
  • two months for specialized workers
  • one month for non-specialized workers

Whether an employee is a specialized worker or otherwise must be decided on a case-by-case basis depending on the level of professional skills required by the job in question. No prior notice is required to terminate the probationary period, either during or at the end of its intended duration.

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