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Employer of Record

Employer of Record (EOR) Cambodia

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Global Payroll Team
Written by Global Payroll Team
Published on September 1, 2026
Last updated September 1, 2026
Expert Reviewed

An Employer of Record (EOR) in Cambodia acts as the official employer for workers, often referred to as a Global Professional Employer Organization (Global PEO). This role encompasses a broad range of employment functions, ensuring full compliance with local labor laws and regulations, managing payroll, administering taxes, providing legally required benefits, and handling employment contracts.

Key Responsibilities of an Employer of Record (EOR) in Cambodia:
  • Ensuring employment terms are fully compliant with the Cambodian Labor Law of 1997 and its implementing Prakas.
  • Overseeing and processing local payroll, commonly run in US Dollars (USD) alongside Khmer Riel (KHR) obligations.
  • Managing registration and contributions to the National Social Security Fund (NSSF) for pension, healthcare, and occupational risk coverage.
  • Administering the twice-yearly seniority indemnity payments required for employees on Undetermined Duration Contracts.
  • Issuing compliant payslips and disbursing salary payments in accordance with Cambodian standards.

With our Employer of Record (EOR) services, expanding your business into Cambodia becomes easier and more efficient. Our solution eliminates the need for setting up a local entity, providing a seamless path to establish a legal presence in Cambodia. We ensure full legal compliance, manage payroll, protect your intellectual property, and handle work permits, so you can focus on growing your business and building your workforce in this fast-growing ASEAN economy.

Things you need to know before hiring in Cambodia

Cambodia’s 2026 Minimum Wage and Labor Law Updates

Cambodia’s National Minimum Wage Council set the 2026 minimum wage for the textile, garment, footwear, and travel-goods (TGFT) sector at USD 210 per month for regular workers and USD 208 per month for probationary workers, under Prakas 214/25 announced on 17 September 2025 and effective from 1 January 2026 — a USD 2 increase on the 2025 rate. Separately, the Ministry of Labour and Vocational Training (MLVT) issued Prakas No. 112/25 in May 2025, updating the rules on overtime work, work on paid holidays, and suspension of weekly days off. Together, these changes mean employers should reconfirm wage and overtime compliance for Cambodia-based staff at the start of each year.

Employment Contracts in Cambodia

Cambodian labor relations are governed by the Labor Law of Cambodia, promulgated in 1997 and amended since, together with implementing Prakas (ministerial regulations) issued by the MLVT. An Undetermined Duration Contract (UDC) is the default and presumed form of employment, while a Fixed Duration Contract (FDC) is treated as the exception.

Undetermined Duration Contracts (UDC)

The standard, presumed form of employment in Cambodia. A contract is treated as a UDC by default whenever it is not made in writing with a specified end date.

Fixed Duration Contracts (FDC)

Must be in writing and state a precise start and end date. An FDC term is capped at a maximum of 2 years; once the agreed period genuinely ends, continued employment converts the relationship into a UDC.

Probation Period

Up to 1 month for unskilled or non-specialized workers, up to 2 months for skilled workers, and up to 3 months for management or specialized professional roles. No notice is required to end employment during probation.

Mandatory Contract Terms

Employment contracts must identify the parties, job title and duties, workplace, wage, and, for an FDC, the exact start and end dates, among other required particulars.

Working Hours

The standard legal working week in Cambodia is 48 hours, structured as 8 hours per day. Employees are generally entitled to a weekly rest day.

Seniority Indemnity

Since the 2018–2019 back-pay reform, employees on a UDC are entitled to a seniority indemnity of 15 days’ wages (plus applicable benefits) per year of service, paid in two installments of 7.5 days each in June and December. New hires receive a pro-rated 7.5-day payment for their first partial year of service. Separately, on the expiry or non-renewal of an FDC, employees are entitled to an indemnity of at least 5% of the total wages paid during the contract term.

Key Points on Overtime

Overtime Caps
Overtime is generally capped at 2 hours per day beyond normal working hours, extendable to a maximum of 10 hours per day in emergencies or to prevent an imminent accident.
Overtime Premiums
Daytime overtime is compensated at a minimum 150% of the normal wage, and nighttime overtime at a minimum 200%. Work on the weekly rest day is paid at a minimum 200%, and work on a public holiday at a minimum 300%.
Night Work
Night work is defined as work performed between 10pm and 5am. Ordinary night-shift work (within normal hours) must be paid at a minimum of 130% of the normal hourly wage.

Termination and Severance Pay

Termination in Cambodia generally requires a valid ground and the applicable notice period, together with payment of any accrued seniority indemnity.

Notice of Termination

For UDC employees, the minimum notice period scales with seniority: 7 days for under 6 months of service, 15 days for 6 months to 2 years, 1 month for 2 to 5 years, 2 months for 5 to 10 years, and 3 months for over 10 years. No notice is required for serious misconduct, during probation, or in cases of force majeure.

Severance Pay

Beyond notice, terminated UDC employees remain entitled to their accrued seniority indemnity. FDC employees are entitled to the separate expiry indemnity of at least 5% of wages paid during the contract term, in addition to any notice due for contracts running longer than 6 months.

Protected Categories

Pregnant employees, and women within 1 year of childbirth, generally cannot be dismissed. Additional protections apply to nursing mothers, employees with disabilities, and elected employee representatives.

Compensation for Unused Leave

Any accrued but unused annual leave must be paid out on termination.

Employees vs Independent Contractors

Cambodian courts and labor inspectors apply a subordination-based test to distinguish an employment relationship from a genuine independent contractor engagement: the more control a company exercises over an individual’s schedule, methods, and day-to-day work, the more likely the relationship will be treated as employment, regardless of how the contract is labeled.

Misclassifying employees as independent contractors to avoid National Social Security Fund (NSSF) contributions and seniority indemnity obligations is a recognized enforcement risk in Cambodia, and can expose the engaging company to back contributions, back pay, and penalties.

Comparison Table: Employee vs Independent Contractor

Factor Employee Independent Contractor
Governing Law Labor Law of Cambodia (1997, as amended) General civil / commercial contract law
Control & Subordination Works under the employer’s schedule, direction, and supervision Controls own working hours and methods
Registration Registered by the employer with the NSSF Not registered as an employment relationship
Payment Structure Fixed monthly salary via payroll Paid per project, milestone, or deliverable
Statutory Benefits Entitled to paid leave, seniority indemnity, and NSSF coverage No statutory employment benefits
Misclassification Risk Not applicable High risk if the relationship shows subordination; labor inspectors actively pursue misclassified arrangements

Understanding these differences is essential for ensuring compliance and correctly determining entitlements such as leave, indemnities, and social security contributions.

Social Security in Cambodia (NSSF)

Cambodia’s National Social Security Fund (NSSF) administers three schemes for private-sector employees: Occupational Risk, Healthcare, and a Pension scheme phased in from 1 October 2022. Contributions are calculated against an NSSF contributory wage bracket rather than uncapped gross salary.

Contribution Employer Employee
Occupational Risk 0.8% —
Healthcare 2.6% —
Pension (phased in from Oct 2022) ~2% ~2%

The pension contribution rate is scheduled to step up in later phases of the scheme, and the contributory wage ceiling is subject to periodic NSSF revision — Mercans confirms the current bracket and rate for each engagement.

Payroll in Cambodia

Minimum Wage

Cambodia has no universal, economy-wide minimum wage. A statutory minimum wage applies specifically to the textile, garment, footwear, and travel-goods (TGFT) sector, set annually by the National Minimum Wage Council. For 2026, this is USD 210 per month for regular workers, plus mandatory fringe benefits stacked on top, including an attendance bonus, a transport/housing allowance, and a seniority-based bonus. Wages outside the TGFT sector are set by market negotiation, subject to the general protections of the Labor Law.

Payroll Cycle

Monthly payroll is the prevailing market practice in Cambodia, though Prakas No. 442 (2018) technically calls for wages to be paid twice a month. Salaries are commonly paid in US Dollars (USD), while the government continues to promote wider use of the Khmer Riel (KHR) in the economy. Employers must provide employees with an itemized payslip showing gross pay, deductions, and net pay, and payroll records must be retained for 10 years.

Overtime Pay

Overtime pay is provided when an employee works beyond the standard 8-hour day, subject to daily caps.

Overtime Premiums

Overtime is paid at a minimum 150% premium for daytime work and 200% for nighttime work, rising to 200% for work on a weekly rest day and 300% for work on a public holiday.

Daily Overtime Cap

Overtime is generally capped at 2 hours per day, extendable to a maximum of 10 hours per day only in emergencies or to prevent an imminent accident.

Overtime and holiday-pay rules were most recently updated by MLVT Prakas No. 112/25 in May 2025.

Mercans’ payroll capabilities

Payroll Cycle Management in Cambodia
Mercans delivers efficient, seamless payroll cycle management tailored to Cambodian requirements, including USD-denominated salary payments alongside Khmer Riel compliance obligations. We ensure that both employees and contractors are paid accurately and on time, providing a smooth and compliant payroll experience aligned with Cambodian standards.
Payroll Setup, Processing, and Administration
Mercans offers a complete range of payroll services from start to finish. Whether it’s setting up your payroll system, processing payments, or managing ongoing administration, we take care of every detail, ensuring accuracy, compliance, and efficiency so you can focus on running your business.
Statutory Filings and Payments
Navigating Cambodia’s regulatory framework can be complex, particularly around NSSF contributions and the twice-yearly seniority indemnity, but with Mercans, you’re in safe hands. We manage all statutory filings and payments, ensuring your business remains fully compliant with Cambodian tax laws and employment regulations.

Personal Income Tax in Cambodia

Cambodia applies a progressive monthly Tax on Salary (ToS) to resident employees:

  • Up to KHR 1,500,000: 0%
  • KHR 1,500,001 – 2,000,000: 5%
  • KHR 2,000,001 – 8,500,000: 10%
  • KHR 8,500,001 – 12,500,000: 15%
  • Above KHR 12,500,000: 20% (top marginal rate)

Non-resident employees are taxed at a flat 20% on Cambodia-sourced salary. Resident employees may claim a monthly dependent deduction of KHR 150,000 per qualifying child and KHR 150,000 for a non-working dependent spouse.

Cambodia Employee Hiring Cost

When hiring an employee in Cambodia, employers must budget for gross salary plus mandatory employer NSSF contributions across the Occupational Risk, Healthcare, and Pension schemes, calculated against the applicable NSSF contributory wage bracket.

Salary Details Amount (USD)
Gross Monthly Salary 500
Employer NSSF Contributions (Occupational Risk, Healthcare & Pension, capped by wage bracket) ~15–25*
Estimated Total Monthly Cost ~515–525*

*NSSF contributions are calculated against a capped contributory wage bracket rather than the full gross salary; Mercans confirms the exact bracket and contribution amount for each engagement.

Employee Benefits in Cambodia

Cambodian employees are entitled to a combination of mandatory statutory benefits and, increasingly, supplementary benefits offered at the employer’s discretion.

  • Annual Leave: 1.5 days per month of service, equal to 18 working days per year, plus 1 additional day for every 3 years of seniority with the same employer.
  • Public Holidays: Cambodia gazettes one of the highest numbers of public holidays in the world each year, including multi-day observances such as Khmer New Year (mid-April), Pchum Ben (September/October), and the Water Festival / Bon Om Touk (November), alongside Independence Day, Constitution Day, and the King’s Birthday.
  • Sick Leave: Commonly applied on a tiered basis — full pay for the first month of certified sick leave, 60% of wages for the second and third months, and unpaid for months four to six, with a medical certificate required.
  • Maternity Leave: 90 days, paid at 50% of wages where the employee has at least 1 year of seniority, plus a daily nursing break for 1 year after childbirth.
  • Special Leave: Cambodia does not mandate dedicated paid paternity leave; fathers typically draw on the general short-term special leave allowance available for family events such as marriage or bereavement.
  • Seniority Indemnity: A mandatory payment of 15 days’ wages per year of service for UDC employees, paid in two installments each June and December, as described above.
  • NSSF Coverage: Employer-funded Occupational Risk and Healthcare coverage, plus a jointly-funded Pension scheme, administered by the National Social Security Fund.
  • Sector-Specific Allowances: In the TGFT sector, mandatory fringe benefits include an attendance bonus, a transport/housing allowance, and a seniority-based bonus stacked on top of the base minimum wage.
  • Meal & Transport Allowances: Common non-mandatory benefits provided by many employers outside the TGFT sector.
  • Workplace Wellness Programs: Companies are enhancing the workplace experience with wellness initiatives, including mental health support.
  • Flexible Work Options: Employers are increasingly offering flexible or hybrid working arrangements where operationally feasible.
  • Team-Building Activities: Employers are introducing more team-building and employee engagement activities.
  • Discount Programs: Some companies offer group discounts on shopping, travel, and leisure activities.

Essential Benefits for Employees in Cambodia
  • Annual Leave: 1.5 days per month of service, equal to 18 working days per year, plus 1 additional day for every 3 years of seniority with the same employer.
  • Public Holidays: Cambodia gazettes one of the highest numbers of public holidays in the world each year, including multi-day observances such as Khmer New Year (mid-April), Pchum Ben (September/October), and the Water Festival / Bon Om Touk (November), alongside Independence Day, Constitution Day, and the King’s Birthday.
  • Sick Leave: Commonly applied on a tiered basis — full pay for the first month of certified sick leave, 60% of wages for the second and third months, and unpaid for months four to six, with a medical certificate required.
  • Maternity Leave: 90 days, paid at 50% of wages where the employee has at least 1 year of seniority, plus a daily nursing break for 1 year after childbirth.
  • Special Leave: Cambodia does not mandate dedicated paid paternity leave; fathers typically draw on the general short-term special leave allowance available for family events such as marriage or bereavement.

Additional Employee Benefits
  • Seniority Indemnity: A mandatory payment of 15 days’ wages per year of service for UDC employees, paid in two installments each June and December, as described above.
  • NSSF Coverage: Employer-funded Occupational Risk and Healthcare coverage, plus a jointly-funded Pension scheme, administered by the National Social Security Fund.
  • Sector-Specific Allowances: In the TGFT sector, mandatory fringe benefits include an attendance bonus, a transport/housing allowance, and a seniority-based bonus stacked on top of the base minimum wage.
  • Meal & Transport Allowances: Common non-mandatory benefits provided by many employers outside the TGFT sector.

Perks & Wellness Initiatives
  • Workplace Wellness Programs: Companies are enhancing the workplace experience with wellness initiatives, including mental health support.
  • Flexible Work Options: Employers are increasingly offering flexible or hybrid working arrangements where operationally feasible.
  • Team-Building Activities: Employers are introducing more team-building and employee engagement activities.
  • Discount Programs: Some companies offer group discounts on shopping, travel, and leisure activities.

Work Permit in Cambodia

Unlike free-movement arrangements seen in some other regions, all foreign nationals working in Cambodia — including other ASEAN nationals — require a Cambodian work permit.

Work Permit Requirement for All Foreign Nationals

Foreign employees must hold a Foreign Employee Work Book / Work Permit and an Employment Card issued by the Ministry of Labour and Vocational Training (MLVT), renewed annually.

Foreign Employee Quota (FEQ)

Under Prakas 277/20, the number of foreign employees a company may hire is generally capped at 10% of its total workforce, broken down as 3% for office staff, 6% for skilled labor, and 1% for unskilled labor. Employers seeking to exceed this quota require special approval, and the following year’s quota must generally be applied for by November.

Application Process (FWCMS)

Work permit and quota applications are processed through the Foreign Workers Centralized Management System (FWCMS), MLVT’s online one-stop platform, with typical processing times of around 7 to 10 business days.

Employer Sponsorship

A registered legal entity in Cambodia is required to sponsor a foreign employee’s work permit application — an EOR partner such as Mercans allows companies without a local entity to still hire and sponsor talent compliantly.

Qualified Investment Project (QIP) Status

Companies holding QIP status through the Council for the Development of Cambodia can benefit from a smoother path to work permit and quota approvals where a genuine local skills gap is demonstrated.
Understanding these pathways can streamline the hiring process, allowing employers to bring skilled talent into their Cambodia-based operations effectively.

EOR Solutions in Cambodia

EOR Solutions for Prospective Employees in Cambodia
Mercans provides efficient Employer of Record (EOR) services for businesses that have already identified their ideal candidates in Cambodia. Our comprehensive services cover the entire employee lifecycle, ensuring full compliance with Cambodian labor laws, tax regulations, and employment standards, so you can focus on your business growth without the administrative burden.
EOR + Recruitment: Streamlined Talent Acquisition
For businesses seeking assistance with talent acquisition, our EOR and recruitment solutions offer a complete, end-to-end service, helping you find, hire, and retain top talent in Cambodia while ensuring all recruitment and compliance requirements are met.
Visa Sponsorship and Global Mobility Solutions
Navigating the complexities of expatriate employment becomes straightforward with our visa sponsorship and global mobility services. Mercans ensures a smooth relocation process for your international workforce, handling all aspects of Cambodian immigration and employment laws to guarantee compliance.
AOR Services for Contractor Payments
For businesses managing contractor payments in Cambodia, Mercans offers Agent of Record (AOR) services, handling the complexities of independent contractor payments to ensure accurate, timely, and fully compliant payments while managing misclassification risk.
Converting Freelancers to Employees in Cambodia
Mercans supports businesses transitioning freelancers and contractors to full-time employees in Cambodia, ensuring a smooth, legally compliant conversion process.
HCM Integration for Enhanced Workforce Management
Integrate Mercans’ EOR services with your Human Capital Management (HCM) system for a unified, real-time approach to data exchange, compliance tracking, and payroll management in Cambodia.

Best Employer of Record Cambodia

Mercans stands out as a leading Employer of Record (EOR) provider in Cambodia for several key reasons:

  • Full Compliance with Cambodian Labor Laws: Mercans ensures strict compliance with Cambodia’s Labor Law, NSSF requirements, and seniority indemnity obligations, keeping your business aligned with local labor law and protecting you from potential legal risk.
  • Independent Operations: As a fully independent entity, Mercans operates without external affiliations, delivering reliable, customized employment services tailored to your business requirements in Cambodia.
  • Supports All Employment Types: Whether you’re hiring employees, contractors, or expatriates, Mercans offers flexible solutions across a variety of workforce models.
  • Designed for Large Enterprises: Our scalable solutions meet the demands of enterprise-level organizations, integrating with your broader global business goals.
  • Multi-Currency Payroll Management: Mercans handles multi-currency payroll, including USD and Khmer Riel obligations, simplifying salary management across multiple countries alongside Cambodia.
  • Global Network and Multi-Country Payroll Expertise: With a robust global presence, Mercans manages multi-country payroll seamlessly across ASEAN and beyond, handling local tax regulations and compliance requirements wherever your teams are based.
  • Certified Data Protection and Security Standards: Mercans adheres to stringent data protection protocols, including GDPR certification and SOC 1 & SOC 2 compliance.
  • ISO-Certified Service Quality and Security: Mercans holds ISO 20000 and ISO 27001 certifications, reflecting our commitment to excellence in IT service management and information security.
  • OWASP ASVS 3.0 Compliant: We adhere to OWASP ASVS 3.0 standards, protecting your business through secure software development and management practices.
  • Mercans HRBlizz: Our proprietary global payroll and talent management SaaS platform simplifies payroll while ensuring full compliance with local labor laws in Cambodia, backed by a team of in-country specialists.
  • G2N Nova: Our advanced gross-to-net payroll engine, available in over 100 countries, integrates with major HCM and Workforce Management systems for a unified global payroll process.

Conclusion

Mercans provides comprehensive Employer of Record (EOR) services in Cambodia, ensuring accuracy, compliance, and efficiency in managing your workforce across this fast-growing ASEAN market. Our end-to-end solutions simplify payroll, NSSF compliance, and employment processes, making us a trusted partner for businesses navigating the complexities of the Cambodian labor market. With Mercans by your side, your expansion into Cambodia will be smooth, compliant, and successful, allowing you to focus on growing your business with confidence.

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?

    An Employer of Record (EOR) in Cambodia is a third-party organization that legally employs workers on behalf of another company, handling payroll, National Social Security Fund (NSSF) contributions, seniority indemnity, tax withholding, and compliance with Cambodia’s Labor Law, without the client company needing to set up a local entity.

    Can a foreign company hire employees in Cambodia without a local entity?

    Yes. By partnering with an EOR such as Mercans, a foreign company can hire employees in Cambodia without registering a local branch or subsidiary. The EOR acts as the legal employer, managing contracts, payroll, NSSF registration, and statutory compliance on the company’s behalf.

    What currency is payroll run in for employees in Cambodia?

    Cambodia operates a dollarized, dual-currency economy. Salaries are commonly paid in US Dollars (USD), while the government continues to promote wider use of the Khmer Riel (KHR) across the economy. An EOR manages payroll compliance across both currencies as regulatory practice evolves.

    What compliance, payroll, and HR services does an EOR manage in Cambodia?

    An EOR manages drafting and executing compliant employment contracts, monthly payroll processing, NSSF registration and contributions, the twice-yearly seniority indemnity payments, Tax on Salary withholding and filing, issuing compliant payslips, and administering statutory leave and benefits in line with Cambodian labor law.

    How much does an EOR service cost in Cambodia?

    EOR pricing varies by provider and the scope of services required, and is typically charged as a flat monthly fee per employee or a percentage of payroll. Mercans provides tailored pricing based on your specific hiring needs in Cambodia.

    Is EOR suitable for expanding into Cambodia?

    Yes. EOR is well suited to companies testing the Cambodian market, hiring in the fast-growing garment, tourism, or BPO sectors, or needing to move quickly without the time and cost of setting up a local entity, while staying compliant with Cambodia’s foreign employee quota and work permit requirements.

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