Setting up and managing a payroll in Cambodia
Cambodia is a centrally located Southeast Asian country with a fascinating history and growing economy. It is finally shaking off its difficult past and becoming a promising destination for foreign investment and business expansion.
If you are interested in expanding your organization into Cambodia’s exciting marketplace, then an important step is to set up a Cambodia payroll outsourcing system and start hiring staff locally. This can be beneficial in a number of ways, but can also present many roadblocks to expansion. Language barriers, unclear administrative procedures, and changing regulations can all cause delays, potentially adding significantly to your organization’s running costs.
A popular solution to this difficulty is begin the process of implementing Cambodia payroll outsourcing and transitioning setup and management to a global PEO. At Horizons, our team specializes in helping organizations expand into Cambodia as smoothly as possible. We’ll handle your Cambodia payroll outsourcing setup and management, whether or not you already have an established presence in the country.
Why choose the Horizons payroll solution?
If you have an entity
If your organization already has a registered entity in Cambodia, then we can help you with the next steps.
Our team will set up and manage your payroll, as well as any associated HR and compliance work to help you focus on the job of expanding your operations.
If you don’t have an entity
If your organization has yet to register an entity in Cambodia, then we can provide a comprehensive service to get you up and running in the country. We’ll use our PEO in Cambodia to act as employer of record for your hires so you don’t have to go through the complex process of establishing an entity.
Additionally, we will set up and manage your Cambodia payroll outsourcing process, handle HR, compliance, and any other associated work to make your expansion simpler and low risk.
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Cambodia payroll guide
What are the withholdings and tax regulations in Cambodia?
Cambodia has a social security fund, which employers must contribute to at a rate of 0.8% of salary.
As for employees, they are taxed using a progressive system where higher earners pay a higher percentage of their income.
The income tax rate varies, with a top rate of 20%. Employers must withhold these payroll taxes from the employees’ salaries and declare then to the tax authorities.
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Health Insurance
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2.6%
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National Social Security Fund
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0.8%
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Total Employment Cost
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2.1% |
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0-1,300,000 KHR
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0.0%
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1,300,001-2,000,000 KHR
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5.0%
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2,000,001- 8,500,000 KHR
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10.0%
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8,500,001- 12,500,000 KHR
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15.0%
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12,500,000 KHR and over
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20.0%
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Employee entitlements and terminations
As with any country, it’s strongly advisable for any employer to produce a formal contract of employment for every employee before hiring. This contract should clearly set out the terms of employment, with any entitlements such as maternity leave, sick pay, and vacation.
For terminations, non-fixed-term contracts can be terminated by employees at any time, but the employers must provide a proper cause.
Written notice must also be provided for terminations, and employees are usually entitled to minimum severance pay of 5% of total wages.
How to establish Cambodia payroll outsourcing
To begin with, your organization will need to establish an entity within the country. Then, you must enroll with the Ministry of Commerce to get a business license. Furthermore, you will likely need to register with the tax office, social security fund, and several other institutions depending on your line of business.
The initial payroll compliance process can take weeks or even months to complete, which could significantly hinder your expansion timeline and cut into operating costs.
Horizons can help you to avoid this lengthy and complicated process, providing comprehensive Cambodia payroll setup and management outsourcing in Cambodia. Beyond this, our experts will handle your in-country HR, compliance, and tax, and we can even act as your employer of record if you don’t have an entity in the country. Outsourcing to Horizons can save you time, effort, and money, setting you up for a successful expansion into Cambodia.
Manage payroll in Cambodia
Whether it’s EOR service or just payroll management, Horizons’ employment experts can help you get started in 24h.
