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Global Payroll Team
Written by Global Payroll Team
Last updated May 1, 2026
Expert Reviewed
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Mercans offers complete payroll, PEO and HR services in Cambodia

Cambodia remains an attractive destination for foreign investment thanks to its open investment framework, young workforce and continued growth in manufacturing, services, construction, tourism and agriculture. Key sectors include garments and travel goods manufacturing, tourism, construction, real estate, agriculture and light industry. The country continues to promote business expansion through investment incentives and relatively open foreign ownership rules in most sectors.

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Doing Business in Cambodia

Business is supported in Cambodia through a generally pro-investment environment. Foreign investors can usually hold 100% ownership in many sectors, benefit from relatively liberal foreign exchange rules and access sector-specific incentives under the Law on Investment. Businesses should still assess local licensing, labor compliance, land use restrictions and immigration requirements carefully when entering the market.

Entity Registration and Incorporation Requirements

Setting up a new business or expanding an existing one in Cambodia is straightforward. Choose how your company operates from a range of entity types that suit your individual circumstance.

Banking

Banking Hours: 8:00 am to 4:00 pm from Monday to Saturday.

Working Week

The normal working week in Cambodia is generally 48 hours, typically spread over 6 days.

Labor Law

Employment in Cambodia is governed primarily by the Labor Law and related regulations. The framework covers contracts, wages, working time, leave, termination, foreign workers and social security obligations.

Main Industries

Garments and travel goods, tourism, construction, agriculture, food processing, light manufacturing

GDP Growth

6.0%

Dates & Numbers

dd/mm/yyyy

Official State Name

Kingdom of Cambodia

Population

17.28 million

Capital

Phnom Penh

Major Languages

Khmer

Currency

Cambodian Riel

Internet Domain

.kh

International Dialing Code

+855

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Cambodia
Phnom Penh, KH
9:19 pm, May 4, 2026
30°C
clear sky
59 %
Wind Gust: 8 mph
Clouds: 9%
Sunrise: 5:40 am
Sunset: 6:13 pm

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Payroll

The statutory minimum wage in Cambodia is set specifically for workers and employees in the textile, garment, footwear, travel goods and bag manufacturing sectors. For 2026, that sectoral minimum wage is USD 210 per month.

It is acceptable to provide employees with online payslips, provided payroll documentation requirements are met.

Payslip

Payroll and related employment records should be retained in line with applicable labor, tax and social security requirements.

Reports

Employees are entitled to receive paid annual leave at the rate of 1.5 days per month of continuous service, equivalent to 18 days per year before seniority increases.

Annual Leave

Sick leave is subject to labor law protections, medical certification and workplace rules. Official sick leave is not counted as annual leave.

Sick Leave

Female employees are entitled to 90 days of maternity leave at 50% pay if eligibility conditions are met. There is no general statutory paternity leave entitlement.

Maternity & Paternity Leave

Employees must be provided with prior notice of termination ranging from 7 days to 3 months depending on length of service.

Employee Termination

There are no provisions mandated by law regarding the 13th month salary.

13th month salary

210 USD per month

Minimum Wage

Overtime payment is generally calculated at 1.5x the employee’s ordinary rate of pay and may rise to 2x for night work or work on weekly rest days and public holidays.

Overtime

Employees on unfixed duration contracts may be entitled to dismissal indemnity, while fixed duration contracts generally require severance at contract end.

Severance Pay

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Tax and Social Security

Cambodia does not yet impose a standalone personal income tax in the ordinary employment sense, but it does apply Tax on Salary to employment income. Employers are also required to register and contribute to the National Social Security Fund for applicable schemes, including occupational risk, health care and pension.

Tax

Cambodia generally applies a 20% corporate income tax rate, while Tax on Salary is levied on employment income at progressive rates up to 20%. The standard VAT rate is 10%.

20%

Corporate Income Tax

20%

Personal Income Tax

10%

Sales Tax

10%

VAT

Social Security

Employers must register eligible enterprises and workers with the NSSF and make contributions for occupational risk, health care and pension in accordance with the applicable rules and contributory wage caps.

7.4%

Social Security Rate

5.4%

Social Security Rate for Employers

2%

Social Security Rate for Employees

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Employment Law

Employment in Cambodia is governed by the Constitution, the Civil Code, the Labor Law and related labor regulations. Employers should ensure compliance with working time, leave, wage payment, contract form, termination and foreign worker requirements.

Employment Agreement

The employment contract is the primary means through which the employment relationship is governed. Cambodian law recognizes fixed duration contracts and unfixed duration contracts.

Working condition

Normal working time may not generally exceed 8 hours per day and 48 hours per week. Overtime is regulated and should be compensated at statutory premium rates.

Leaves

Employees are entitled to paid annual leave and official public holidays. Special leave of up to 7 days may also be granted for events directly affecting the worker’s immediate family.

Employment termination

Termination rules vary depending on whether the contract is fixed or unfixed duration. Notice, severance or dismissal indemnity and final wage settlement must be assessed based on the contract type and reason for termination.

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7 days

Minimum notice period for terminating an employee

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22 days

Total number of public holidays

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48

Working hours per week

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7 days

Total number of days for Compassionate & Bereavement Leave

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Immigration

Foreign workers enjoy the same core labor protections as local employees, but employers must also ensure immigration and labor compliance. Foreign employees generally need the appropriate E-class visa extension together with a work permit and employment card issued by the Ministry of Labour and Vocational Training.

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Residency permits

Foreign nationals intending to work in Cambodia typically enter on an ordinary E visa and then obtain the relevant extension of stay, commonly the EB extension, together with a valid work permit and employment card. Employers must also secure the annual foreign employee quota where applicable.

Work Permit Validity

1 year

Required Documents

Valid passport

Appropriate E-class visa and relevant extension of stay

Work permit and employment card application through the MLVT system

Employer corporate registration documents

Foreign employee quota approval where applicable

Employment confirmation or supporting job documents

Health certificate or other supporting documents where required

Current residential address and identification details

Compliant, reliable, error-free and touchless payroll in Cambodia

Build the best team and hire top talent compliantly in Cambodia. Get in touch with Cambodia payroll outsourcing & PEO specialists for a free consultation!

This document was prepared for informational purposes only. As local laws & regulations keeps on changing. Please consult your tax & legal advisors as well.
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    FAQs

    What is an Employer of Record (EOR) in Cambodia and how does it work for foreign companies?

    An Employer of Record (EOR) in Cambodia legally employs staff on behalf of foreign companies. It manages employment contracts, payroll, taxes, social security, and compliance with local labor laws, allowing companies to hire employees quickly without establishing a local legal entity.

    Why should businesses use an EOR instead of setting up a local entity in Cambodia?

    Using an EOR avoids the time and costs of setting up a local company. It provides fast market entry, reduces administrative work, ensures legal and tax compliance, and is ideal for businesses testing the Cambodian market or hiring a small team.

    How does payroll outsourcing in Cambodia ensure compliance with tax and labor laws?

    Payroll outsourcing ensures accurate salary processing, tax filings, and social security contributions according to Cambodian law. It reduces compliance risks, avoids penalties, and provides expertise on local labor and tax regulations.

    Can an Employer of Record in Cambodia hire employees and manage work permits for international companies?

    Yes, an EOR can legally hire employees for foreign companies and manage work permits. It handles HR operations, payroll, and compliance with local labor and immigration laws, enabling smooth operations without a local entity.

    What are the key benefits of using EOR and payroll services in Cambodia for global expansion?

    EOR and payroll services enable faster hiring, local compliance, reduced legal and financial risk, and access to market expertise. They allow companies to expand into Cambodia efficiently while focusing on business growth.

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