Before hiring employees in Cambodia, a company should decide which employment contract is legally appropriate, calculate statutory payroll costs and establish registration and record-keeping procedures. Hotels, restaurants, schools, NGOs, offices and retailers all need to distinguish their contractual obligations from the additional rules applying to particular industries or foreign workers.
The legal starting point is Cambodia’s Labour Law of 1997, as amended, together with implementing regulations. The International Labour Organization labour law record identifies the original law, while the ILO Employment Protection Legislation database summarises relevant amendments. These rules affect hiring from the first employee, not only after a business reaches a large headcount.
Which employment contract should Cambodian employers use?
Cambodian law distinguishes fixed-duration contracts (FDCs) from undetermined-duration contracts (UDCs). A fixed end date can be useful where work is genuinely time-limited, but the label on the document does not remove statutory restrictions. Articles 67 to 73 of the Labour Law govern fixed-duration arrangements, and Articles 74 onwards address undetermined-duration termination.
| Contract | Key characteristics | Employer decision |
|---|---|---|
| Fixed-duration contract | Must be in writing; an ordinary FDC is subject to a maximum duration of two years and applicable renewal rules. | Confirm a lawful duration, expiry, renewal and end-of-contract payment before signature. |
| Undetermined-duration contract | No agreed end date; may be written or oral, although written terms make compliance easier. | Document the role, pay, notice, seniority treatment and grounds for termination. |
| Probation | Article 68 sets maximum periods of three months for regular employees, two for specialised workers and one for non-specialised workers. | Specify the correct worker category and ensure the probation term is lawful. |
Employers should not assume that repeatedly renewing an FDC for the same continuing role avoids conversion to a UDC. The application of renewal rules has attracted legal interpretation, so businesses planning repeated extensions should assess the current rules and the actual employment history, rather than rely on a template.
A well-drafted contract should cover legal entity and employee identity, job title, responsibilities, work location, start date, contract type, gross pay, pay frequency, normal working hours, overtime authorisation, leave, probation, confidentiality and lawful exit procedures. For Khmer-speaking workers, contractual explanations and operating policies should be understandable in Khmer, with consistent versions where bilingual documentation is used.
What must an employer register before and after recruitment?
Company incorporation and labour administration are separate obligations. Under Ministry of Labour and Vocational Training (MLVT) Prakas No. 110/25 of 5 May 2025, newly established entities must obtain the applicable enterprise opening declaration through the government business registration process, then establish their Labour Automated Central Management System account within the specified timeframe. The Andersen Cambodia 2025 legislative digest describes the updated process, including the 30-day LACMS account requirement following the declaration certificate.
Businesses should check the government registration portal and LACMS before their first appointment. Employee hiring and dismissal declarations, personnel records and workplace documents may also be required. Article 21 sets the general employee-movement declaration framework, while Article 22 requires internal regulations for enterprises meeting the eight-worker threshold.
A practical onboarding file should contain the signed contract, identification details, job description, salary agreement, attendance setup, emergency information, statutory registrations and evidence that relevant workplace rules were communicated. Keep dates and versions: a contract signed retrospectively is a poor substitute for a documented appointment.
Cambodia working hours, overtime and rest days
Article 137 of the Labour Law establishes a normal ceiling of eight working hours daily and 48 weekly. Workers are also generally entitled to at least 24 consecutive hours of weekly rest. Overtime is regulated rather than simply an arrangement between a manager and employee. Under Article 139, overtime normally attracts a premium of 50% above the ordinary hourly rate, increasing to 100% above the ordinary rate for overtime during the night or weekly rest period, subject to applicable rules.
Night work has its own provisions and must not automatically be treated as ordinary overtime. For example, a hotel that schedules a regular night shift faces different calculations from a daytime employee asked to stay late. Managers should record start and finish times, authorisation, rest days and the applicable wage basis. The legal rules and working-time provisions can be checked against the International Labour Organization labour law record.
Paid annual leave, maternity leave and other absences
Under Article 166, paid annual leave generally accrues at one and a half working days per month of continuous service, equivalent to 18 days over 12 months. Article 170 provides additional leave entitlement linked to length of service. Cambodia also establishes paid public holidays through annually issued schedules, so the employer should use the actual calendar applicable to the year of work rather than assume the same dates each year.
Article 182 provides 90 days of maternity leave. Under Article 183, qualifying employees with at least one year of uninterrupted service receive employer-paid maternity benefits of half their wages and benefits. Separate NSSF maternity benefits may also apply to eligible insured employees. Employment protection around maternity, breastfeeding and an employee’s return to work must be considered when scheduling operations. The underlying provisions appear in the International Labour Organization labour law record; scheme-specific eligibility should be confirmed with the National Social Security Fund.
Sick leave, medical evidence and special leave require more careful treatment than applying a universal fixed number of fully paid sick days. The relevant Labour Law provisions, enterprise rules and applicable policies should be reviewed together. Keep clear request and approval records, particularly where absence affects shift cover.
How much is Cambodia’s minimum wage in 2026?
The nationally announced 2026 minimum wage of US$210 per month for regular workers and US$208 for probationary workers applies to the textile, garment, footwear, travel goods and bag industries under Prakas No. 214/25, effective 1 January 2026. It is not a universal monthly minimum for every office, school, NGO, hotel or restaurant. See the Andersen Cambodia summary of Prakas No. 214/25.
For 2027, the government announced US$212 for regular workers in the same covered sectors, effective 1 January 2027, according to Agence Kampuchea Presse’s September 2026 report. When setting pay outside these sectors, employers must distinguish compulsory legal thresholds from negotiated salaries and any relevant collective or sectoral requirements.
National Social Security Fund contributions employers must budget
The NSSF administers occupational risk, healthcare and pension schemes. Registration and contribution duties should be checked for the actual employer and workers concerned. The current first-phase contribution structure is generally 0.8% occupational risk and 2.6% healthcare borne by the employer, plus pension contributions of 2% from the employer and 2% from the employee. These apply to statutory contributory wage bands and ceilings, not automatically to every dollar of gross salary. See the PwC Cambodia social security summary and the National Social Security Fund.
| Contribution category | Employer share | Employee share |
|---|---|---|
| Occupational risk | 0.8% | None under the standard arrangement |
| Healthcare | 2.6% | None under the current employer-funded arrangement |
| Pension, first phase | 2% | 2% |
For budgeting, record employer contributions as a cost on top of gross pay, and treat the employee pension share as a separate payroll deduction. An employer should not calculate the total by multiplying these percentages by an unlimited salary without applying the prescribed wage brackets.
Tax on Salary and payroll deductions in Cambodia
Cambodian employers generally withhold Tax on Salary monthly. For resident employees, the tax is progressive, meaning each marginal percentage applies only to the relevant band of monthly taxable salary. Non-residents are generally subject to a flat 20% on Cambodian-source taxable salary. Benefits in kind have separate tax rules. The rates and residence treatment are detailed in the PwC Cambodia individual tax summary.
| Monthly taxable salary, KHR | Marginal resident rate |
|---|---|
| Up to 1,500,000 | 0% |
| 1,500,001 to 2,000,000 | 5% |
| 2,000,001 to 8,500,000 | 10% |
| 8,500,001 to 12,500,000 | 15% |
| Above 12,500,000 | 20% |
Payroll should reconcile contracted gross wages, overtime, allowances, taxable benefits, tax withholding, employee pension contributions and the net amount transferred. Keep documentary evidence of all entries. Article 116 also regulates wage-payment frequency: ordinary employees are generally paid at least monthly, while workers fall under different minimum frequency rules.
What happens when an employee leaves?
The answer depends heavily on contract type. For a UDC, Article 74 requires a valid dismissal reason connected to conduct, ability or operational requirements, while Article 75 sets minimum notice based on service. Termination may create additional seniority, unused leave or damage liabilities. The ILO Employment Protection Legislation database records the amendments that changed Cambodia’s seniority payment framework.
| Continuous service on a UDC | Statutory minimum notice |
|---|---|
| Less than six months | Seven days |
| Six months to two years | 15 days |
| More than two to five years | One month |
| More than five to ten years | Two months |
| More than ten years | Three months |
FDC termination before the agreed end date is more restrictive. Article 73 recognises specific routes including lawful mutual agreement, serious misconduct and force majeure; termination outside permitted grounds can result in a claim related to the remaining contract period. An ordinary FDC expiry generally carries an end-of-contract indemnity of at least 5% of wages paid during the contract unless a more favourable applicable rule exists.
For UDCs, the seniority indemnity system generally provides 15 days of wages and benefits per year, commonly paid in two instalments, subject to the relevant rules. Do not automatically add every possible end-of-service amount together. An exit calculation should start with contract classification, actual service, payments already received, the dismissal reason and the legal route used.
Hiring foreign employees and the 2027 quota deadline
Foreign employment adds both employer quota approval and individual work authorisation. Cambodia’s general foreign manpower allocation is commonly expressed as 10% relative to Cambodian employees, divided among office, skilled and unskilled positions. Special approval mechanisms exist where the standard limit is insufficient and statutory conditions are met.
MLVT Notification No. 025/26 opened applications for the 2027 foreign manpower quota from 1 September to 30 November 2026. Enterprises employing, or intending to employ, foreign workers in 2027 must address the quota process via the Foreign Workers Centralized Management System. The deadline and scope are explained in the KPMG update on the 2027 foreign manpower quota. Visa status, quota approval and an individual work permit are distinct requirements and should be checked separately.
How employers can audit a new hire before the first payroll
- Check enterprise labour registration and the correct employing legal entity.
- Choose an FDC or UDC based on the genuine role, duration and statutory rules.
- Sign consistent contracts and explain core terms in a language the employee understands.
- Record attendance and determine the lawful overtime and rest arrangements.
- Register workers for applicable NSSF schemes and set up contributory wage calculations.
- Check payroll tax residency, deductions and pay frequency.
- Complete any required staff movement filings, internal rules and personnel records.
- If hiring foreign staff, verify quota approval, immigration status and individual work authorisation.
- Maintain records of probation, leave, discipline and payments throughout employment.
A restaurant with variable evening shifts should test its rota against the daily and weekly limits before hiring. An NGO with a project-funded role should confirm whether a fixed-duration contract is legally suitable rather than assuming the grant end date settles the question. A technology company recruiting its first foreign specialist should verify its quota and permit position before setting a start date. In each case, the measurable objective is the same: a complete employee file, correct first payslip and no missing statutory registration.
Primary sources and further verification
Employers should consult the International Labour Organization labour law record, the ILO Employment Protection Legislation database, the National Social Security Fund, MLVT LACMS and FWCMS for the relevant provisions and processes. For current implementing regulations, sector rules and calculations, the Andersen Cambodia 2025 legislative digest, Andersen Cambodia summary of Prakas No. 214/25, PwC Cambodia social security summary, PwC Cambodia individual tax summary and KPMG update on the 2027 foreign manpower quota provide dated technical explanations. The operative Khmer texts and official notices should control where an English summary differs.