Under the Circular No.003 MEF.GDT dated April 11, 2019 (Circular No.003), any seniority payments to Cambodian employees are exempt from TOS. But the seniority payments to expatriate employees are subject to TOS.
Recently, the Ministry of Economy and Finance (MEF) issued another Circular No.002 MEF.GDT dated March 24, 2020 (Circular No.002) on TOS Exemption on the 2020 Seniority Payment, which is summarized as follows-
1. The seniority payments for the years prior 2019 and 2019 are still covered under the Circular No.003.
2. The seniority payments from 2020 onward that don’t exceed KHR 4,000,000 (of USD1,000) is exempt from TOS. But the portion of the seniority payments that exceeds KHR 4,000,000 per annum is subject to TOS. If the seniority payments are made twice per annum, the TOS should be calculated as follows-
- - First payment: Taxpayers shall deduct KHR 2,000,000 from the total entitled seniority payment. Then, include the remaining seniority payment amount in the monthly salary base for TOS calculation purposes at the time of the payment.
- - Second payment: Follow the same approach under the first payment.
3. The seniority payments shall be allowed for a deduction for Tax on Income (TOI) purposes when the amount is paid.
Notification no. 018/20 MOLVT.S.Ch.N.Kh.L dated June 02, 2020 on the Postpone of Back Payment of Seniority Indemnity Prior to 2019 and New Seniority Indemnity in 2020 until 2021.
B. Statutory Compliance Release Date: March 24, 2020
C. Effective Date: June 30, 2021
1. The Ministry of Labour and Vocational Training has issued the letter to respond the Cambodian Federation of Employers and Business Associations (CAMFEBA) that the annual leave for workers who work less than 21 days per month shall be determined by prorated calculation.
|Number of Days Worked (Month)||Number Of Days (Annual Leave)|
|More than 21 days||1.5 days|
|15 days to 20 days||1 day|
|Less than 15 days||NA|
2. Special leave shall be granted during the event directly affecting the worker's immediate family. If the worker has not yet taken his annual leave, the employer can deduct the special leave from the worker's annual leave. The replacement work shall be made within the workdays and shall not be more than 10 hours per day or 54 hours per week. The replacement can be made up to 6 hours a week and entitled to normal hourly rate. In the event that the employees/workers work more than 54 hours per week, employer shall provide them the overtime wage as determined by Labor Law.
B. Statutory Compliance Release Date: March 30, 2020
C. Effective Date: February 21, 2020
The Royal Government of Cambodia has released a new sub-decree on a new taxable monthly salary for resident employees. The new progressive tax rate for resident employees is as follows:
|Sr.No||Monthly salary (KHR)||Monthly salary (USD)*||Tax rate (%)|
|1||0 to 1,300,000||0 - 325||0|
|2||1,300,001 to 2,000,000||326 - 500||5|
|3||2,000,001 to 8,500,000||501 – 2,125||10|
|4||8,500,001 to 12,500,000||2,126 – 3,125||15|
|5||Over 12,500,000||Over 3,126||20|
* Assumption: 1USD =KHR4,000