Using an Employer of Record in Cambodia

Engaging and paying employees in Cambodia can be complex due to the need to comply with evolving local labor and employment laws. Employers must manage Cambodia payroll, taxes, employment agreements, and statutory benefits to remain compliant.

Using an Employer of Record (EOR) in Cambodia helps simplify this process. An EOR like Payoneer Workforce Management helps businesses manage local employment responsibilities while reducing administrative burden. 

Learn more about Payoneer Workforce Management, or read on to see how an Employer of Record in Cambodia can help your business.

How to hire employees in Cambodia

When engaging talent in Cambodia, companies have three main options.

1. Set up a local entity: This gives companies full operational control but comes with high set-up costs and ongoing obligations. Businesses must manage payroll, taxes, and benefits locally.

2. Hire independent contractors: This is best suited to short-term or project-based work and offers more flexibility. However, misclassifying employees as contractors can lead to penalties, including retroactive tax and benefit payments.

3. Engage employees through an EOR: Using an Employer of Record in Cambodia enables businesses to legally access talent without establishing a local entity. The EOR assists with managing payroll, taxes, benefits, and labor law requirements.

Payoneer Workforce Management acts as an Employer of Record in Cambodia and assists you with onboarding talent and supports mitigating risks related to contractor misclassification.

How to onboard employees in Cambodia

Onboarding employees in Cambodia involves issuing a compliant employment agreement, collecting employee documentation, setting up payroll, and enrolling employees in benefits where applicable.

The onboarding process typically includes:

• Payroll enrollment and statutory benefit setup: Add candidates to the local payroll system and complete all required registrations for mandatory benefits in line with local employment laws.
• Work equipment distribution and setup: Provide employees with the necessary devices and tools, ensuring everything is configured and ready so they can start working smoothly.
• First‑week onboarding session: Host an orientation during their initial week to walk them through company policies, onboarding activities, and key expectations for their position.
• Team and cross‑department introductions: Arrange introduction meetings that help the new employee meet their immediate team and build connections across the wider organization.

Payoneer Workforce Management enables companies to compliantly engage talent across borders through its technology platform.

Pay employees in Cambodia

Cambodia payroll must comply with local regulations relating to currency, pay schedules, statutory benefits, and payroll contributions.

Payroll basics

Employers must pay employees in Cambodian riel (KHR) or US dollars (USD). Salaries are typically paid on the 15th and on the last day of each month. 

The minimum wage in Cambodia is USD 204 per month. 

Income tax and salary tax

Cambodia does not impose the traditional income tax. Instead, employees are subject to salary tax, which is calculated based on earnings and withheld by their employer.

Social security

Employers and employees must contribute to the National Social Security Fund (NSSF). The system covers healthcare, workplace injury compensation, pensions, maternity benefits, and disability benefits.

Seniority allowance

Employees on indefinite contracts are entitled to a seniority allowance. This is paid 2 times per year and calculated as 7 days of salary for each payment period.

Payment period	Payment timing	Basis
January to June	June	Average salary over the previous 6 months
July to December	December	Average salary over the previous 6 months

Health insurance

Public health insurance is mandatory in Cambodia under the NSSF framework.

Employers may choose to offer private health insurance as an additional benefit, although it is not mandatory.

An Employer of Record in Cambodia, like Payoneer Workforce Management, offers a streamlined way to pay employees. Our unified, all-in-one platform gives you a single dashboard to manage a global workforce and enables you to pay contractors in just a few clicks.

Employment laws in Cambodia

Companies hiring in Cambodia must comply with local labor laws governing working hours, overtime, probation, and termination. 

Working hours and overtime

The standard working schedule is 8 hours per day, Monday through Friday. 

Overtime is limited to 2 hours per day and must be compensated in accordance with labor regulations.

Probation

The maximum probation period is 180 days. During probation, either party may terminate the employment contract with 7 days’ notice.

Businesses can get support to stay compliant with local labor laws by using Payoneer Workforce Management’s infrastructure. 

Minimum wage in Cambodia

As of January 2026, the minimum wage in Cambodia is USD 204 per month. This wage specifically applies to workers in the textile, garment, footwear, travel goods, and bag industries. 

It’s important to check government websites regularly for any changes to the minimum wage to stay compliant with local laws.

Employment contracts in Cambodia

Employment contracts in Cambodia can be either written or verbal. Contracts signed for a specific duration must include an exact end date and may not exceed 2 years. 

Employment contracts must include the following information:

• Wage, which must be at least equal to the guaranteed minimum wage, and frequency of payment
•  Incentives and bonuses
• Working hours
• Overtime
• Weekly time off, paid leave, vacation leave, and special leave
• Termination of labor contract (if applicable)

You can learn more about employment contracts in Cambodia on the government website. 

Payoneer Workforce Management allows you to onboard talent quickly and securely with localized contracts and payroll.

Leave policy in Cambodia

Employers in Cambodia must comply with statutory leave entitlements, including vacation time, public holidays, and parental leave.

Public holidays and vacation time

Cambodia observes 22 public holidays each year. 

Employees are entitled to 18 days of paid vacation time each year. Unused vacation time cannot be carried forward.

Parental leave

Maternity leave in Cambodia is 90 days. Fathers are entitled to 7 days of paternity leave.

Sick leave and special leave

Employees in Cambodia are entitled to:

• 7 days of paid sick leave per year. This can be extended up to 6 months in case of serious health issues with a medical certificate from a qualified doctor.
• 7 days of special leave for immediate family events, including bereavement

Work permit in Cambodia

The rules for work permits in Cambodia vary by the employee’s country of origin and the role performed. 

If engaging foreign workers in Cambodia, businesses should check the government website and resources for specific details.

Background check in Cambodia

Employers may want to conduct background checks before engaging an employee in Cambodia. These may include criminal record checks, employment history verification, education verification, and social media checks, depending on applicable regulations. 

Employers typically need the employee’s consent and must disclose the nature of the checks being performed. It’s important to check local regulations before running any background checks.

Employment termination in Cambodia

Employment termination in Cambodia must be based on valid grounds. Termination without just cause may be considered unfair dismissal and can result in legal consequences.

Valid termination scenarios

Employment may end due to the following situations:

• Employee resignation
• Mutual agreement between the employee and the employer
• Termination during probationary period
• Termination by the employer due to misconduct, performance issues, absence without leave, etc

Notice requirements

Notice periods range from 7 days to 90 days based on an employee’s length of service, as follows:

Length of service	Notice period
0 to 5 months	7 days
6 to 24 months	15 days
24 to 60 months	30 days
60 to 120 months	60 days
More than 120 months	90 days

Severance and termination benefits

Termination entitlements vary by contract type:

Contract type	Entitlement
Fixed-duration contract	5% of total wages paid over the contract
Indefinite contract	Seniority allowance

For indefinite contracts, seniority allowance is calculated as 7 days of wages and benefits and applies if the employee worked during the relevant 6-month period.

Termination rules can vary based on tenure and circumstances, so dismissals should be handled on a case-by-case basis. Many companies work with an EOR in Cambodia for support to stay compliant and reduce risk.

Company registration in Cambodia

Companies may choose to register a business in Cambodia to establish a permanent presence, access local markets, or meet long-term strategic goals. Details on registration requirements are available through the government website.

However, for many companies, using an Employer of Record in Cambodia is a quicker way to engage talent.

Payoneer Workforce Management enables compliant onboarding and engagement of talent in 160+ countries without having to set up a legal entity.

PEO in Cambodia

A Professional Employer Organization (PEO) in Cambodia can support HR and payroll functions, but requires you to have a legal entity in-country. 

On the other hand, an Employer of Record in Cambodia does not require a legal entity and instead acts as the legal employer. This often makes it the better choice for companies new to the Cambodian market.

Payoneer Workforce Management’s Employer of Record services in Cambodia

Payoneer Workforce Management helps growing companies onboard, pay, and manage employees in Cambodia without setting up a local entity. 

As your EOR in Cambodia, we offer assistance with employment contracts, benefits administration, taxes, and payroll, while you retain control over daily operations.

Book a demo to learn more about Payoneer Workforce Management.

FAQs

1) What is an Employer of Record in Cambodia?

An Employer of Record in Cambodia is a third-party organization that legally employs workers on your behalf and manages payroll, taxes, and employment contracts, so you can engage talent without a local entity.

2) How much does it cost to hire talent in Cambodia?

The employer cost is approximately 5.4% on an annual salary of USD 60,000, but it can vary depending on the employee’s salary and other local factors. Use our employee cost calculator for a detailed breakdown.

3) Why should you hire talent with an EOR in Cambodia?

An Employer of Record in Cambodia can help streamline the onboarding process. Payoneer Workforce Management allows you to pay independent contractors and employees across the globe in 70+ currencies. We offer a transparent pricing structure, so you’ll always know exactly what you’re paying.