Hiring a local employee in Cambodia

In 3 bullets

• Hiring a Cambodian requires a written contract (a fixed-duration FDC, ≤ 2 years cumulated, or an undetermined-duration UDC), declaring the employee to the MLVT, and registering them with the NSSF within 30 days.
• You must withhold Tax on Salary (ToS) at source and remit it to the GDT, contribute to the NSSF, and provision the seniority indemnity (15 days’ wages/year, paid in June and December since the 2019 reform).
• There is no economy-wide minimum wage: only the textile / garment / footwear / travel-goods sector has a legal minimum (USD 210/month in 2026, to verify annually).

Legal framework

Hiring a Cambodian employee falls under the Labour Law (Royal Code CS/RKM/0397/01 of 13 March 1997) and its Prakas (ministerial orders) from the MLVT. The law applies to every employee working on Cambodian soil, regardless of the employer’s nationality: a foreign company, a branch, an NGO or a sole proprietor that pays a Cambodian becomes an employer under Cambodian law.

On the employee side, the matching rights (hours, leave, NSSF, indemnities) are detailed in the employee rights guide; contract types and form in the employment contract guide. This guide looks at the same relationship from the employer’s side: what you must set up and declare.

Choosing the contract type: FDC or UDC

• Beyond 2 cumulated years as an FDC, or if the employee keeps working past the end date without a new contract, the FDC automatically becomes a UDC.
• Stacking successive FDCs to dodge the UDC is re-qualified by the Arbitration Council. If you plan to keep the employee long-term, sign a UDC from the start.

Mandatory clauses and re-qualification are detailed in the employment contract guide.

Probation period

Article 68 of the Labour Law caps the probation period, which is non-renewable:

During probation, either party may terminate freely, without notice or indemnity. Beyond the legal cap, the employee is deemed confirmed and acquires all rights (notice, seniority indemnity).

Minimum wage: textile only

There is no economy-wide minimum wage in Cambodia. Only the textile, garment, footwear, travel-goods and bag sector has a legal minimum, set yearly by MLVT Prakas on the recommendation of the National Council on Minimum Wage:

• 2026: USD 210/month for a regular worker, USD 208/month during probation (Prakas No. 214 of 17 September 2025, effective 1 January 2026).
• 2025: USD 208/month (regular) — the figure is revised annually, check the current value on minimumwage.gov.kh.
• In that sector, mandatory allowances (transport, attendance, meals) and a monthly seniority bonus are added.

Your declaration duties on hiring

Once the contract is signed, the employer must, in order:

1. Help the employee obtain their work book and declare the hire via a staff-movement declaration to the MLVT — handled on the ministry’s online systems (mlvt.gov.kh).
2. Register the employee with the NSSF within 30 days of hiring (enterprise registration on the first employee, then nominative declaration). See the NSSF employer guide.
3. Set up ToS withholding (Tax on Salary) on payroll and remit it monthly to the GDT. See the Tax on Salary (ToS) guide.
4. Keep a staff register and a time register — required in a labour-inspection check (the MLVT enterprise self-declaration system).

Employer contributions and charges

NSSF (social security)

Three branches managed by the NSSF, on a salary capped at 1,200,000 KHR/month (≈ USD 295):

The employer declares and pays contributions monthly (Form 2.01) and gives the employee their NSSF card (access to contracted hospitals). Detail in the NSSF guide.

Tax on Salary (ToS) — withheld at source

The employer withholds ToS on gross salary (progressive schedule 0 to 20% for residents) and remits it to the GDT by the 20th of the following month. Benefits in kind (housing, car) are taxed at 20% flat (Fringe Benefit Tax), borne by the employer. Brackets and examples in the Tax on Salary (ToS) guide.

Seniority indemnity (to provision)

Since the Labour Law amendment (2018 reform, applicable from 2019, Prakas No. 443/19), the old dismissal indemnity is replaced by a seniority indemnity paid twice a year by the employer, regardless of the reason for ending the contract:

• 15 days of wages per year of work, i.e. 7.5 days paid in June and 7.5 days paid in December.
• Back-pay for seniority accrued before 2019:
  • Non-textile sectors: 6 days/year of back-pay (3 days in June + 3 days in December), capped at 6 months of wages in total.
  • Textile / footwear sector: 30 days/year (15 + 15).
• Seniority is calculated per semester (January-June, then July-December).

Working hours, overtime and leave

The employer must respect the general regime (detailed on the employee side in the employee rights guide):

• 48 hours/week maximum (8 h/day, 6 days), weekly rest of 24 consecutive hours.
• Overtime: +50% daytime on weekdays, +100% at night, on Sundays and public holidays. Cap 2 h/day unless MLVT authorises more.
• Paid leave: 1.5 working days per month worked = 18 days/year minimum (Art. 166), +1 day per 3 years of seniority.
• Public holidays: ≈ 22 days/year, set by annual royal decree.
• Maternity leave: 90 days paid at 50% by the employer, for an employee with ≥ 1 year of seniority (Art. 182); no dismissal during the leave.

Ending the contract

• Notice owed by the employer (UDC), by seniority (Art. 75): 7 days (< 6 months), 15 days (6 months-2 years), 1 month (2-5 years), 2 months (5-10 years), 3 months (> 10 years).
• A valid reason is mandatory (misconduct, aptitude, economic ground); without one, termination is unfair and exposes you to damages awarded by the Arbitration Council.
• At exit, the employer settles: the current semester’s seniority indemnity, unused paid leave, and the end-of-contract indemnity (5%) if it was an FDC.

Common pitfalls

FAQ

Can a foreign company with no office hire a Cambodian?

Not directly on a lasting basis: to declare an employee to the MLVT and the NSSF you need a registered entity in Cambodia (branch, representative office with staff, or Co. Ltd.). Otherwise, the route is a local payroll / employer-of-record company.

What does an employee really cost beyond gross salary?

Count the gross + employer NSSF contributions (≈ 0.8% to 2.1% depending on activated branches, capped at 1.2M KHR) + the seniority-indemnity provision (≈ 1 month of salary/year) + admin cost (payroll, filings). ToS is withheld from the employee’s salary, not on top.

Must I pay the salary in riel or in dollars?

The law does not mandate the riel, and USD is widely used. ToS is, however, computed and remitted in KHR at the daily NBC rate. The salary must be paid at least once a month and in cash.

Can I hire someone working in Cambodia on a foreign fixed-term contract?

No: as soon as the activity is physically carried out in Cambodia, Cambodian Labour Law applies (local contract, MLVT, NSSF, ToS). A foreign contract is no exemption and exposes you to social and tax reassessment.

What to do in a dispute with an employee?

First step: conciliation at the Ministry of Labour (free, a few weeks). If it fails, the Arbitration Council issues a fast ruling — the most-used route for termination disputes.