Employer of Record (EOR) APAC – The Employer’s Playbook for Hiring Across Asia-Pacific With EOR APAC

The Asia-Pacific region spans fifteen time zones, five legal traditions, and more than a dozen distinct employment frameworks. It covers some of the world’s most advanced economies and some of its fastest-growing ones. And it offers a depth of talent and commercial opportunity that few other regions can match.

But hiring across APAC without local employment infrastructure is genuinely difficult. 

Each country has its own labour legislation, its own statutory contributions, its own approach to termination, and its own consequences for non-compliance. What is standard practice in Sydney is not applicable in Seoul. What works in Singapore will not hold up in the Philippines.

This is what the EOR APAC model is built for. Tarmack acts as your employer of record APAC partner, holding the employment contracts, running payroll in local currency, managing statutory benefits, and keeping you compliant in every market you hire in.

Employment Law Across APAC

Each country in the APAC region operates under its own distinct legal framework. The sections below cover the statutory obligations, contribution requirements, and compliance risks that matter most for foreign businesses hiring locally.

#1 Australia

Australia is one of the most comprehensively regulated employment environments in the world. The complexity comes not just from the legislation itself but from the industry-specific Awards and mandatory contribution obligations that sit on top of it.

• The Fair Work Act and Modern Awards

The Fair Work Act 2009 establishes the National Employment Standards, which set 10 minimum entitlements for all national system employees.

These include 38 ordinary weekly hours, four weeks of annual leave, 10 days of paid personal and carer’s leave, and unpaid parental leave of up to 52 weeks.

On top of the NES sit Modern Awards. There are over 100 of them, each covering a specific industry or occupation. An Award sets minimum pay rates, penalty rates, overtime rules, and allowances. Identifying the correct Award before drafting the employment contract is not optional.

• Superannuation sits outside salary entirely

Under the Superannuation Guarantee, employers must contribute 11% of ordinary time earnings into the employee’s nominated fund, paid quarterly. This is on top of salary, not included within it.

Missing a quarterly deadline triggers a Superannuation Guarantee Charge that is non-deductible and costs more than the original contribution. Treating superannuation as part of the salary package is one of the most common and consequential errors businesses make when hiring in Australia.

#2 New Zealand

New Zealand has a clear employment law framework, but its Holidays Act has generated widespread underpayment liability and remains an active compliance risk for businesses with variable-pay workforces.

• Written agreements, good faith, and leave entitlements

The Employment Relations Act 2000 requires every employee to have a written employment agreement before starting work. The Act also imposes a good faith obligation on both parties throughout the relationship.

Under the Holidays Act 2003, employees receive four weeks of annual leave, paid at the greater of ordinary weekly pay or average weekly earnings.

For employees with commission, variable bonuses, or regular overtime, average earnings are frequently higher than ordinary pay. The legal requirement is to apply whichever figure is higher. Using ordinary pay only is one of the most persistent compliance failures in New Zealand.

• Dismissal and personal grievances

Dismissal in New Zealand requires procedural fairness even where legitimate grounds exist.

Employees have 90 days from the action complained of to raise a personal grievance. The Employment Relations Authority treats both the grounds for dismissal and the process followed as equally important.

#3 India

India is mid-transition. Four consolidated Labour Codes have been passed but are being implemented state by state. Until a state enacts a Code, the corresponding legacy laws remain in force alongside the new framework.

• The four Labour Codes

The Code on Wages 2019, the Industrial Relations Code 2020, the Code on Social Security 2020, and the Occupational Safety, Health and Working Conditions Code 2020 consolidate over 40 central laws into four frameworks.

Most states have not yet enacted all four. Businesses must monitor which Codes are in force in each state where they employ people.

• Provident Fund and gratuity

Under the Employees’ Provident Fund Act, both employer and employee contribute 12% of basic wages. This applies to establishments with 20 or more employees.

Gratuity becomes payable after five years of continuous service, at 15 days of wages per completed year. It accrues from day one and must be provisioned for from the start of employment, not treated as a distant liability.

• Minimum wages by location

Minimum wages are set at both central and state level. The applicable rate is whichever is higher, and rates vary by region, skill category, and sector.

Businesses with employees in multiple cities must apply the correct local rate for each location. Applying a single national figure across all employees is one of the most common compliance errors in India.

#4 China

China’s employment law sets precise obligations and the consequences of procedural failures are automatic, not discretionary. Enforcement is consistent and penalties are material.

• The 30-day contract rule

Under the Labour Contract Law of 2008, if a written contract is not signed within one month of employment starting, the employee is automatically entitled to double their monthly salary for each month without a contract, for up to 11 months.

After 12 months without a contract, the relationship is deemed indefinite by law. This penalty applies automatically. There is no discretion involved.

• City-specific social insurance rates

China’s social insurance covers five schemes: basic pension, medical, unemployment, work-related injury, and maternity insurance. Contribution rates are set at city level, not nationally.

Shanghai, Chengdu, and Wuhan each operate different schedules. The housing provident fund adds a sixth mandatory contribution, also set locally. Every employer must apply the correct rates for the specific city where each employee is registered.

• Termination: a closed statutory list

Employees cannot be dismissed outside the grounds defined in the Labour Contract Law. Dismissal without a lawful statutory ground requires economic compensation of one month of average salary per year of service.

Courts scrutinise both the ground cited and the documentation supporting it. 

Without a documented evidence trail aligned to one of the statutory grounds, compensation is mandatory regardless of circumstances.

Tarmack manages contract execution, city-specific contribution rates, and termination procedures across all Chinese cities where our clients operate.

#5 Japan

Japan’s employment law is deeply protective of workers and carries criminal liability provisions that are unusual in employment law globally. The Work Style Reform Act of 2018 made this more acute.

• Overtime caps and criminal liability

The Work Style Reform Act of 2018 amended the Labour Standards Act to cap overtime at 45 hours per month and 360 hours per year.

Even under a special 36 Agreement, a single month may not exceed 100 hours. The average across any consecutive two-to-six month period must not exceed 80 hours. Exceeding these caps is a criminal offence for both the employer and the responsible manager.

• Work rules and mandatory leave uptake

Employers with 10 or more employees must file work rules (shugyou kisoku) with the Labour Standards Inspection Office. These must be current, correctly drafted, and filed. Outdated or unfiled work rules are a common audit finding.

Since 2019, employers must ensure employees take at least five days of their annual paid leave entitlement each year. The obligation falls on the employer to ensure this happens, not on the employee to request it.

• The five-year fixed-term conversion rule

Employees on consecutive fixed-term contracts for more than five years have a statutory right to request conversion to an indefinite contract. Businesses relying on long-term fixed-term arrangements must monitor this threshold carefully.

#6 South Korea

South Korea has introduced some of the most consequential employment legislation in the APAC region in recent years. Two laws in particular have created forms of exposure that businesses consistently underestimate.

• The 52-hour cap

Under the Labour Standards Act, the maximum working week is 52 hours: 40 ordinary hours plus 12 overtime. There is no lawful mechanism to exceed this, regardless of employee consent or agreement.

• The Serious Accident Punishment Act

The Serious Accident Punishment Act, in force since January 2022, imposes criminal liability on executives when serious workplace accidents result from inadequate safety governance.

The Act applies even where harm was not intended. Safety documentation and governance structures must be in place before any incident occurs, not assembled after.

• Mandatory severance

Severance of 30 days of average wages per year of service applies to all employees with one or more years of service. It cannot be waived. Payment must be made within 14 days of employment ending. Late payment attracts 20% annual interest on the outstanding amount.

#7 Singapore

Singapore is the most straightforward hiring environment in Southeast Asia. The main compliance pressure for foreign businesses is not employment law complexity but the work pass obligations that apply before any foreign hire can begin work.

• Fair Consideration Framework

Under the Fair Consideration Framework, employers with 10 or more employees must advertise any role on the MyCareersFuture portal for at least 14 days before submitting a work pass application for a foreign hire.

Skipping or shortening this window puts the application at risk and may trigger watchlist scrutiny, which means all future applications are subject to enhanced review.

• CPF and Employment Act coverage

CPF contribution rates are tiered by age. For employees below 55, the employer contributes 17% and the employee 20%. Rates step down for older workers. Applying a flat rate across all age groups is a recurring payroll error.

The Employment Act now covers all employees regardless of salary level, including professionals and executives previously excluded.

#8 Malaysia

Malaysia’s Employment Act 1955 was substantially amended in 2022, with changes taking effect from January 2023. Businesses that have not reviewed their contracts and payroll since then are likely non-compliant in several areas.

• What changed in 2023

The Employment Act 1955 (2022 Amendments) removed the salary threshold that previously excluded higher-earning employees from Act coverage. All employees are now covered, regardless of salary. Maternity leave was extended from 60 to 98 days.

Flexible working arrangement requests are now a statutory right. Employers must respond in writing within 60 days with reasons if refusing. The right exists regardless of whether the employer has a formal policy in place.

• EPF contribution rates

Under the Employees Provident Fund Act, employer contributions are 13% for employees earning below RM 5,000 per month and 12% above that threshold. Many businesses apply a flat rate and underpay at the lower salary band. The distinction must be applied correctly for each employee.

#9 Philippines

The Philippines has one of the strongest worker protection frameworks in Southeast Asia. Security of tenure is constitutionally protected, and the dismissal procedure is detailed and unforgiving of shortcuts.

• The two-notice rule

Under the Labour Code of the Philippines, every just cause dismissal requires a two-notice process: a written charge notice giving the employee an opportunity to respond, followed by a written decision notice after evaluation.

Procedural failures attract indemnity awards even where the substantive cause is entirely legitimate. Getting the process right matters as much as having valid grounds.

• Authorised causes and 13th month pay

Redundancy, retrenchment, and closure, the authorised causes, require 30 days written notice to both the employee and the Department of Labour and Employment.

The 13th month pay obligation applies to all rank-and-file employees who have worked at least one month in the calendar year. It must be paid in full by 24 December. It is not discretionary.

#10 Indonesia

Indonesia’s employment framework was reshaped by the Omnibus Law in 2020 and its implementing regulations in 2021. The changes to severance calculations and the religious holiday allowance create specific, date-sensitive obligations.

• Severance multipliers

Severance is no longer a flat calculation. Each reason for termination maps to a specific multiplier applied to the base formula of one month’s wages per year of service.

Mutual agreement carries a multiplier of 1. Efficiency-based dismissal carries 0.5. The reason must be correctly identified and documented before any calculation begins. Using the wrong multiplier creates liability in either direction.

• THR and BPJS obligations

Under Government Regulation No. 36 of 2021, the THR religious holiday allowance of one month’s wages must be paid at least seven days before Eid al-Fitr. Late payment triggers a 5% penalty payable to the employee in addition to the THR itself.

BPJS Ketenagakerjaan and BPJS Kesehatan contributions are mandatory for all employees, covering work accident, death, pension, old-age savings, and health insurance.

#11 Vietnam

Vietnam’s Labour Code 2019 introduced changes to fixed-term contracts that affect businesses relying on project-based or seasonal hiring. It also updated social insurance obligations that apply from the first month of employment.

Fixed-term contracts and the third-contract rule

Under the Labour Code 2019, after two consecutive fixed-term contracts, any third engagement automatically becomes an indefinite contract by operation of law. This cannot be reversed.

Advance notice for unilateral termination ranges from 30 to 180 days depending on contract type and role. Terminating without correct notice requires wages in lieu plus a separate two-month compensation payment. These are distinct obligations and cannot offset each other.

• Social insurance contributions

Compulsory social insurance covers retirement, sickness, maternity, work accident, and occupational disease. The employer contributes 17.5% and the employee 8%.

Health insurance adds 3% from the employer and 1.5% from the employee. Unemployment insurance adds 1% each. All must be registered and remitted from the first month of employment.

#12 Thailand

Thailand’s framework is moderately complex, but two specific obligations create disproportionate compliance risk: a tiered severance formula that is easy to miscalculate and work permit rules that are more restrictive than most businesses expect.

• Tiered severance

Under the Labour Protection Act B.E. 2541, severance is calculated across six service bands: 30 days for one to three years, 90 days for three to six years, 180 days for six to ten years, 240 days for ten to twenty years, and 400 days for 20 or more years.

All amounts are based on the most recent monthly wage. Using a simplified or averaged figure creates significant miscalculations for long-tenured employees.

• Work permits and Social Security Fund

Under the Foreigners’ Work Management Emergency Decree B.E. 2560, a work permit is specific to the employer, type of work, and province. Changing any one of the three requires a new permit before the employee continues working.

Social Security Fund contributions of 5% each from employer and employee are mandatory from the first month of employment.

What Tarmack Manages as Your EOR APAC Partner

Every market in this guide has its own payroll cycle, contribution rates, statutory deadlines, termination rules, and consequences for getting any of it wrong. 

For a business hiring across multiple APAC markets simultaneously, the compliance burden is substantial. For one entering the region for the first time, it can be genuinely disorienting.

Tarmack’s employer of record APAC service removes that burden entirely. We provide employment contracts drafted to the legal requirements of each country in the correct local language. 

We run payroll in local currency with all taxes, social contributions, and statutory deductions applied accurately every cycle. We manage mandatory benefit schemes including Australian superannuation, New Zealand KiwiSaver, Singapore CPF, Malaysian EPF, Indian PF, and all equivalent schemes across the region.

We handle terminations correctly, including Japan’s work rule requirements, the Philippines’ two-notice process, Indonesia’s severance multipliers and THR timing, and South Korea’s 14-day severance payment window. 

We monitor regulatory changes across every APAC market so that updates like Malaysia’s 2022 amendments or Vietnam’s Labour Code reforms are reflected in how we manage your workforce without you having to track them yourself.

Start Hiring Across APAC With Tarmack

The Asia-Pacific region offers scale, depth of talent, and commercial opportunity that few other parts of the world can match. The employment law complexity is real, specific, and actively enforced. But with the right infrastructure in place from day one, it does not have to slow you down.

Tarmack is your EOR APAC partner across every major market in the region, from Sydney to Seoul, Mumbai to Manila. We handle the compliance. You build the team. Get started.