Personal income tax in Cambodia.

Understanding how salary is taxed in Cambodia is critical for both employers and employees for compliance with local laws and avoiding unexpected liabilities. The Cambodian tax system applies a progressive rate to personal income, including salaries, wages, bonuses and other forms of compensation. Employers play a key role by withholding the appropriate amount of tax on behalf of their employees and remitting it to the authorities.

This guide outlines the key rules governing salary tax in Cambodia, including who is liable, how the tax is calculated, applicable rates and common compliance requirements.

What is personal income tax in Cambodia?

Cambodia imposes a form of personal income tax known as the Tax on Salary (TOS), which applies to individuals earning income from employment.

While Cambodia does not have a personal income tax system identical to those in some other countries, TOS serves a similar function by taxing employment-related income. Taxable income in Cambodia is categorised into two groups: salary and fringe benefits.

Salary

Salary is all types of remuneration and benefits received by an employee. This includes:

• Salary and wages
• Bonuses or incentives
• Overtime
• Advance
• Other compensations

Fringe benefits

Fringe benefits are taxed separately under the Fringe Benefits Tax (FBT) regime. The benefits include:

• Private use of vehicles
• Meals and accommodation
• Utilities (water, electricity, telephone) and domestic servants
• Low-interest loans
• Education provided to an employee which is unrelated to the employee’s business activities or education provided to an employee’s minors
• Life and health insurance premiums other than those paid in respect of all employees
• Pension fund contributions that are more than 10% of the monthly salary
• Entertainment or recreation expenses
• Excessive business expenses

Who is considered a tax resident in Cambodia?

A resident taxpayer in Cambodia is an individual who meets at least one of the following conditions: they are domiciled in Cambodia, have their principal place of abode in the country or are present in Cambodia for more than 182 days (whether through a single continuous stay or multiple visits) within a tax year, which runs from 1 January to 31 December.

Individuals who do not meet these criteria are considered non-residents. Resident individuals are taxed on their worldwide salary income, including both Cambodian and foreign sources. Non-residents are only taxed on Cambodian-sourced income.

What are the personal income tax rates in Cambodia?

The Cambodian government introduced updated taxable income thresholds for 2025, which remain the current standard for 2026. Resident individuals are taxed on a progressive basis as follows:

Non-residents are taxed at a flat rate of 20% on Cambodian-sourced salary income. Fringe benefits provided by employers are also subject to tax at 20%.

Personal income tax rates for business income

Income earned from non-corporate business owners (including partnerships and sole proprietorships) is subject to individual tax rates from 0% to 20%.

Tax exemptions in Cambodia

In Cambodia, the following allowances are exempted from taxation:

• Commute expenses (between work and home)
• Social security or welfare fund
• Health insurance or life/health insurance premium, as long as the premiums are paid for all employees
• Baby care allowances or nursery expenses
• Supply of uniforms or special equipment used during the employment
• Limited indemnity for a layoff
• Redundancy payments

Personal tax deductions, filing and reliefs in Cambodia

Cambodia’s personal tax framework provides limited deductions and simplified filing requirements for employees. It also allows certain reliefs to prevent double taxation on foreign income.

Tax deductions

Residents are entitled to a monthly deduction of KHR 150,000 for each child under 14 years old or up to 25 years if the child is a full-time student at a recognised educational institution. An additional KHR 150,000 deduction is available for a dependent spouse who is not working.

Tax filing requirements

Individuals are not required to submit personal income tax returns for employment income. Instead, employers are responsible for filing monthly salary tax reports by the 20th of the following month and remitting the TOS on behalf of their employees.

Foreign tax relief

Resident taxpayers can claim tax credits on foreign-sourced salary if documentation confirming the payment of foreign tax is available. The credit allowed is the amount of foreign tax paid or the amount of salary tax on salary from all sources, whichever is lower. As of 2026, Cambodia has ratified double taxation agreements with 11 countries. Taxpayers from jurisdictions without a DTA with Cambodia cannot rely on treaty-based relief and should take independent advice on how to manage potential double taxation.

Tax considerations for digital nomads, remote workers and online businesses

Cambodia’s tax rules depend on tax residency and whether activities create a local taxable presence.

Tax residency of digital nomads and remote workers

Remote workers or digital nomads who spend more than 182 days are tax residents and are subject to TOS on their worldwide income, including foreign income. Foreign income is not automatically tax-free once residency is established.

Tax treatment for remote teams and online businesses

Foreign companies may be subject to Cambodian tax if their activities create a permanent establishment (PE). To better understand how PE is determined in Cambodia, see our corporate income tax guide. Online and SaaS businesses are taxed under standard rules if managed from Cambodia or earning Cambodian-sourced income, and may also face VAT obligations.

How freelancers and contractors are taxed in Cambodia

Freelancers and independent contractors are taxed on their business income at progressive rates from 0% to 20%. They are responsible for managing their own tax compliance if they exceed applicable thresholds. However, if freelancers and independent contractors are not registered taxpayers in Cambodia, their income may be taxable through the withholding tax mechanism. The classification between contractor and employee depends on the actual working relationship and misclassification may result in TOS obligations.

Conclusion

Understanding personal income tax in Cambodia requires a clear grasp of how the TOS system works, particularly in distinguishing between resident and non-resident obligations, the progressive tax rates and the treatment of fringe benefits. While the system is relatively straightforward for employees, given that employers handle the filing and payment, both parties need to stay informed for proper compliance and take advantage of any available exemptions or deductions. With penalties for late or incorrect filing, and specific provisions for foreign income and fringe benefits, maintaining accurate payroll practices and seeking professional advice when needed is essential for avoiding costly errors.

How Acclime can help with tax on salary obligations in Cambodia

To stay compliant with the personal income tax regulations in Cambodia and for assistance with the monthly tax on salary return, do not hesitate to contact Acclime. Our local team of tax professionals can support your business with accurate payroll processing, timely tax filings and practical advice on fringe benefit taxation and allowable exemptions.

Whether you are a foreign investor setting up operations or a local company working through regulatory updates, Acclime ensures your salary tax obligations are managed efficiently and in full compliance with Cambodian laws.