Hiring Talent And Managing Payroll In Cambodia

Agreements

• In Cambodia, employment contracts may have fixed or unlimited periods.
• Providing a written employment contract in Khmer, the country's official language is standard procedure.
• The primary features of an employment contract are the pay and any other amounts of remuneration, benefits provided to the employee, and conditions for termination.
• Primary information in the contract should include the type of contract, passport, start date, finish date, position, salary, and other benefits, as well as a work description.
• Any provision of an employment contract that does not do so is void.
• A person must perform work, be paid, and be under another person's direction and supervision to be covered by the Labor Law.

Onboarding Process

• During the onboarding procedure in Cambodia, the following papers must be submitted:

  • Name, date of birth, and address details for every employee of the company
  • National ID Employment
  • Employment Handbook
  • Foreign employees' work permits
• One must have an employment card to work as a worker for any employer if one is of Cambodian nationality.
• Nobody may continue to employ a person who does not adhere to the requirements of an employment card.

Minimum Wage

Payroll Cycle

Annual Bonus

Health Benefits

Working Hours and Overtime

• Work hours: Normal working hours are limited to eight hours per day or 48 hours per week under the Labour Law. The Labour Law guarantees employees the right to weekly time off for a minimum of 24 straight hours and forbids companies from using the same worker for more than six days each week. Sunday typically marks the weekly vacation day.
• Break: According to a common practice in the private sector in Cambodia, employees are entitled to a one-hour lunch break after eight hours of labor. Typically, each organization or corporation has an internal regulation that states this.
• Overtime: The maximum amount of overtime every workday, in addition to the standard eight hours, is two hours. Workers are entitled to the following overtime compensation: 150% of the regular working payment rate is paid for overtime on a regular workday; 200% of the regular working pay rate will be paid for overtime work that is completed between 10:00 pm and 5:00 am and work done on a regular weekday off.

Social Security

Taxes for Employees

• Income tax paid for 0 - 1,300,000 KHR is 0%
• For KHR 1,300,001 - 2,000,000 5% tax is paid
• Those who are earning between KHR 2,000,001 - 8,500,000 have to pay 10% tax
• 15% tax needs to be paid for the income ranging between KHR 8,500,001 - 12,500,000
• For income above KHR 12,500,000, the tax is 20%.

Termination

Severance Pay

Employees or Contractors

• A person may be regarded as a full-time employee or worker under Cambodian law, depending on the type of work they do. Both are entitled to the same privileges and benefits. A person who is hired to assist an organization in exchange for payment is referred to as an employee. A laborer is a person who works for an employer under their supervision and primarily does manual labor for pay.
• An independent contractor, on the other hand, operates under an agreement wherein one party (the contractor) assumes responsibility for carrying out a certain task, and the employing party agrees to pay compensation for the successful completion of the task. Independent contractors are not subject to the hiring party's subordination and continue to enjoy their legal freedom. However, under Cambodian law, the independent contractor is not provided with any employment protections or rights.
• Full-time employees are treated differently than contractors in Cambodia, hence it is important to classify them accordingly. Misclassifying both categories can lead to fines.

Final Words