Employee or Consultant

Tax for Employee and Consultant

For Cambodia Tax, you should understand difference between employees and consultants.

If they performed services to our company and they are employees, so they are subject to Tax on Salary, but if they are individual consultants, so they are subject to withholding tax on service 15% or 14% for non-resident.

If any physical person is employed in accordance with any two of the following conditions, he/she shall be considered as an employee and is subject to Tax on Salary (ToS):

1. There is no risk of not being paid for employment services if the physical person does come to work at the place determined and perform his/her duties as stated on a general employment contract whether orally or in writing.
2.  The physical person cannot determine the time and place for fulfilling the employment activities by himself.
3. The physical person does not need to spend large capital in buying equipment for use in his/her employment activity.
4.  The physical person does not perform his/her employment activities for many persons at a time.

If physical persons did not meet criteria above, they may classify as consultants, so individual consultant or service providers will be subject to withholding tax on service.