Understanding market competitive salaries is crucial for both employers and employees in Cambodia. Offering competitive compensation attracts and retains top talent, while employees can ensure they are fairly valued for their skills and experience.

Factors Affecting Market Competitive Salaries

Different factors influence the market competitive salaries in Cambodia. These include:

• Industry: Different industries have varying salary levels. For instance, Chief Executives, IT workers, and Managers generally command higher salaries.
• Experience & Skills: Employees with extensive experience and specialized skills typically earn more than those with less experience or a more general skillset.
• Education: Educational qualifications often play a role in determining salary.
• Location: Salaries can differ based on geographic location. For example, employees in Phnom Penh, the capital city, may earn more than those in rural areas.
• Company Size & Reputation: Larger, well-established companies might offer higher salaries and benefits packages compared to smaller firms.

Finding Market Competitive Salaries

There are several ways to find information about market competitive salaries in Cambodia:

• Salary Surveys: Reputable firms conduct salary surveys in Cambodia. These surveys provide valuable insights into compensation trends across various industries and job roles.
• Job Boards: Many online job boards in Cambodia list salaries alongside job postings. While not always an exact reflection of market rates, they provide a general idea of salary ranges for specific positions.
• Networking: Talking to colleagues in similar fields or recruiters can give you a sense of what constitutes a competitive salary in your industry and experience level.

In Cambodia, a legally mandated minimum wage is established under the Labour Law of 1997. The Labour Advisory Committee (LAC), a tripartite body comprising representatives from workers' unions, employers' organizations, and the government, plays a central role in the minimum wage setting process. The LAC leads discussions and recommends minimum wage adjustments to the government. When necessary, the LAC can establish a technical working group with equal representation from all three parties to gather data, analyze economic and social factors, and formulate recommendations.

Minimum Wage Determination Criteria

The Labour Law outlines specific factors considered when setting the minimum wage. Social and economic factors such as living costs, inflation rates, and economic growth all play a role in determining a minimum wage that meets basic needs while considering economic sustainability. Cambodia adheres to the ILO Minimum Wage Fixing Convention, 1970 (No. 131), which emphasizes considering the needs of workers and their families, along with economic factors.

Minimum Wage Disbursement

The minimum wage is typically announced by the Ministry of Labour and Vocational Training through a Prakas (ministerial decree). The most recent Prakas, No. 283, came into effect on January 1, 2024. The minimum wage applies on a monthly basis and is differentiated for regular workers and probationary workers. As of January 1, 2024, the minimum wage for regular workers is US$204 per month, and for probationary workers, it's US$202 per month. For workers paid based on piece rates (production output), their earnings must still meet the minimum wage threshold. If their piece-rate earnings fall below the minimum wage, their employer must adjust their compensation to reach the minimum level.

Additional Considerations

Minimum wage regulations in Cambodia may be subject to revisions based on economic conditions and recommendations from the Labour Advisory Committee.

In Cambodia, employers often provide various bonuses and allowances to attract and retain talent.

Monetary Bonuses

• 13th Month Pay: A popular year-end bonus equivalent to one month's base salary. While not mandated by law, it has become a customary practice in many organizations.
• Performance-Based Bonuses: Companies may offer bonuses tied to individual or company performance metrics, incentivizing productivity and achieving set goals.

Allowances

• Overtime Pay: Cambodian labor law mandates overtime pay for hours exceeding the standard workday or workweek. The rate is typically 1.5 times the base salary for weekdays and 2 times the base salary for Sundays and public holidays.
• Transportation Allowance: To offset commuting costs, employers may provide a transportation allowance or subsidize transportation arrangements.
• Meal Allowances: Some companies may offer meal allowances to help cover employees' meal expenses during work hours.
• Housing Allowances: In some cases, employers, particularly in larger cities, may provide housing allowances to ease employees' accommodation costs.
• Other Allowances: Depending on the industry and company, additional allowances like phone allowances, uniform allowances, or allowances for professional development might be offered.

The specific types and amounts of bonuses and allowances can vary significantly depending on the employer, industry, and employee's position and negotiation leverage. It's always advisable to consult the employment contract or company policy for a clear understanding of the offered benefits package.

In Cambodia, payroll cycle practices involve the timeframe for salary payments and adherence to legal regulations. The most common practice involves a monthly payroll cycle, with salaries paid on the last working day of the month. However, there's legal flexibility.

Frequency of Payment

Laborers, which can encompass daily or weekly paid workers, must be paid at least every 16 days. This ensures they receive their wages more frequently than in a strictly monthly cycle.

Salary Payment Methods

While cash payments are still practiced in some instances, they are gradually becoming less common. The growing trend favors electronic bank transfers, offering increased security and transparency for both employers and employees.

Additional Considerations

If the designated payday falls on a public holiday, the employee's salary must be paid on the preceding working day. While not directly related to the payroll cycle, it's important to note that for employees under unfixed-term contracts, Cambodian law mandates seniority payments. These payments are made every six months and amount to 15 days' worth of wages and fringe benefits per year of service.