Employer of Record (EOR) in Cambodia

Introduction

Cambodia runs payroll on a rhythm most employers don't expect. Twice a year, in June and December, every worker on an open-ended contract is owed a seniority indemnity. Salaries are paid in riel, contracts have to fit the fixed or undetermined duration split under the 1997 Labor Law, and there is no general minimum wage, only a sector floor for garment and footwear workers.

An employer of record in Cambodia takes that weight off your plate. An EOR is a locally registered company that becomes the legal employer of your staff, running payroll, NSSF contributions, and tax filing, while your team directs the day-to-day work. It lets you hire without registering an entity with the Ministry of Commerce.

This guide covers hiring and contracts, working hours and leave, payroll and taxes, work permits, termination, and when an entity beats an EOR.

Cambodia at a glance

Estimated Population: 17.9 million

Currency: Cambodian Riel (KHR)

Capital: Phnom Penh

Officially recognized language: 19 Languages

Languages frequently used: Khmer

GDP: USD 46.35 Billion

Employment in Cambodia

The main labor and employment laws in Cambodia are the 1997 Labor Law, its first amendment in 2007, and the 2002 Law on Social Security. There are also several regulations, such as royal decrees, sub-decrees, prakas, circulars, and notices issued by the Cambodian government and the Ministry of Labor.

The labor code came into effect in January 1997 and governs the relationship between employers and workers resulting from employment contracts. These laws apply to everybody employed in Cambodia, regardless of their nationality.

The labor code is an exhaustive document and consists of 396 legal articles. It comprehensively covers the employment rights of individuals employed in Cambodia in exchange for remuneration.

All employers coming under the ambit of the labor code are expected to make a declaration to the Ministry of Labor, guaranteeing to abide by the labor code when opening an enterprise or establishment. This declaration is mandatory and must be made in writing to the Ministry of Labor before the opening of the enterprise or establishment.

The Labor Law also has room for labor disputes, and labor dispute resolution is included in the Labor Law. Labor disputes are classified as individual and collective labor disputes.‍

What needs to be understood before employing someone in Cambodia

The Labor Law provides the basic legal form and scope for labor contracts in Cambodia, which cover the rights and obligations of employers and workers in a labor relationship. The employment relationship between an employer and worker is governed by an oral or written contract. There are two primary types of contracts.

• ‍Definite Contract: A definite contract (FDC - Fixed Duration Contract) has to be given in writing. Otherwise, it is treated as an undetermined or unfixed duration contract (UDC). A definite contract has to be signed with consent and cannot extend beyond two years. It can be renewed, but the renewal must not exceed two years either. Any violation of the rule transforms the contract into a UDC. When a contract is signed for a fixed duration of one year or less, but the work quietly continues after the prescribed duration, the contract becomes a UDC.‍‍
• Undetermined or Unfixed Duration Contract (UDC): A UDC can be created in two ways. First, by the intentional creation of a contract wherein both parties enter the contract without specifying the date. Second, by unintentional creation, where an existing FDC becomes UDC.

Contractors vs full-time employees

According to Cambodian law and depending on the nature of work, an individual can be considered a full-time employee or laborer. Both enjoy the same rights, protections, and benefits under Cambodian law. An employee is defined as someone who is employed to help a person or organization in exchange for remuneration. A laborer is someone who is under the direction of the employer and predominantly performs manual labor in return for remuneration.

On the other hand, an independent contractor works based on an arrangement in which one party (the contractor) takes responsibility for performing a specific work, and the hiring party agrees to pay remuneration for the accomplishment of the work. The independent contractor remains legally free and does not come under the subordination of the hiring party. They are even free to choose how the work can be carried out without direction and supervision from the hiring party. Also, the independent contractor is offered no employment protection or rights under Cambodian law.  

In Cambodia, full-time employees are entitled to NSSF coverage, seniority indemnity, and statutory leave under the 1997 Labor Law, while independent contractors fall outside those protections entirely. Choosing the wrong arrangement, or misreading the line between the two, creates misclassification exposure.

Skuad supports both hiring models from a single platform:

EOR for full-time employees

• Acts as the legal employer across 160+ countries, so you can hire without setting up a local entity
• Supports employment contract generation aligned with local labor laws across supported markets
• Facilitates statutory contribution workflows covering applicable benefits and deductions
• Supports payroll processing in 70+ currencies with tax withholding and statutory deductions
• Assists with termination and offboarding, including notice periods and final settlements as required locally

Contractor management

• Helps onboard contractors with locally compliant agreements that reduce misclassification exposure
• Supports invoice generation, approval workflows, and payment processing across supported markets
• Helps flag classification risk early with built-in worker classification checks
• Helps manage contractor records, contracts, and payment history from one dashboard alongside full-time employees

Full-time or contractor. Skuad supports both. See pricing

Hiring in Cambodia

Cambodia’s economy has grown at 7.7% from 1995 to 2018 as per the World Bank, mainly because of garment exports and tourism. As Cambodia develops, it is slowly transitioning itself from a low-skilled labor-intensive growth model to a more skill-driven economy.

The Cambodian government is committed to Industry 4.0 and has newly introduced minimum wages, concentrating on changing the nature of the workforce. Cambodia has the youngest working population with an average age just below 24.  

Recruitments are mainly carried out with the help of newspapers and both online and offline job boards. With the increased presence of the internet, social media platforms such as Facebook and LinkedIn have also gained ground in Cambodia. Some of the popular job websites in Cambodia include CamHR and Bong Thom Classifieds.

Most recruitments still happen through recommendations and word of mouth. If someone has a strong personal network, their chances of finding a job are much higher. Meanwhile, some newspapers advertise open positions, and both Phnom Penh Post and The Cambodian Daily carry job classifieds regularly.

All employers are expected to comply with the Cambodian Labor Law and employers must remain aware of local laws that govern recruiting. When hiring, salaries are usually quoted in gross figures along with benefits such as insurance, pensions, and vacations. Once the salary is agreed upon, a three-month probation period is standard and all terms and conditions are elucidated in the contract.  

Recruiting employees quickly is daunting in Cambodia but the process can be made seamless by partnering with an EOR company. An EOR service allows companies to channel their critical resources to business expansion instead of focusing on HR-related functions. It can take care of all compliance regulations, HR, and the hiring process. Moreover, it can accelerate the hiring process with innovative tools such as virtual onboarding and e-signing of documents.

Probation and termination

Probation in Cambodia

As per the law in Cambodia, the probation period (Article 68) cannot be longer than the amount of time needed to gauge the worker’s suitability and professional worth to the employer. Specifically, the period cannot last for more than three months for regular employees, two months for specialized workers, and one month for non-specialized workers. The travel cost incurred by the probationary employee during the probationary period has to be covered by the employer.

Termination types

Notice periods

No notice is required during probation, for a serious offence by either party, or for an act of God (Article 82). During the notice period, the worker is entitled to two paid days off per week to look for a new job (Article 79), and a worker who finds a new job mid-notice can leave early without owing the employer (Article 78).

Compensation on termination

Ending employment in Cambodia depends on the contract type: definite contract(FDC) and undetermined-duration (UDC) contracts carry different notice and severance rules under the 1997 Labor Law, alongside seniority indemnity obligations. Getting the sequence wrong invites disputes.

Skuad helps you stay aligned with these rules through local EOR infrastructure, so your team doesn't have to interpret Cambodian termination law on its own:

• Supports notice period and final settlement calculations as required across supported markets
• Helps document terminations in line with local labor requirements
• Supports offboarding workflows, final pay, and statutory settlements across supported markets
• Helps keep employment practices aligned with regulatory changes across 160+ countries

Types of visas in Cambodia

Work permits

All foreign nationals are supposed to get an ordinary e-visa for work purposes. Along with this, they must obtain a work permit and employment card from the Ministry of Labor and Vocational Training (MLVT). 

In September 2017, new rules on work permits came into effect. According to them, a Cambodian work permit is required for all foreign nationals who apply for six-month and one-year visa extensions. Articles 261, 264 & 265 specify that foreign nationals must own a work permit. Some other conditions to be fulfilled include the following.

• A job offer compliant with the regulations about the employment of foreign nationals.
• Legal entry into Cambodia with a valid passport
• A valid residency permit and fitness for the relevant job
• Free from any contagious diseases whatsoever

Hiring a foreign national in Cambodia means securing an E-class visa, then a work permit and employment card from the Ministry of Labor and Vocational Training, with renewals tied to visa extensions. The steps stack up and add lead time to any international hire.

Skuad supports the work permit process on your behalf, including:

• Supporting work permit and visa applications for foreign employees joining your team
• Helping coordinate documentation with the relevant local immigration and labor authorities
• Assisting with E-class visa, work permit, and employment card steps as required by local law
• Helping track documentation requirements and deadlines across the full permit lifecycle
• Helping keep your team aligned with requirements as renewals and regulations change

Book a demo to see how Skuad supports Cambodia work permits end-to-end

Payroll and taxes in Cambodia

Payroll details

Social Security Registration (NSSF)

Social Security Contributions (NSSF)

Contributions are calculated on the contributory wage, which sits within a band of roughly KHR 400,000 to KHR 1,200,000 per month. Total employer NSSF cost in the current phase is about 5.4% of the contributory wage (0.8% + 2.6% + 2%).

Corporate Income Tax (CIT)

CIT was previously known as Tax on Profit. The General Department of Taxation (GDT) administers it, and there are no provincial or local income taxes.

Value-Added Tax (VAT)

Withholding Tax (WHT)

Taxation in Cambodia

Income tax (Tax on Salary) applies to an individual's monthly salary at progressive rates. The current rates are:

Incorporation

Most companies that set up bases in Cambodia choose to incorporate as a limited liability company (LLC) because of the numerous benefits it offers.

The prescribed steps to set up an LLC subsidiary in Cambodia are as follows.

• Create a local bank account
• Deposit the minimum paid-up capital
• Register with the Ministry of Commerce
• Submit the Memorandum and Article of Incorporation
• Register the company name
• Register for trademarks at the Department of Intellectual Property
• Register with the tax department and obtain the tax identification number
• Make a declaration with the Ministry of Labor before opening a business
• Obtain all licenses from the respective ministries

Cambodian laws prescribe LLCs to pay at least USD 1,000 as paid-up capital along with two shareholders and one director. Shareholders and directors can be foreign and they are not expected to live in Cambodia while working for the company.

The company is expected to open a corporate bank account to pay employees and deposit the paid-up capital. Laws state the company must have a physical office, a registered real estate agent, and a local business name in Khmer. Also, LLCs are required to file annual tax returns and register for value-added tax (VAT).

PEO

A professional employer organization (PEO) is a legal entity that practices the all-inclusive outsourcing of HR functions to an outside HR organization, including employee benefits and payroll. In a PEO, the outside HR organization becomes the professional employer of your workforce without providing any staff.  

All day-to-day assigning and managing of tasks rests with the main employer, your organization. The scope of control of the workforce depends on the service level agreement (SLA).

With an EOR company, the external organization has partial responsibility for the HR functions. On the other hand, with a PEO, the HR organization takes complete responsibility for the HR functions. This is one of the stark differences between PEOs and EOR services.

While it may be good for the main employer to retain control over decision-making, it can be time-consuming for the organization that is trying to expand its business operations.

As an EOR service, companies can completely do away with setting up a commercial entity in a foreign country for business expansion.

Employer of Record in Cambodia: From first hire to full team

Cambodia rewards companies that move early. The workforce is young, the cost base is competitive, and ASEAN membership opens the wider region. What slows most foreign employers down isn't finding talent, it's the setup: a Ministry of Commerce registration, a GDT tax number, an NSSF account, a Khmer business name, and a physical office, all before a single person starts.

An Employer of Record clears that runway. It already holds the entity and the registrations, so you can hire compliantly in days, settle the twice-yearly seniority indemnity correctly, and keep payroll, work permits, and NSSF filings in order while you focus on the team itself.

It won't suit everyone. If you're building a large, permanent base in Phnom Penh, your own entity will earn its keep over time. But if you're making your first hires, testing the market, or simply want to move now, an EOR is the faster route in.

See how Skuad supports compliant hiring in Cambodia

FAQs

1. What is an employer of record in Cambodia?

An employer of record in Cambodia legally employs your staff, handling payroll, NSSF contributions, GDT tax filing, and compliance with the 1997 Labor Law, so you hire without a local entity.

2. How much does an employer of record in Cambodia cost?

Most EOR providers in Cambodia typically charge $200 to $600 per employee monthly, plus the gross salary. 

3. Can a foreign company hire in Cambodia without setting up an entity?

Most EOR providers hold a Cambodian entity and registrations, signing compliant FDC or UDC contracts, and running payroll, so you skip Ministry of Commerce incorporation.

4. What are the compliance risks of hiring in Cambodia without an EOR?

Main risks are contractor misclassification, missed NSSF contributions, seniority indemnity errors, and termination mistakes under the 1997 Labor Law, all of which can trigger penalties.

5. EOR or setting up an entity in Cambodia: which makes more sense?

An EOR suits small teams and fast entry, with no setup cost. A limited liability company becomes more cost-effective at higher headcounts and a long-term local presence.