Payroll in Cambodia: A Comprehensive Guide for 2026

Introduction

Payroll in Cambodia requires withholding monthly Tax on Salary (ToS) under the General Department of Taxation (GDT), remitting National Social Security Fund (NSSF) contributions across three separate schemes, and complying with the Cambodian Labour Law on minimum wage, leave, and termination.

Tax on Salary applies progressive monthly rates from 0% to 20% across five bands, while the three NSSF schemes cover occupational risk, healthcare, and pension, each with its own rate. Foreign companies that hire in Cambodia must register with both the General Department of Taxation and the NSSF before running payroll legally.

Each NSSF scheme carries its own rate and remittance, fringe benefits attract a separate flat 20% tax, and salaries paid in foreign currency need conversion between Khmer riel and US dollars.

In this guide, we cover Cambodia's payroll processing phases, statutory components, public holidays, Tax on Salary bands, termination rules for fixed and undetermined contracts, and how foreign companies can run compliant payroll without setting up a local entity.

What are the different phases of payroll processing in Cambodia?

One of the main complexities of payroll is that the process is composed of three different stages: Pre-payroll, payroll, and post-payroll.

Pre-payroll phase

The pre-payroll period is when you will gather employee documentation, make your team aware of all of your policies, and prepare to pay employees.

Setting up the organization

Policies such as leave and attendance should be communicated to your workers, as well as pay frequency. Employment contracts, along with policies, should be signed by the company and the workforce. There is no stipulation in the Cambodian Labour Law that contracts and agreements must be in the local language, Khmer, but it is advisable to remove all doubt and ensure all employees are on board.

• Business profile: Your business should have a registered business number, which will be required when sending out tax forms and pay stubs.
• Work location: If you have employees in different regions and cities throughout Cambodia, requirements and policies may differ depending on the area. Policies may be set at each workplace.
• Leave policy: Make your leave regulations known to all of your staff. Employees in Cambodia are legally entitled to certain types of leave, such as parental leave, sick leave, and paid holidays.
• Attendance policy: Timesheets, doctor's notes for sick leave, and supervisor approval for requested time off should all be documented. Biometric equipment can assist in keeping track of working hours.

Statutory components

Certain items must be provided to your employees by law, such as social security benefits.

Salary components

Several factors influence salary calculation, including allowances, deductions, and leave types.

Pay schedule

The payroll frequency in Cambodia is monthly, typically paid on the last working day of the month.

Employee information

All employee information, including department and job titles, should be recorded in preparation for payroll.

Payroll calculation phase

The Cambodia payroll calculation phase is the most important part of the process. Pre-payroll data is entered into a system that calculates each employee's paycheck, resulting in the compensation paid after deductions, withholding, and taxes.

Post-payroll phase

Salary payments

Employees are compensated in the post-payroll phase. Send your bank advice to your business bank for salary disbursements after you've completed all payroll computations.

Payroll accounting

Payroll is a significant and costly expense. After payments have been sent out, balance the accounts and keep track of the total payroll monies spent.

Payroll reporting and compliance

Employee and employer contributions to social security are withdrawn and sent to the appropriate government authorities by the due dates.

What is payroll management in Cambodia?

Managing payroll in Cambodia includes keeping track of all the financial information of your employees, while at the same time complying with the country's payroll and employment laws.

What is payroll compliance in Cambodia?

Employment terms and conditions in Cambodia are governed by the Labour Law of 1997 (as amended), administered by the Ministry of Labour and Vocational Training (MLVT), with tax matters handled by the General Department of Taxation (GDT).

Cambodia's statutory payroll compliance runs across two separate authorities with different deadlines: Tax on Salary (ToS) filed with the General Department of Taxation by the 20th of the following month, and three distinct NSSF contribution schemes covering occupational risk, healthcare, and pension, each with its own rates and remittance requirements.

Skuad's Shield compliance layer helps your team stay aligned with statutory obligations across supported markets, covering contribution workflows, regulatory monitoring, and employment documentation, without independently tracking every regulatory update.

What are the main payroll components in Cambodia?

To guarantee strict compliance with local employment legislation specifically relating to Payroll in Cambodia, you first need to understand its components. Payroll components in Cambodia are administered under the Labour Law of 1997 (as amended through 2021), with statutory contributions to the National Social Security Fund (NSSF) under the Law on Social Security Schemes.

How many public holidays are there in Cambodia?

Cambodia observes 21 days of paid public holidays in 2026 under Sub-Decree No. 167 (issued 18 September 2025) and Prakas No. 216/25 by the Ministry of Labour and Vocational Training.

What are payroll taxes in Cambodia?

Taxes are a big part of payroll costs in Cambodia. The Cambodia corporate tax rate is a flat tax rate of 20%. For employees, the monthly Tax on Salary (ToS) is administered by the General Department of Taxation (GDT) under the Law on Taxation.

Cambodian resident employees are taxed at progressive monthly rates ranging from 0% to 20% under the five-band structure set out in Sub-Decree No. 48 (11 March 2024):

Non-resident individuals are taxed at a flat rate of 20% on Cambodian-sourced salary, which constitutes a final tax. Fringe benefits provided by employers are taxed at a flat 20% on the value paid. Residents may claim a monthly deduction of KHR 150,000 per dependent child under 14 (or under 25 if a full-time student) and KHR 150,000 for a dependent spouse with no income.

The total employer cost in Cambodia adds up quickly once you stack the progressive ToS bands up to 20%, the employer NSSF contributions across all three schemes, the 20% fringe benefit tax, and the dual-currency handling between Khmer riel and US dollars.

How are employees terminated in Cambodia?

Under Sections 73 to 86 of the Cambodian Labour Law of 1997 (as amended), termination notice periods and severance entitlements depend on the type of employment contract.

Fixed Duration Contracts (FDC) or Definite Contracts

A notice of at least 10 days must be given if the Fixed Duration Contract (FDC) is more than six months and up to and including a year, and 15 days' notice is given for FDCs over a year.

For these employees, severance pay of 5% of the total wages paid during the length of the contract and benefits are due, along with any unpaid annual leave and their last unpaid salary. If an FDC employee is dismissed without cause, the employer must pay the worker the full amount of wages that the worker would have received if they had been allowed to work until the end of the contract, in addition to severance pay.

Undetermined Duration Contracts (UDC) or Indefinite Contracts

For Undetermined Duration Contract (UDC) dismissals, the employee is entitled to notice:

• Seven days' notice for employment up to six months
• 15 days' notice for employment between six months and two years
• One month's notice for employment between two and five years
• Two months' notice for employment between five and 10 years
• Three months' notice for employment over 10 years

During the notice period, employees may take up to two days of paid leave per week to look for a new job. If an employer fails to give the required notice, they must pay the worker the wages and benefits the employee would have earned during the notice period.

How to outsource payroll in Cambodia?

Payroll in Cambodia rewards careful execution. A missed ToS bracket, a wrong NSSF scheme calculation, or an unclaimed dependent deduction each carries real cost. The practical question for most foreign employers is not whether to run payroll, but how to run the payroll.

Some companies build the function in-house, which only works if you already have a Cambodia HR and accounting team large enough to absorb monthly GDT and NSSF filings.

Others run payroll remotely from their home country, which keeps overhead lean but leaves a team chasing every Prakas update, ToS bracket revision, and pension contribution change from outside the country. A local Cambodian payroll bureau takes the filings off your plate but assumes you already have a registered entity.

The cleanest route for foreign companies hiring in Cambodia without a local entity is a global Employer of Record, which holds the registrations, processes monthly payroll in either riel or US dollars, supports GDT and NSSF remittances across all three schemes, and keeps you aligned with the Labour Law of 1997 as the rules shift each year.

For foreign companies hiring in Cambodia without a local entity, Skuad's Employer of Record platform acts as the legal employer, so your company can process payroll and manage statutory compliance without setting up a local entity first.

Here is what Skuad helps with:

• Acts as the legal employer across 160+ countries, so you can hire without setting up a local entity
• Payroll processing in 70+ currencies with accurate tax withholding and statutory deductions
• Statutory contribution workflows across supported markets, covering applicable social insurance and pension obligations
• Employment contract generation aligned with local labor laws and statutory requirements across supported markets
• Compliance support that adapts as local labor and tax requirements change

Book a demo to see how Skuad gets your first Cambodia hire onboarded in weeks.

Ready to set up payroll in Cambodia?

Cambodia's minimum wage only applies to the garment, textile, footwear, travel goods, and bag sectors. For every other sector, pay floors are set by individual employment contracts, with no statutory baseline to fall back on.

Add to that a termination framework where notice periods and severance calculations differ entirely depending on whether the contract is fixed duration or undetermined duration, overtime capped at two hours per day, requiring prior MLVT approval, and pension contributions under the NSSF that are scheduled to rise every five years until they reach 8%.

Each of these has its own rule, and none of them are visible in a standard payroll setup without country-specific knowledge.

An Employer of Record model helps simplify this by enabling companies to run payroll in Cambodia without setting up a local entity, while Skuad supports payroll processing in 70+ currencies, statutory contribution workflows, employment contracts, and compliance across supported markets through its EOR capabilities.

The next step is to align your hiring plans and evaluate how an EOR setup can support compliant payroll operations in Cambodia without the overhead of entity registration.

Start running payroll in Cambodia without entity setup. Book a demo.

FAQs

1. What deductions come out of a Cambodian pay slip?

Two main items leave a Cambodian pay slip: Monthly Tax on Salary (ToS) at progressive rates from 0% to 20%, and the employee's 2% Pension Scheme contribution to the National Social Security Fund (NSSF). The employer funds occupational risk, healthcare, and a matching pension contribution on top of gross salary.

2. How much does it cost an employer to run payroll in Cambodia?

On top of gross salary, the employer carries National Social Security Fund (NSSF) contributions of 0.8% for occupational risk, 2.6% for healthcare, and 2% for pension, plus a 20% fringe benefit tax on non-cash benefits. US dollar salaries need conversion to Khmer riel at the National Bank of Cambodia rate.

3. When are Tax on Salary and NSSF payments due in Cambodia?

Monthly Tax on Salary (ToS) is filed and remitted to the General Department of Taxation (GDT) by the 20th of the following month, with National Social Security Fund (NSSF) contributions remitted monthly. Employers file an annual Tax on Salary declaration with the GDT by 31 March of the following year.

4. What is the penalty for late payroll filings in Cambodia?

Late filing or payment of Tax on Salary (ToS) draws additional tax plus monthly interest under the Law on Taxation, assessed by the General Department of Taxation (GDT). Late National Social Security Fund (NSSF) contributions attract their own penalties. Unpaid NSSF also blocks employees from healthcare, pension, and injury benefits.

5. Can a foreign company run payroll in Cambodia without a local entity?

Payroll in Cambodia requires registration with both the General Department of Taxation (GDT) and the National Social Security Fund (NSSF), which assumes a local entity. Companies without one typically use a global Employer of Record, which holds the registrations, processes monthly payroll, and supports GDT and NSSF remittances.

6. How long does it take to set up payroll for a new hire in Cambodia?

With GDT and NSSF registrations already in place, a new hire can join the next monthly payroll cycle once their contract and NSSF registration are complete. Through an Employer of Record that holds the registrations, a new hire in Cambodia can be onboarded in weeks; an entity setup takes months.