Introduction to Payroll in Cambodia

If you're going to hire a remote worker in Cambodia, you'll need to be aware of the local labor laws to guarantee that your payments are made on time, accurately, and in accordance with the law.

With expertise and local in-country support, Skuad, a Cambodia payroll company, can help you take care of:

• Benefits and compensation for your remote team
• Employer and employee contributions
• Vacation leave and holiday pay
• Payroll taxes

If you are planning on building your team in Cambodia, get help from Skuad to stay compliant with labor laws and other legislation on taxes and benefits.

Payroll Process in Cambodia

There are three major phases of the payroll process: pre-payroll, payroll calculations, 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 labor laws that contracts and agreements should be in the local language, Khmer, but it is advisable to remove all doubt and to ensure all your 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. A payroll provider in Cambodia such as Skuad can ensure full compliance with Cambodia’s labor laws.

Salary components

Keeping track of all hours worked and salary payments can be automated with Skuad’s help.

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. Partnering with a payroll provider in Cambodia with an automated system can make this process easier.

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. For compliance and information on taking care of the rest of payroll, get a Skuad demo today.

Payroll Processing in Cambodia

Payroll is easier with a payroll processing company like Skuad. Your employees‘ work hours will be recorded, deductions will be taken from the salary, taxes will be withheld and remitted to the government, and payments will then be sent out to employees. You can be sure all of your remote employees will be paid on time and given the benefits they are entitled to by law. To outsource payroll in Cambodia, contact Skuad.

Payroll Processing Company In Cambodia

Skuad makes it simple to set up payroll in Cambodia, allowing you to focus on expanding your business. When payroll is taken care of automatically, you can spend more time growing your company. Contact us today to see a demo.

Payroll Management in Cambodia

Payroll administration entails keeping accurate payroll records, paying employees, issuing pay slips, and adhering to labor rules. Skuad, a Cambodian payroll service, can automate payroll to ensure that employees are paid on time.

Payroll Compliance in Cambodia

An important part of managing payroll is ensuring you comply with labor laws and benefits rules, like taxes, leave entitlements, and other legislation. labor legislation is complex and subject to change. Without an in-country legal team, you'd have a difficult time keeping up with the law. However, all of the compliance is taken care of if you work with a payroll business in Cambodia like Skuad.

Payroll Components in Cambodia

If you work with a Cambodia payroll outsourcing company, you can rest assured that all of the following elements will be taken care of:

Compensation

In Cambodia, the minimum wage for 2022 is the equivalent of $194 per month. The payroll frequency is monthly.

Working hours

Normal working hours in Cambodia cannot exceed eight hours per day and 48 hours per week. Employers are prohibited by law from scheduling workers to work more than six days per week. The wage per night work, hours between 10 PM and 5 AM, is paid at 130% of regular pay.

Overtime laws

Any additional time worked above the normal working hours per day is considered overtime, even if the total hours worked that week were less than 48. Overtime is paid as 150% of the regular salary for daytime hours worked and 200% for night work.

Social Security

Employers must pay 0.8% of monthly payroll to social security. Employees do not contribute to social security.

Sick leave

Employees injured on the job must have their health care paid for by the employer. Sick leave accompanied by a doctor’s certificate must be granted for up to six months and must be paid:

• Full wages for the first month of sick leave
• 60% of pay for second and third months
• No pay for fourth to six months

Parental leave

Female employees with at least one year of employment with a company are entitled to 90 days of maternity leave at 50% of their regular wages and cannot be dismissed during that time. For two months after returning from maternity leave, the employees should only be given light duty. For one year, breastfeeding time of one hour per day is allowed, which can be split between two half-hour breaks. Fathers should get one day of paternity leave.

Public holidays

There are 21 total public holidays in a year in Cambodia, some of which last several days, for which employees must be given paid time off. Annual vacation leave of one and a half days per month worked should be given to each employee. An additional day off per year is given to employees who worked for over three years at a company.

Employees earn 1.5 days of vacation time per month worked up to one year of employment. After one year of employment, vacation time is four weeks out of a year. When an employee has worked for 15 years at a company, vacation time is increased to three days a month. Vacations are usually taken between May 2 and September 30.

Public holidays in Cambodia:

• International New Year’s Day
• Victory over Genocide Day
• International Women's Day
• Khmer New Year’s Day, three days
• International Labor Day
• King's Birthday, Norodom Sihamoni
• Visak Bochea Day
• Royal Plowing Ceremony
• King's Mother Birthday, Norodom Monineath Sihanouk
• Constitutional Day
• Pchum Ben Day, three days
• Commemoration Day of King's Father, Norodom Sihanouk
• King's Coronation Day, Norodom Sihamoni
• Water Festival Ceremony, three days
• Independence Day

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 income tax rate in Cambodia is a progressive rate based on brackets of income.

Annual earnings in Cambodian riel KHR and the tax rate:

• 0 to 1,300,000 0%
• 1,300,001 to 2,000,000 5%
• 2,000,001 to 8,500,000 10%
• 8,500,001 to 12,500,000 15%
• Over 12,500,000 20%

Other laws

By law, terminations must be by cause. Otherwise, termination compensation must be paid to the dismissed employee. A notice of at least 10 days must be given if the employment fixed duration contract (FDC) is more than six months and up to a year, and 15 days notice is given for FDCs over a year and up to years.

For these employees, severance pay of 5% of the total salary and benefits of the contract is due, along with any unpaid annual leave and their last unpaid salary. If an FDC employee is dismissed without cause, such as serious misconduct or aptitude reasons, they may be entitled to the salary of the remainder of the contract in addition to severance pay.

For unfixed duration contracts (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 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

All terminated employees may spend two days per workweek looking for new employment.

Using a payroll company in Cambodia can assist you with the components of payroll.

Conclusion

With the correct management system in place, paying independent contractors and employees in Cambodia can be simple. Contact Skuad and request a demo today if you're ready to hire someone and pay them with one-click payroll services in Cambodia, stay compliant, and save time and money.

Note about the current currency exchange rate: as of May 2022, 1 Cambodian riel is US $0.00025.