Payroll and Benefits Guide Laos
Last updated: Mar 03, 2026
Contribution
| Employer Payroll Contributions | |
| 6.00% | Social Security |
| 1.00% | Skills Development Fund (SDF) |
| 7.00% | Total Employment Cost |
| Employee Payroll Contributions | |
| 5.50% | Social Security |
| 5.50% | Total Employment Cost |
| Income Tax | |
| 0% | 0 -15,600,000 LAK annually |
| 5% | 15,600,001-60,000,000 LAK annually |
| 10% | 60,000,001-180,000,000 LAK annually |
| 15% | 180,000,001-300,000,000 LAK annually |
| 20% | 300,000,001-780,000,000 LAK annually |
| 25% | Above 780,000,000 LAK annually |
Employer taxes
Working Hours
General
In Laos, the standard workweek is 48 hours, typically spread over six days, with a maximum of eight hours per day. This structure ensures that employees have at least one day off per week.
Overtime
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Maximum Ordinary Hours: The standard work limit is 8 hours per day and 48 hours per week (typically spread over six days). Any work performed beyond these hours is considered overtime.
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Note: For dangerous working conditions, the limit is reduced to 6 hours per day and 36 hours per week.
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Daily Overtime Cap: Overtime work is strictly limited to a maximum of 3 hours per day.
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Monthly Overtime Cap: Overtime work must not exceed 45 hours per month.
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Consecutive Overtime: An employee cannot work overtime for 4 consecutive days, except in cases of emergency (e.g., natural disasters or accidents).
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Consent: Employers generally need prior consent from the employee or their representative before assigning overtime work.
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Exemptions: Employees under the age of 18 cannot be forced to work overtime.
Mandatory Overtime Pay Rates
Overtime compensation is mandatory and is calculated as a minimum premium percentage of the employee’s regular hourly wage. The rates are highly tiered based on the time of day and the day of the week, with the highest rates applied for night work on holidays.
A. Overtime on Regular Working Days (Beyond 8 hours/day or 48 hours/week)
| Time Period | Minimum Compensation Rate (Multiplier) | Total Pay Rate | Notes |
| Daytime Overtime (e.g., 5:00 PM – 10:00 PM) | 150% (1.5 times) | 150% | Applies to hours worked after the ordinary workday. |
| Nighttime Overtime (10:00 PM – 6:00 AM) | 200% (2 times) | 200% | The rate is higher for overtime performed during the designated night period. |
B. Overtime on Weekly Rest Days or Public Holidays
The premiums are significantly higher for work performed on a Weekly Rest Day (typically Sunday) or an Official Public Holiday.
| Time Period | Minimum Compensation Rate (Multiplier) | Total Pay Rate | Notes |
| Daytime (6:00 AM – 4:00 PM) | 250% (2.5 times) | 250% | Applies to hours worked during the day on a rest day or holiday. |
| Evening (4:00 PM – 10:00 PM) | 300% (3 times) | 300% | The rate increases during the evening hours on a rest day or holiday. |
| Nighttime (10:00 PM – 6:00 AM) | 350% (3.5 times) | 350% | The highest mandatory rate, applied during night hours on a rest day or holiday. |
Other Mandatory Premiums (Cumulative)
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Night Shift Premium (Non-Overtime): Work performed during the night shift (between 10:00 PM and 6:00 AM) is entitled to a separate bonus payment of at least 15% of the employee’s standard hourly wages, even if the hours fall within the 48-hour standard week.
Payroll
Payroll Cycle
In Laos, the payroll cycle typically occurs once every month. Employees are paid their salaries and other benefits at the end of each month.
Some companies may also opt for a bi-monthly payment schedule, but this should be clearly outlined in the employment contract.
13th Salary
In Laos, 13th and 14th salaries are not legally mandated. However, some companies may choose to offer these bonuses as part of their compensation packages. Typically, a 13th-month salary, if provided, is equivalent to one month’s salary and is usually paid at the end of the year.
Leave
Annual Leave (Vacation)
In Laos, employees who have completed one full year of consecutive service are entitled to a minimum of 15 days of paid annual leave. For those working in sectors considered hazardous or dangerous to health, the entitlement increases to 18 days of paid annual leave.
PTO carryover
In Laos, statutory annual leave can be carried over, but only up to a legal limit (commonly up to 3 years, by agreement). Employers cannot forfeit accrued statutory leave with a blanket “use-it-or-lose-it” policy, and unused leave must be taken later or paid out on termination.
Public Holidays
In Laos, if a public holiday falls on a weekend, the following Monday is typically designated as a substitute holiday.
| Date | Day | Holiday | Notes |
|---|---|---|---|
| 1 January 2026 | Thursday | International New Year’s Day | Standard holiday |
| 8 March 2026 | Sunday | International Women’s Day | Standard holiday |
| 9 March 2026 | Monday | International Women’s Day Holiday | |
| 14 April 2026 | Tuesday | Lao New Year (Pi Mai Lao) Day 1 | Standard holiday |
| 15 April 2026 | Wednesday | Lao New Year (Pi Mai Lao) Day 2 | Standard holiday |
| 16 April 2026 | Thursday | Lao New Year (Pi Mai Lao) Day 3 | Standard holiday |
| 1 May 2026 | Friday | International Labour Day | Standard holiday |
| 22 May 2026 | Friday | Visakha Bucha (Visak Busa) | Standard holiday |
| 20 July 2026 | Monday | Lao Women’s Union Day | Standard holiday |
| 16 October 2026 | Friday | End of Buddhist Lent | Standard holiday |
| 14 November 2026 | Saturday | That Luang Festival (Vientiane) | |
| 2 December 2026 | Wednesday | National Day | Standard holiday |
Sick leave
Maternity Leave
In Laos, female employees are entitled to 90 to 105 days of paid maternity leave. At least 42 days of this leave must be taken after childbirth. In cases of multiple births, such as twins or triplets, the maternity leave entitlement extends to 120 days. Maternity leave is covered by the Social Security Fund if contributions have been fully paid. If the employee has not contributed to the social security fund, the leave will be covered by the employer.
Employer taxes
Termination
Termination Process
- Mutual Agreement: An employment contract can be terminated by mutual agreement between both parties.
- Dismissal: An employment contract may be terminated by dismissal if the worker lacks specialized skills, is not in good health, or if the employer needs to reduce the workforce to improve internal work.
- Restrictions: Employers cannot terminate an employee who is sick and undergoing medical treatment, pregnant or has given birth less than one year ago, on annual leave, performing work in another workplace as assigned, or involved in filing a complaint or lawsuit against the employer.
| Salary payment interval / date | Final payment on termination | Bank account payment requirement |
|---|---|---|
| Employees must be paid at least monthly, i.e., no less than once a month for monthly-paid staff. For more frequent arrangements (hourly/daily), payments should not be further apart than 16 days between payments. | When employment ends the employer must pay all earned wages and benefits (including unused leave and severance where applicable). The Labour Law states that the employer “shall … pay them the salaries they may have earned prior to termination and all other benefits prescribed by law and regulation”. | The law requires wages to be paid in monetary form and in Lao kip for most cases. |
Notice Period
- Indefinite Period Contracts:
- 30 days’ notice for primarily physical work.
- 45 days’ notice for skilled work.
- Fixed-Term Contracts:
- 15 days’ notice before the contract expires if the parties wish to continue working together.
- Dismissal Notice: During the notice period, the employee has the right to take at least one day of leave per week to seek new work while still receiving their normal salary or wages.
Severance Pay
- Calculation:
- 10% of the basic monthly salary for workers who have worked for less than three years.
- 15% of the basic monthly salary for workers who have worked for more than three years.
- Unjustified Termination: If the termination is unjustified, the employee can request reinstatement or be assigned to other appropriate work. If not reinstated, the employer must pay an allowance based on the duration of the employee’s work (15% for less than three years, 20% for more than three years).
Probation Period
- Duration:
- Up to 30 days for work that primarily uses physical labor.
- Up to 60 days for work requiring specialized skills.
- Termination During Probation: Either party can terminate the probation at any time with at least three days’ notice for non-skilled work and five days’ notice for skilled work.
- Salary During Probation: Workers receive at least 90% of the salary or wages for the work during the probation period.
Immigration
Steps to Obtain a Working Visa for Employees in Laos:
- Job Offer: Ensure you have extended a formal job offer to the candidate.
- Sponsorship: Provide a sponsorship letter for the employee.
- Document Preparation: Assist the employee in gathering the necessary documents:
- Valid passport
- Completed visa application form
- Signed employment contract
- Medical certificate
- Proof of travel arrangements
- Application Submission: Guide the employee to submit their application at the nearest Lao consulate or embassy before their arrival in Laos.
- Approval Process: Obtain approval from the Lao Ministry of Foreign Affairs on behalf of the employee.
- Visa Issuance: Once approved, the employee can collect their visa from the consulate or upon arrival in Laos.
The work visa, typically an LA-B2 visa, allows multiple entries and can be valid for three months, six months, or one year, with the possibility of renewal.
Minimum Wage
Minimum wage is set at LAK 2.5 million per month for workers in the private sector.
MINIMUM WAGE (PER MONTH)
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Public Holidays Calendar
| Date | Day | Holiday | Notes |
|---|---|---|---|
| 1 January 2026 | Thursday | International New Year’s Day | Standard holiday |
| 8 March 2026 | Sunday | International Women’s Day | Standard holiday |
| 9 March 2026 | Monday | International Women’s Day Holiday | |
| 14 April 2026 | Tuesday | Lao New Year (Pi Mai Lao) Day 1 | Standard holiday |
| 15 April 2026 | Wednesday | Lao New Year (Pi Mai Lao) Day 2 | Standard holiday |
| 16 April 2026 | Thursday | Lao New Year (Pi Mai Lao) Day 3 | Standard holiday |
| 1 May 2026 | Friday | International Labour Day | Standard holiday |
| 22 May 2026 | Friday | Visakha Bucha (Visak Busa) | Standard holiday |
| 20 July 2026 | Monday | Lao Women’s Union Day | Standard holiday |
| 16 October 2026 | Friday | End of Buddhist Lent | Standard holiday |
| 14 November 2026 | Saturday | That Luang Festival (Vientiane) | |
| 2 December 2026 | Wednesday | National Day | Standard holiday |
Questions & Answers