Hire employees in Cambodia
What a foreign company needs to know before employing people in Cambodia in 2026: whether you need a local entity, what NSSF contributions and the twice-yearly seniority payment really cost, how tax on salary works on a US dollar payroll, how notice and termination work, and how the foreign worker quota affects expatriate hires. Written for CHROs, CFOs, General Counsel and founders.
Employer of record in Cambodia: quick answers
The questions leadership teams ask first.
Do I need a local entity in Cambodia to hire?
No. There are three routes:
- Employer of Record. Dryft Global employs the person through a compliant Cambodian employer registered with the Ministry of Commerce, the General Department of Taxation, the Ministry of Labour and Vocational Training and the National Social Security Fund (NSSF). We issue the contract and run payroll, seniority payments and benefits. You direct the work.
- Direct local entity. You register a private limited company through the online Single Portal and complete tax, labour and NSSF registrations before the first payroll, usually in about 1 to 3 weeks.
- Independent contractor. Lawful only for a genuinely independent business. Someone who works full time under your direction is an employee whatever the contract says.
When should I use an EOR instead of registering locally?
Use an EOR for your first hires and for engineering, finance, support or operations teams of up to about 50 people. You start in days and avoid company registration, the patent tax and the monthly labour and tax filings. Your own entity earns its keep for a large operation, when you will sell into the Cambodian market, or when you want Qualified Investment Project incentives.
What does an employee actually cost beyond salary?
NSSF costs the employer 5.4% (occupational risk 0.8%, health care 2.6% and pension 2%) on a wage base capped at KHR 1,500,000 a month from November 2026, so at most about USD 20 a month. On a USD 1,500 salary that is about 1.3%. Every open-ended employee also earns a seniority payment of 15 days' wages a year, about 4.2%. With health insurance and a customary one-month bonus, the all-in figure is roughly 5% to 16%.
How difficult is termination in Cambodia?
An open-ended employee can only be dismissed for a valid reason, such as conduct, aptitude or operational needs, with notice of 7 days to 3 months depending on service. Without a valid reason, the employer also owes damages equal to the seniority payments the employee received during employment. Fixed-term contracts carry severance of at least 5% of total wages. Final pay is due within 48 hours, and dismissal during maternity leave is prohibited.
Can Dryft Global legally employ my team in Cambodia?
Yes. Dryft Global acts as the legal employer in Cambodia. We issue Labour Law compliant contracts, register employees with NSSF, withhold tax on salary, keep the MLVT payroll ledger, pay the June and December seniority instalments, and manage leave, notice and terminations.
Hiring routes compared
Speed, local registration, tax administration and liability differ by route.
| Factor | Direct local entity | Dryft Global EOR | Independent contractor |
|---|---|---|---|
| Time to operational state | About 1 to 3 weeks for registrations, plus quota and permits for foreigners | Days to 2 weeks | Days |
| Local entity required | Yes, private limited company | No | No |
| NSSF, tax on salary and payroll ledger | Your registrations and filings | Handled by Dryft Global | Contractor self-reports |
| Statutory liability | Direct corporate exposure | Assumed by Dryft's local employer | High if reclassified |
| Best fit | Large operation, local sales, investment incentives | Teams of 1 to about 50 | Discrete project work |
What an employee costs in Cambodia
NSSF contributions are charged on a capped wage base, so the statutory cost falls as a percentage as salaries rise. The model below is a Phnom Penh software engineer on USD 1,500 a month, a Cambodian national, in November 2026.
| Component | Employer share | Notes |
|---|---|---|
| NSSF occupational risk | 0.8% | Of a contributable wage capped at KHR 1,500,000 |
| NSSF health care | 2.6% | Employer only, same capped base |
| NSSF pension | 2% | Employee also pays 2%; both rise to 4% from October 2027 |
| Statutory subtotal | ~1.3% | About USD 20 a month, the maximum on the capped base |
| Seniority payment | ~4.2% | 15 days' wages a year, paid in June and December |
| Health insurance | ~2.7% | Customary, typical budget |
| Annual bonus | ~8.3% | Customary, not statutory; often one month a year |
| Total employer on-cost | ~5% to 16% | Above base salary on the model salary |
For an employee on USD 1,500 a month, budget roughly USD 19,000 to 21,000 a year all-in before the EOR fee, approximately KHR 78 million to 86 million at KHR 4,090 to the dollar. Ask us for a cost model with current rates applied.
Payroll and tax
Prakas 442 requires workers covered by the Labour Law to be paid twice a month: half in the second week and the balance in the fourth. Many office employers pay monthly, so confirm the approach for your workforce. Salaries may be paid in riel or US dollars by agreement, and US dollar salaries are common. A payslip in Khmer is required on each payday, and the monthly payroll ledger is submitted online to the MLVT. NSSF is paid by the 15th of the following month and reported by the 20th.
Tax on salary
Residents are taxed monthly at 0% up to KHR 1,500,000, then 5%, 10%, 15% and 20% above KHR 12,500,000. Non-residents pay a flat 20%. Each dependent child and non-working spouse reduces taxable salary by KHR 150,000 a month. Fringe benefits are taxed at 20%, withheld by the employer. Tax is calculated in riel even on a US dollar salary, and it is filed and paid monthly by the deadline in the current General Department of Taxation calendar. On USD 1,500 a month, tax on salary is about KHR 438,500 and the employee's NSSF pension KHR 30,000, so net pay is about USD 1,385.
Minimum wage
There is no general minimum wage. The garment, textile, footwear, travel goods and bag sector minimum is USD 210 a month in 2026 (USD 208 on probation), rising to USD 212 in 2027. Professional salaries are far above this level.
Leave and mandatory benefits
- Annual leave. 1.5 working days a month, 18 days a year, plus 1 extra day for every 3 years of service.
- Special leave. Up to 7 days a year for family events.
- Sick leave. No statutory paid sick leave; employment is protected during illness of up to six months. Many employers grant around seven paid sick days by policy.
- Public holidays. 21 days in 2026, including Khmer New Year, Pchum Ben and the Water Festival (three days each). Holiday work is paid at 200%.
- Maternity. 90 days. The employer pays 50% of wages to employees with a year of service, in full before leave starts, and NSSF pays a benefit of 70% of reference earnings to eligible contributors. Dismissal during maternity leave is prohibited.
- Paternity. No statutory entitlement; fathers use special leave or employer policy.
- Working time. 8 hours a day and 48 hours a week, with overtime at 150%, or 200% at night, on rest days and on holidays.
- Seniority payment. 15 days' wages a year for open-ended employees, paid as 7.5 days in June and 7.5 days in December.
- Supplementary benefits. Health insurance, an annual bonus, and transport or meal allowances.
Termination and notice periods
Probation is up to 3 months for regular employees, 2 for specialised workers and 1 for non-specialised workers, with no notice required. For open-ended contracts, notice runs from 7 days for service under six months to 3 months after ten years, and the employee gets two paid days a week to look for work during notice.
| Situation | Requirement |
|---|---|
| Open-ended contract, valid reason | Notice or pay in lieu, unused leave and the pro rata seniority payment |
| Open-ended contract, no valid reason | The above plus damages equal to the seniority payments received |
| Fixed-term contract at expiry | Severance of at least 5% of total wages paid |
| Serious misconduct | Dismissal within 7 days of learning of it; unpaid wages and leave only |
- Final pay. Due within 48 hours of termination.
- Fixed-term renewals. A fixed-term contract over six months needs non-renewal notice, or it renews.
- Economic layoffs. Selection by ability and seniority, consultation with worker representatives, and a 2-year re-hire priority.
- Pregnancy and illness. Dismissal during maternity leave or illness-related suspension is prohibited.
Can I use independent contractors?
Only where the person genuinely runs their own business: their own clients, schedule and tools, invoicing for output rather than a fixed monthly fee. The Arbitration Council and courts look at who sets pay and hours, who can discipline and dismiss, and how far the person is integrated into the business. Misclassification can bring back NSSF contributions with interest, seniority payments and tax assessments. For anyone who works like an employee, an EOR is the compliant route.
The legal framework in brief
Cambodia is a civil law jurisdiction with one main employment statute, supplemented by ministerial Prakas. The instruments you will hear most:
- Labour Law 1997, as amended in 2007 and 2018. Contracts, probation, hours, leave, maternity, termination and the seniority payment.
- Prakas 442 and 443 of 2018. Twice-monthly pay and the seniority payment.
- Law on Social Security Schemes 2019. NSSF occupational risk, health care and pension; Joint Prakas 234/26 sets the new contributable wage range from November 2026.
- Law on Taxation. Tax on salary and fringe benefits; corporate tax of 20%.
- Data protection. No comprehensive law in force; a draft Law on Personal Data Protection completed validation in August 2026.
- Immigration and right to work. Work permits and employment cards through FWCMS, subject to a 10% foreign worker quota and annual renewal by 31 March.
- Authorities. Ministry of Labour and Vocational Training, General Department of Taxation, National Social Security Fund, Ministry of Commerce and the Council for the Development of Cambodia.
Where the talent is
About 17.3 million people at the 2024 census, with a working-age population of 13.1 million and unemployment of about 3% in the 2025 Labour Force Survey. Khmer is the official language and English is widely used in business and technology. Indochina Time is UTC+7 with no daylight saving, which overlaps the Asia Pacific and Gulf working day.
| Region | Talent and industry concentration |
|---|---|
| Phnom Penh | Capital; finance, technology, BPO and most professional employers |
| Siem Reap | Tourism and hospitality centre |
| Sihanoukville | Port city and special economic zone |
| Battambang | Agriculture and a second-tier city workforce |
Cambodia Implementation Kit
This page tells you the rules. The kit tells you what to do, in what order, and what goes wrong when you skip a step.
- Step-by-step checklist, from route selection to first payroll
- Labour Law contract essentials, probation and notice
- NSSF and tax on salary registration sequence with the monthly calendar
- Seniority payment schedule for June and December
- US dollar payroll and riel tax worksheet
- Foreign worker quota and work permit timeline
- Every official Cambodian authority with direct links
Hiring in nearby markets
Employer of record and hiring guides for other countries in Asia Pacific: China · Hong Kong · India · Indonesia · Japan · Kazakhstan · Malaysia · Nepal. See all global hiring guides or compare routes in EOR vs PEO vs entity.
This guide is general information, not legal, tax or immigration advice. The NSSF wage base, pension rates, minimum wage and tax deadlines change by Prakas and sub-decree, and a data protection law is in draft. Confirm current figures with a qualified adviser or with Dryft. Last reviewed November 2026.
Ready to hire in Cambodia?
Tell us who you want to hire and where they sit. You will get a cost model and a compliant route within a day, from a person who has done this before.