Deduction from Salary in Cambodia

Individuals are classified either as resident or non-resident taxpayers. Resident taxpayers are taxed on their worldwide salary income. Income tax for resident taxpayers is calculated by applying a progressive tax rate schedule, from 5% to a maximum of 20%. Income tax for non-resident taxpayers is taxed only on Cambodian-sourced salary income, and at a flat rate of 20%. Employment income is subject to salary tax. The individual is not required to submit tax returns. Employers and employees are jointly responsible for the payment of tax on salary in Cambodia. nsidered a final tax.

An individual is considered a tax resident if:

• The individual has a residence in Cambodia

• Has a principal place of abode in Cambodia; or

• The individual is present in Cambodia for more than 182 days during the 12 months period ending in the current tax year

As a general rule, it can be stated that all types of remuneration and benefits received by an employee within the framework of fulfilling employment activities constitute taxable income. These include wages and salary, bonuses, overtime, and other remuneration. Income chargeable to the personal income tax is called "assessable income". The term covers income both in cash and in kind. Therefore, any benefits provided by an employer or other persons, such as a rent-free house or the amount of tax paid by the employer on behalf of the employee, are also treated as assessable income of the employee for the purpose of the income tax. Certain deductions and allowances are allowed in the calculation of the taxable income. Taxpayers shall make deductions from assessable income before the allowances are granted.

The simple formula for calculation would be:
Taxable Income = Assessable income – deductions – allowances