Cambodia operates a tax system that includes obligations for both employers and employees. Understanding these requirements is crucial for companies operating within the country, whether they are local entities or foreign businesses employing staff. The primary taxes and contributions related to employment are the Tax on Salary and contributions to the National Social Security Fund (NSSF).
Compliance with Cambodian tax and social security regulations involves monthly withholding and reporting obligations for employers, as well as annual declarations. These requirements ensure that employees' income tax is correctly remitted and that social security contributions are made to cover benefits like occupational risk, healthcare, and pensions.
Employer Social Security and Payroll Tax Obligations
Employers in Cambodia are responsible for contributing to the National Social Security Fund (NSSF) on behalf of their employees and for withholding and remitting Tax on Salary.
The NSSF covers several schemes, including Occupational Risk, Health Care, and Pension. Contribution rates are typically calculated as a percentage of the employee's monthly salary, up to a certain ceiling. Both the employer and the employee contribute, although the employer is responsible for remitting the total amount.
Specific NSSF contribution rates applicable for 2025 are expected to be:
| Scheme | Employer Rate | Employee Rate | Total Rate | Salary Ceiling (KHR) |
|---|---|---|---|---|
| Occupational Risk | 0.8% | 0% | 0.8% | No ceiling |
| Health Care | 2.6% | 2.6% | 5.2% | 1,200,000 |
| Pension | 4% | 4% | 8% | 1,200,000 |
Note: The Pension scheme implementation and rates are subject to government directives and may evolve.
Employers must also calculate and withhold the Tax on Salary from their employees' gross monthly income based on progressive tax rates. This withheld amount is then remitted to the General Department of Taxation (GDT).
Income Tax Withholding Requirements
Employers are required to withhold Tax on Salary from the monthly remuneration paid to their employees. The tax rates are progressive, meaning higher income is taxed at higher rates. The rates differ for resident and non-resident taxpayers.
For resident employees, the monthly Tax on Salary rates applicable for 2025 are:
| Monthly Taxable Salary (KHR) | Tax Rate |
|---|---|
| 0 - 1,500,000 | 0% |
| 1,500,001 - 2,000,000 | 5% |
| 2,000,001 - 8,500,000 | 10% |
| 8,500,001 - 12,500,000 | 15% |
| Above 12,500,000 | 20% |
For non-resident employees, a flat tax rate applies to their Cambodian-sourced income.
The flat Tax on Salary rate for non-resident employees applicable for 2025 is:
| Monthly Taxable Salary (KHR) | Tax Rate |
|---|---|
| All income | 20% |
Taxable salary includes not only the basic wage but also various allowances, bonuses, and benefits in kind, with specific rules for calculating the taxable value of non-cash benefits.
Employee Tax Deductions and Allowances
While the Tax on Salary is calculated on gross income, Cambodian tax law allows for certain deductions and allowances that reduce the taxable base for resident employees. Non-resident employees are generally not eligible for these deductions.
Common deductions and allowances for resident employees applicable for 2025 include:
- Dependent Children Allowance: A fixed amount per dependent child (under 18 or studying, up to 25) residing in Cambodia.
- Dependent Spouse Allowance: A fixed amount if the spouse is not earning income.
- Taxpayer Allowance: A standard personal allowance for the taxpayer.
These allowances are deducted from the gross monthly salary before applying the progressive tax rates. The specific amounts for these allowances are subject to annual government announcement and should be confirmed for the 2025 tax year.
Tax Compliance and Reporting Deadlines
Employers in Cambodia have strict monthly and annual reporting obligations.
- Monthly Declaration: Employers must calculate, withhold, and pay the Tax on Salary and NSSF contributions by the 20th of the following month. A monthly declaration form must be submitted to the GDT detailing the salaries paid, tax withheld, and NSSF contributions.
- Annual Declaration: Employers are required to file an annual declaration of Tax on Salary by the 31st of March of the following year. This declaration summarizes the total salaries paid, tax withheld, and NSSF contributions for the preceding calendar year.
Failure to comply with these deadlines can result in penalties and interest charges.
Special Tax Considerations for Foreign Workers and Companies
Foreign individuals working in Cambodia are subject to Tax on Salary. Their residency status determines the applicable tax rates (resident or non-resident) and eligibility for deductions. An individual is generally considered a resident taxpayer if they are present in Cambodia for more than 182 days in any 12-month period.
Foreign companies operating in Cambodia, even without a registered branch or subsidiary, may have employer obligations if they have employees working within the country. In such cases, they may be required to register with the GDT and NSSF as an employer and fulfill the withholding and contribution requirements. Utilizing an Employer of Record (EOR) service is a common strategy for foreign companies to manage these obligations compliantly without establishing a local entity. Regional variations in tax rates are not applicable to Tax on Salary or NSSF contributions; the rates are uniform across Cambodia.
