Following the recent minimum wage hike from US $ 140 per month to US $ 153, garment workers in Cambodia will also get tax-exemption on bonuses as declared by the Economy and Finance Ministry of Cambodia.
In a directive, Aun Porn Moniroth, Minister of Economy and Finance, Cambodia stated that allowances for transportation, accommodation, meals and health insurance will not be taxed applicable from 6th October 2016, in a bid to improve garment workers’ standards of living.
The Minister however mentioned that workers would still be liable to pay their salary tax and factories would need to file their employees’ bonuses to the tax department to be eligible for the tax exemption.
Also Read – Cambodia finalizes minimum monthly wages
According to the Cambodian Department of Taxation’s website, all resident employees in Cambodia have to pay an incremental amount of salary tax should they earn more than 800,000 Cambodian riels (about US $ 200). Those earning between US $ 200 and US $ 300 are liable for a five per cent salary tax, while those earning between US $ 301 and US $ 2,000 are liable for a 10 per cent tax.
While the site does not specify the guidelines for taxing bonuses, it does note that taxation of ‘fringe benefits’ of resident employees stand at 20 per cent, ‘the total value of fringe benefits given to all employees,’ adding that the ‘value of fringe benefits is the fair market value inclusive of all taxes.’
