Payroll & HR requirements in Cambodia.

Cambodian employers manage multiple payroll obligations across labour law, tax regulations, and social security. Beyond base salary, you need to handle mandatory NSSF contributions, withhold income tax, provide statutory allowances, and meet compliance deadlines that vary by business structure and workforce size.

This overview covers the payroll components, obligations, and processes for employing staff in Cambodia, from calculating contributions to meeting filing deadlines.

Payroll components in Cambodia

In Cambodia, employee remuneration typically consists of several components in addition to just the base wage. Employers must structure salaries in line with local labour laws and ensure transparency through detailed payroll records.

Below is an expanded overview of the common elements included in salary packages:

Basic salary

This is the fixed monthly amount agreed upon in the employment contract and forms the foundation of an employee’s total compensation. It is used to calculate overtime, annual leave and social security contributions.

Overtime pay

Employees are entitled to additional pay for hours worked beyond the standard working time (48 hours per week). Overtime rates are regulated by law, for example, 150% of the hourly rate for regular overtime and up to 200% for work performed on nights or public holidays.

Seniority pay

Under Cambodian law, employers must provide seniority payments to employees under undetermined duration contracts (UDCs).

Eligible employees are entitled to 15 days of wages per year of service.

This benefit is paid in two instalments annually:

• 7.5 days in June
• 7.5 days in December

During the first calendar year of employment, employees who have worked continuously for one to six months are entitled to a pro-rata seniority indemnity of 7.5 days.

If an employee’s contract is terminated by the employer, they remain entitled to:

• Seven days of indemnity for the semester in which termination occurs, provided they worked for at least one month but less than six months during that period
• Any unpaid seniority indemnity accrued before 2019

However, no seniority indemnity is payable if the employee is dismissed for serious misconduct.

Bonuses

Many employers offer discretionary bonuses, especially around major Cambodian holidays such as Khmer New Year and Pchum Ben. These bonuses are not mandated by law but are common in practice and may be stipulated in internal policies or collective bargaining agreements.

Allowances

Employers often provide various allowances to supplement the basic salary. These may include:

• Transportation allowance to cover commuting expenses
• Accommodation allowance for employees working in remote or temporary locations
• Meal allowance, either in cash or as meal provisions during working hours

Some allowances may be considered taxable depending on how they are structured and reported.

Deductions

Employers must make lawful deductions from employees’ salaries, including:

• Tax on Salary (ToS): Withheld based on progressive tax brackets set by the General Department of Taxation (GDT)
• Social security contributions: Covering the health care, occupational risk and pension schemes managed by the NSSF. These contributions are shared between employer and employee.

Tax on salary (personal income tax)

Taxable income in Cambodia is categorised into two groups:

1. Salary
2. Fringe benefits

Residents are taxed at the following rates:

Non-residents are taxed at a rate of 20%.

Fringe benefits are taxed at 20%.

These rates apply to gross monthly salary, including wages, bonuses, overtime and fringe benefits.

Tax relief is available for:

• Dependent spouse: KHR 150,000/month
• Each child under 14 (or up to 25 if a full-time student): KHR 150,000/month

Employers are responsible for filing monthly salary tax reports by the 25th of the following month and remitting the TOS on behalf of their employees.

Mandatory social security contributions

Monthly contribution payments to the NSSF must be made by the 15th of the following month.

Occupational risk scheme

Employers must pay 0.8% of the assumed wage of the employee’s monthly salary before taxation. Employers are required to pay since the employee’s harm is deemed to be the employer’s responsibility as they generate jobs for employees while also creating an occupational risk.

Employees registered with the NSSF are entitled to a range of benefits if they suffer from employment-related injuries, including workplace accidents, commuting accidents and occupational diseases. All treatments must be provided through NSSF-recognised health facilities.

Healthcare Scheme

The Health Care Scheme is a form of social health insurance that provides benefits such as preventive care, medical treatment and a daily allowance during periods of absence from work due to illness or non-work-related accidents. It excludes coverage for work-related injuries and maternity leave.

The contribution rate for the Healthcare Scheme is 2.6%.

Healthcare scheme benefits

The health care package covers the following:

Pension Scheme

The pension scheme offers four types of benefits: old-age pension, disability pension, survivor pension and funeral benefits. The benefit amount depends on the member’s total contributions and contribution period.

Compulsory contributions

Employers and employees share pension contributions equally. Counting from 1 October 2022, the contribution rate will rise in phases:

• Years 1–5: 4% of monthly wages
• Years 6–10: 8%
• After year 10: 10.75%, with a further 2.75% increase every 10 years

Contributions are based on monthly wages, capped at KHR 1.2 million.

Payments must be made by the 25th of the following month. Employers seeking to pay annually must request approval from the NSSF.

Setting up payroll in Cambodia

1. Register the business and employees:
   • Register with the Ministry of Commerce and obtain a business licence
   • Register with the GDT for a tax identification number (TIN)
   • Register the business and employees with the NSSF
   • Employees must be registered within three days of starting employment with the NSSF
2. Collect and maintain employee information:
   • Full name and ID/passport number
   • Start date and contract type
   • Salary structure and benefits
   • NSSF registration number
3. Define salary components:
   • Basic salary
   • Overtime pay
   • Senior pay
   • Bonuses
   • Allowances
   • Deductions (tax and NSSF contributions)
4. Calculate taxes and contributions
   • Salary tax: 0% to 20% for residents and 20% for non-residents
   • Fringe benefits: 20%
   • Occupational risk scheme: 0.8% (employer)
   • Healthcare scheme: 1.3% employer + 1.3% employee
   • Pension: 2% employer + 2% employee
5. Process payments:
   • Salaries usually paid monthly
   • Via bank transfer or cash
   • Maintain payroll records for at least 10 years
6. Submit monthly declarations and contributions:
   • File salary tax returns by the 25th of the following month
   • Pay NSSF contributions by the 15th of the following month

Conclusion

Payroll management in Cambodia involves more than just processing monthly wages. Employers must account for a wide range of statutory requirements, including social security contributions, tax withholding and structured benefits such as seniority pay and overtime. Additional voluntary elements, such as bonuses and allowances, may also form part of an employee’s compensation package. Businesses operating in Cambodia must ensure their payroll systems are up to date with legal requirements and maintain accurate records to support compliance. With proper planning and execution, employers can establish a payroll structure that meets both legal obligations and employee expectations.

How Acclime can help with payroll and HR compliance in Cambodia

Acclime Cambodia offers complete support related to payroll administration and human resources compliance for businesses operating in Cambodia. From payroll setup to ongoing HR obligations, our team of experts can assist with everything from calculating and processing payroll in line with local regulations to ensuring compliance with statutory reporting and employer contributions.

By partnering with us, local and foreign businesses can confidently meet their payroll and HR requirements and maintain workforce compliance. Contact us to learn more about how we can support your specific needs for payroll processing and HR compliance.