Your guide to payroll in Cambodia 

Employers in Cambodia should have a thorough understanding of payroll to stay compliant with local laws and other financial requirements. 

Payroll in Cambodia is often processed on the last day of the month, with contributions to social security and withholding of salary tax.

There is a defined set of labor laws in Cambodia that govern all aspects of payments, including timelines for payment, minimum wages to which employees are entitled, deductions, and other tax-related requirements.  

This article provides a comprehensive guide on Cambodia payroll processing. It also throws light on how partnering with an Employer of Record, like Payoneer Workforce Management, can help streamline the process. Read on to know how. 

Cambodia payroll: Wages and other payments

Have a look at how employees in Cambodia are paid remuneration under payroll while maintaining adherence to the country’s labor laws. 

Payroll cycle in Cambodia

The payroll cycle in Cambodia may differ based on the employment contracts. However, typically, employers should pay employees on the 15th and the last day of the month, in Cambodian riel (KHR) or USD. 

Depending on the contract, some employees are paid their wages at least twice a month. 

Minimum wages

Employees in Cambodia shall be entitled to a minimum wage of 204 USD. Fixing a minimum wage in Cambodia ensures that all workers can enjoy a decent standard of living and live a dignified life. 

Overtime pay

In Cambodia, the normal working hours are 8 hours per day. In case of urgency of work, you may ask your employees to work overtime, which should not exceed 2 hours per day.

You are also obliged to pay overtime hours at a rate 50% higher than the normal working hours. If employees have to engage in work at night or during their weekly time off, they shall be paid 100% more than what they are paid during normal working hours. 

Sick pay

Employees in Cambodia are entitled to paid sick leave of 7 days. If the employee is a member of the National Social Security Fund (NSSF) and is absent from work due to illness, accident, or maternity for more than 7 days, they have to furnish a prescription to the employer. 

Maternity pay

Employees get maternity leave in Cambodia for 90 days. During this period, employers shall pay employees 50% of their wages. 

Paternity pay

Organizations in Cambodia are entitled to a paid paternity leave of 7 days. 

Severance pay

When employees are terminated without a valid cause, employers have to pay them severance pay. This acts as a financial cushion to help the employee during the transition period. 

The amount of severance pay is different for fixed-term employees and indefinite-term employees. 

Payroll in Cambodia: Contributions and deductions

Employers have to take care of the taxes and other contributions as mandated by the government of Cambodia. 

Salary tax in Cambodia 

Just like in Thailand, employees working in Cambodia have to pay salary tax in Cambodia. It is based on their personal income.

Cambodia payroll compliance best practices

Payroll management in Cambodia is a crucial task and requires attention to detail, especially when organizations are hiring internationally. Some of the best practices include: 

• Employers should remain updated with the local regulations related to tax, labor laws, and other tax requirements. 
• They should avoid employee misclassification to avoid complications related to payroll processing and tax complications. 
• Employers must maintain an accurate and detailed payroll record to maintain transparency.
• They should comply with the statutory employee benefits and entitlements for employees in the country. 

Organizations should leverage EOR solutions like Payoneer Workforce Management to streamline onboarding, payroll processing, and compliance. 

Your options for payroll services in Cambodia

Employers in Cambodia can engage talent and pay them in the following three ways: 

1. By setting up a local entity, Employers can set up a local entity and function as a normal business in Cambodia. This, however, is time-consuming and not feasible for small companies that are looking forward to hiring across many different countries. 
2. By hiring independent contractors, Businesses can engage them for project-based tasks. However, they should remain careful about misclassifying employees, as it may lead to penalties. This helps minimize the employment costs in Cambodia. 
3. By engaging talent through an EOR like Payoneer Workforce Management, you can streamline the onboarding of employees, prepare employment contracts, and payroll compliance in Cambodia while assisting you in taking care of the taxes, leave policies, and so on. 

Handling payroll in Cambodia, especially for employees in diverse roles, can quickly become a demanding task.An EOR solution like Payoneer Workforce Management can help bring clarity and efficiency by managing payroll processes locally and reducing the administrative burden.

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