Overview
Payroll Cycle
Employer Contributions
Employee Contributions
Minimum Wage
Hiring
Hiring Employees
Hiring Contractors
Hiring Expats
Background Checks
Employment Contracts
Onboarding
Employee Benefits
Social Security
Healthcare and Insurance
Leave Policy
Public Holidays
Work Permit and Work Visa
Probation Period
Notice Period
Termination and Severance
Personal Income Tax
When establishing an employer of record in Laos, various aspects need to be considered, including the payroll cycle, employer and employee contributions, minimum wage requirements, hiring procedures for employees, contractors, and expats, background checks, employment contracts, onboarding processes, employee benefits, social security, healthcare and insurance, leave policies, public holidays, work permits and visas, probation periods, notice periods, termination and severance regulations, as well as personal income tax obligations.
| Overview | |
| Continent | Asia |
| Country | Laos |
| Capital | Vientiane |
| Time zone | UTC+07:00 |
| Total Time zones | 1 |
| Personal Tax filing deadline | 31st March |
| Financial Year | 1 October – 30 September |
| Date format | dd/mm/yyyy |
| Currency | Lao Kip (LAK) |
| VAT | the standard rate is 10% |
Employer Payroll Contributons in Laos
| Employers | % of Gross Salary |
| Social Security | 6%. The maximum base salary to be used in the calculation is capped at LAK 4.5 million. The maximum contribution will be LAK 270,000 per month per employee. |
| Total Employment Cost | 6% |
Employee Payroll Contributons in Laos
| Employees | % of Gross Salary |
| Social Security | 5.5% |
| Total Employee Cost | 5.5% |
Minimum Wages in Laos
| Minimum Wage | |
| Minimum Wage | 800,000 Lao Kip per month ($100) plus 30,000 Kip per day as a meal allowance ($3.74). |
Payroll Cycle in Laos
| Payroll | |
| Payroll Cycle | Monthly |
| 13th Salary | No 13th salary. |
Personal Income Tax in Laos
| Income Tax | |
| 0 - 1300000 LAK | 0% |
| 1300001 - 5000000 LAK | 5% |
| 5000000 - 15000000 LAK | 10% |
| 15000001 - 25000000 LAK | 15% |
| 25000001 - 65000000 LAK | 20% |
| 65000001 LAK and above | 25% |
Worker Categories in Laos:
- Employee: An employee is an individual who works under the management of an employer and receives compensation in the form of salary or wages, including legally mandated benefits. The Labour Law (Article 3) defines the criteria for identifying an employee.
- Household Employee: Household employees are those who work in other people's households under a specific contract. The contract outlines their duties, daily working hours, salary, payment terms, and residency terms (Article 3, Labour Law).
- Independent Contractor: The provisions of the Labour Law do not apply to independent contractors. To determine if someone is an independent contractor, factors such as the level of management or supervision, the presence of a service contract, and specific contractual provisions need to be considered. These provisions can help distinguish an independent contractor relationship and mitigate the risk of it being classified as an employment contract (Article 449, Civil Code).
Entitlement to Statutory Employment Rights:
Employee: The Labour Law recognizes skilled and unskilled employees, but the distinction is not clearly defined. Various provisions, including termination notice periods, may differentiate between skilled and unskilled employees. The distinction between full-time and part-time employees does not exist under the law. Statutory employment rights and protections are extensive, covering aspects such as termination and amendment of employment contracts.
Household Employee: Household employees are explicitly excluded from the application of the Labour Law, and therefore, their entitlement to statutory employment rights may differ.
Independent Contractor: Independent contractors are not entitled to statutory employment rights under the Labour Law.
Time Periods: There are no maximum duration limits for any category of worker specified by the law. The length of engagement for employees, household employees, and independent contractors is not subject to specific legal restrictions.