Laotian employees are protected by their government’s labor laws and regulations. The succeeding sections shall guide you through these provisions and ensure a smooth process when onboarding employees from the country
Employee Contract
Public and Provincial Holidays
Leave Information
Basic
Employment contracts that are in writing can be in any language preferred by the employee and employer.
Probation Period
The Probation period for employees is up to 60 days.
13th Month Pay
A 13th month salary is not compulsory in the country. However, it is common for companies to give bonuses for their employees.
Employee Benefits
Employers in Laos may provide the following benefits to their employees:
- Private health insurance.
- Meal vouchers.
- paid leaves.
The payroll cycle in Laos is usually monthly.
The National Minimum wage in Laos is LAK 1,200,000.
The standard working hours in Laos are 8 hours per day and 48 hours per week. Pay rate for overtime in Laos depends on the time and date that the extra work is performed. Below are the rates: Overtime work rates are 150% from 17:00 to 22:00 and 200% from 22:00 to 06:00 during the work day.
Employer Payroll Cost:
| Type of Tax |
Contribution Rate |
Notes |
| Social Security Contributions |
6% |
Capped at LAK 4.5 million |
Employee Payroll Cost:
| Type of Tax |
Contribution Rate |
Notes |
| Social Security Contributions |
5.5% |
Capped at LAK 4.5 million |
Employee Income cost
| Monthly income base (LAK) |
Basis of
computation (LAK)
|
Tax rate (%)
|
| From |
To |
|
|
| 0 |
1,300,000 |
1,300,000 |
0 |
| 1,300,001 |
5,000,000 |
3,700,000 |
5 |
| 5,000,001 |
15,000,000 |
10,000,000 |
10 |
| 15,000,001 |
25,000,000 |
10,000,000 |
15 |
| 25,000,001 |
65,000,000 |
40,000,000 |
20 |
| 65,000,001 |
and above |
- |
25 |
VAT
The standard rate of VAT in Laos ranges from 7% to 10%.
Termination can take place with notice periods given or pay in-lieu. Immediate termination can happen if the employee has:
- caused deliberate damage to the employer
- repeatedly violate internal regulations of the labor unit or contract after receiving a warning from his employer
- neglected one’s duty for 4 consecutive days
- been sentenced to court for offense deliberately committed against the labor unit
- violated the rights of other employees and has already been given a warning
The notice period for employees doing unskilled work is 30 days, and those doing skilled work is 45 days.
Severance pay
Severance pay in Laos is released under the following conditions:
| Circumstances |
Severance pay |
| Unjustified termination |
15% of the last monthly salary x number of months employed |
| No fault-based termination |
10% of the last monthly salary x number of months employed |
Foreigners living and working in Laos are required to secure a Labor Visa or LA-B2. The validity of the visa may be for 3 months, 6 months or a year.