The Myanmar Guide: Employment Laws, Taxes, And Benefits

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Introduction

Myanmar has been experiencing rapid growth since it opened up in the 2000s, with its GDP growth rate among the highest in Asia. Since 2011, the government has initiated economic reforms to attract foreign investment and reintegration into the global economy.

The country's abundant natural resources and young workforce can attract foreign investment in various sectors like energy, garment, information technology, and food and beverage sectors.

General Information

Currency: Myanmar Kyat (MMK) 1 K = 0.00077 USD

Economic Capital: Yangon

Spoken Language: Burmese, English

GDP: 2.9% growth rate (2019) (Source: World Bank)

Time Zone: UTC (+ 06:30)

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Entitlements in Myanmar

Minimum Wage: Minimum wage is MMK 4800 per day for all organizations. The minimum wage is to be revised every two years.

Working Hours: 48 hours/week or 8 hours/day and a maximum of 12 hours/week of overtime work.

As per labor laws, at least one day per week shall be granted as a paid rest day. Usually, Sundays are the designated rest days. Due to the nature of employment or disposition of the employer’s operations, the employer and employee may mutually agree on any other day of the week to be the rest day.

Payroll Cycle: Salaries are paid monthly or, depending on the size of the employing enterprise, between 5 to 10 days before the month's end.

Pay Date: It has to be made on a working day.

Up to 100 employees

By the end of the month

101 - 500 employees

Within 5 days of the end of the month

501 - 1000 employees

Within 7 days of the end of the month

More than 1000 employees

Within 10 days of the end of the month

Upon termination

Within 2 days from the termination date

Upon resignation

By the end of employment

Overtime Compensation: Should the employer require the employee to work on their designated rest day, they shall enjoy an alternative day of rest (and may be entitled to overtime pay depending on the terms of the contract).

  • Overtime compensation would be decided upon mutual agreement between the employer and employee.
  • If an employee is required to work overtime, he or she is entitled to overtime pay at the double the basic salary.
  • Overtime is usually limited to a maximum of 12 hours per week or up to 16 hours in exceptional cases.

Leaves

On average, there are 25 public holidays per year:

Day

Date

Holiday Name

Monday

January 4

Independence Day

Wednesday

January 13

Karen New Year

Friday

February 12

Union Day

Tuesday

March 02

Peasants' Day

Saturday

March 27

Armed Forces Day

Tuesday

April 13

Thingyan Eve

Tuesday

April 13 – 16

Thingyan

Saturday

May 01

Labour Day

Tuesday

May 25

Vesak

Monday

July 19

Burmese Martyrs' Day

Friday

July 23

Beginning of Vassa

Wednesday

October 20

Thadingyut Festival

Wednesday - Thursday

November 17 – 18

Tazaungdaing Festival

Sunday

November 21

National Day in Myanmar

Saturday

December 25

Christmas

Public holidays: Workers who work on a public holiday are paid at double the standard rate plus a cost of living allowance. Public holidays that fall on a rest day or other holiday may not be taken on another day. Employees may take religious holidays for non-Buddhists based on an agreement between employer and workers.

Casual leave: All employees are entitled to 6 days of annual paid casual leave. They may not be carried forward to the subsequent year and may not be utilized for more than three consecutive days at a time, except in the case of religious or compulsory events (e.g., weddings, funerals).

Earned leave: It may be enjoyed for a minimum of 10 days consecutively or separately per year of employment, provided the employee has completed 12 consecutive months of service with a minimum of 20 working days per month. Each month with less than the minimum of 20 full days of work, one day may be deducted from the minimum earned leave entitlement. It may be carried forward and accumulated up to 3 years unless otherwise agreed between employer and employee.

Maternity leave: Expectant mothers are provided six weeks of prenatal leave and eight weeks of postnatal leave for a total of 14 weeks of maternity leave. Additional four weeks will be given in case of twins. Up to 6 weeks of leave will be given in the event of a miscarriage.

Sick leave: Employees are entitled to 30 days of paid medical leave per year, provided that they have completed six months of service. Employees covered by the Social Security Law are entitled to additional leave if certain work injuries are apart from the 30 days of paid medical leave.

Paternity Leave: Employees are entitled to 15 days off at full salary.

Marriage Leave: Employees are entitled to paid marriage leave according to the relevant Wage Regulation Order (WRO). Employees working in organizations that are not regulated by (WRO) are allowed two working days of marriage leave.

Adoption Leave: An employee is eligible for up to 8 weeks of paid childcare leave under the Social Security Law when adopting a child under one year of age.

Childcare leave: There is no specific provision for carers’ rights. If emergency care is required for dependants, an employee can use their medical leave or casual leave, or annual leave entitlements.

Death leave: In the event of the death of a parent or family member, the employee shall be allowed to utilize annual leave or casual leave, and if all yearly and casual leave has been exhausted, the employee can take unpaid leave. No additional days of leave are provided as funeral leave.

Work-Related Injury Leave: There is no separate leave if an employee gets injured at work. This gets covered as part of the medical leave.

Taxes in Myanmar

Tax year: The tax year is from 1 October to 30 September for all entities. Organizations must file the income tax within three months from the end of the fiscal year. The employers must file tax returns for capital gains within one month from the date of disposal of the capital assets. Advance payments must be made quarterly for corporate income tax.

Personal Income Tax –

Residents: Locals and resident foreigners (staying in Myanmar for 183 days or more during any assessment year) are taxed.

Individual Taxation

Rates:

Individual Income tax rate

Taxable income (MMK)

Rate

1 - 2,000,000

0%

2,000,000 - 5,000,000

5%

5,000,000 - 10,000,000

10%

10,000,000 - 20,000,000

15%

20,000,000 - 30,000,000

20%

30,000,001 and above

25%

Rental income tax rate

No Threshold

10%

Capital Gains tax rate

No Threshold

10%

Corporate taxation: A business on the promoted sectors list can receive a corporate income tax holiday between 3 to 7 years, depending on where the investment is located.

Rates:

Corporate income tax rate

25% (in general)

Branch tax rate

25%

Capital gains tax rate

10% (for oil and gas exploration and extraction companies, rate ranges from 40% to 50%)

  • All businesses can get duty-free imports of raw materials and equipment when expanding.
  • A 2% advance corporate income tax is levied on the import and export of goods.
  • There is no surtax, no alternative minimum tax, no separate capital gains tax.
  • There is a one-tier corporate tax system under which dividends received from a Myanmar resident company are exempted from income tax in the hands of shareholders.
  • A minimum of USD300,000 investment is required to benefit from the tax incentives.
  • A company reinvesting its profits is eligible for relief from corporate income tax.
  • A deduction of research and development expenses is permitted.

Commercial tax and specific goods tax: There is no VAT or value-added tax, but a commercial tax is levied on goods and services. A specific goods tax (SGT) is imposed on specific interests. The commercial tax rate generally is 5% and is payable on services, imports, exports, and goods manufactured within the country. The SGT rates range between 5% to 120%.

Employee Statutory Benefits

Social protection: Social Security Fund is compulsory for employers of 5 or more employees unless exempted under the law. Employers must pay social security monthly, before the 15th of the month, following the salary payment. Employers must withhold employees’ social security contributions from the salaries. The total contribution rate is 5% of wages (including recurring allowances and benefits), 3% and 2% of which are contributed by the employer and the employee, respectively.

Employment Insurance System: Ferry to and from workplace and travel, meal and accommodation arrangements, and training for skills development depend on mutual agreement between the employer and employee.

Employee Voluntary Benefits

Bonus: At the employer's discretion.

Additional: Different types of allowances for housing, transport, etc., are at the employer's discretion.

Retirals

Retirement Age: An employee should be 60 years old to get eligible for pension. In some instances, the pension can begin before that, but the criteria need to be fulfilled.

Pension: An employee gets eligible for a pension if he/she is 60 with at least 180 months of contributions. Pension is also given in three other cases – a disability pension, partial pension, and survivor pension.

  • Disability Pension – The employee must be assessed as incapable of any work and have at least 180 months of contributions.
  • Partial Pension – In this, at least 12 months but less than 180 months of contributions is required, 40% of total employee and employer contributions plus accrued interest is paid; with less than 12 months of contributions, a lump sum of total employee contributions is paid.
  • Survivor Pension – It is given to the deceased's dependent widow(er), children, and parents. It is assessed if the deceased received or was entitled to receive an old-age or disability pension at the time of death.

Employee Provident Fund: Some companies voluntarily provide this benefit to employees. The provident fund is available to all permanent employees. It allows employees to contribute at least 3% of their income (as decided in the official contract) into the fund, and it is released on the date of the individual's retirement.

Termination

Notice Period: 1 month  

Probation Period: The probation period cannot exceed three months. The employees can work without any probation period also.  

Severance Pay: Employees terminated by notice shall be entitled to severance payment, which is as follows:

Period of Employment

Amount of Severance Pay

Less than 6 months

No severance pay

6 months to 1 year

0.5 month's salary

1 - 2 years

1 month's salary

2 - 3 years

1.5 months' salary

3 - 4 years

3 months' salary

4 - 6 years

4 months' salary

6 - 8 years

5 months' salary

8 - 10 years

6 months' salary

10 - 20 years

8 months' salary

20 - 25 years

10 months' salary

More than 25 years

13 months' salary

Office Setup in Myanmar

Types of Business: Sole proprietorships, partnerships, limited companies, franchises, joint ventures, or wholly foreign-owned subsidiaries, acquiring shares in a Myanmar incorporated company, representative office, and branch office.

Co-working Cost: Several co-working spaces are vibrant and eco-friendly, with excellent internet service, air conditioning, relaxing zones, office equipment like printers, photocopiers, etc., at different places in Yangon and Mandalay. These places can be booked for a day, a week, or a month.

Visa: To work in Myanmar, foreign workers need to get a 70-day single-entry business visa. This costs USD50. Foreign employees who have obtained at least two 70-day single-entry business visas can apply for a multiple-entry visa (which is valid for 3 [costs USD 200] or six months [costs USD 400] or one year [costs USD 600]). Foreign Registration Certificate should be obtained by foreign nationals who wish to work in Myanmar for more than 90 days continuously.

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