Annual Leave Entitlement in Cambodia: Labour Law 1997 Guide

Cambodia’s Labour Law 1997 hands every employee a clearly defined annual leave floor — 18 consecutive working days per year — and the way it accrues, at 1.5 days per month of service, makes the entitlement one of the most straightforward in Southeast Asia to administer once you understand the rules. International employers setting up operations in Phnom Penh or managing a remote Cambodian team for the first time often underestimate two things: the word “consecutive” in Articles 165–173 is legally significant, and the obligation to pay out unused leave on termination is not optional. This guide covers everything you need to stay compliant with Cambodian annual leave law in 2026.

Key Takeaways

• The statutory minimum is 18 consecutive working days of paid annual leave per year under Labour Law 1997, Articles 165–173.
• Leave accrues at 1.5 days per month of service.
• Employees must have completed at least one year of continuous service to be entitled to the full annual leave.
• Employers must pay normal wages during annual leave and pay out any unused leave on termination — this is a statutory requirement, not a matter of policy.
• “Consecutive working days” means the leave block runs without interruption; employers cannot split it arbitrarily into isolated days unless agreed with the employee.

The Statutory Entitlement

Cambodia’s annual leave entitlement sits in Articles 165 to 173 of the Labour Law 1997 — the central piece of legislation governing employment conditions for workers in the Kingdom of Cambodia. Under those articles, every employee employed under a formal employment contract is entitled to 18 consecutive working days of paid annual leave for each complete year of service.

The word “consecutive” matters in practice. Cambodian law uses it to describe the character of the leave block: it should run as an unbroken period of working days rather than being scattered into isolated single days by the employer without the employee’s agreement. This differs from some regional systems — compare it with annual leave in Malaysia, where the statutory minimum is 8 days for the first two years rising to 16 days, or annual leave in Thailand, which guarantees 6 days per year with a different accrual model.

The 18-day figure is a floor. Employers can and do offer more generous entitlements in employment contracts or collective bargaining agreements, but they cannot offer less.

How Leave Accrues

Annual leave in Cambodia does not arrive in one lump sum on the employee’s anniversary date. Instead, it accrues at the rate of 1.5 days per month of completed service. After twelve months, the running total reaches the statutory 18 days.

This monthly accrual model has a practical consequence: an employee who leaves before their first anniversary has accrued partial leave — for example, six months of service represents 9 accrued days. When employment ends, those accrued days must be paid out regardless of how long the person worked.

The monthly accrual approach is common across the ASEAN region. For comparison, Vietnam’s annual leave entitlement uses a similar per-month accrual structure, as does Indonesia’s annual leave framework, though both differ in their minimum totals and eligibility conditions.

Eligibility

To receive the full 18-day annual leave entitlement, an employee must have completed at least one year of continuous service with the same employer. This is the standard eligibility threshold under the Labour Law 1997.

Employees who have not yet reached the one-year mark are not excluded from leave entitlements entirely. The monthly accrual model means they accumulate leave from the moment employment begins, but the full 18-day block is not accessible until that twelve-month anniversary passes. Employers who want to grant leave before the anniversary date may do so, but the statutory floor only kicks in once the qualifying period is complete.

Part-time workers employed under formal contracts are generally covered by the Labour Law 1997, though the calculation of their entitlement depends on the terms of their specific contract.

Employer Obligations

The Labour Law 1997 places three clear obligations on employers in relation to annual leave:

1. Grant 18 working days of paid annual leave per year. Employers must ensure that every eligible employee has the opportunity to take their statutory annual leave within each year. Leave cannot be withheld as a disciplinary measure or permanently rolled over without being taken.
2. Pay the employee’s wages during annual leave. Employees must receive their normal wages for every day of annual leave they take. Unpaid leave schemes that substitute for paid annual leave entitlements are not compliant with the Labour Law 1997.
3. Pay for unused annual leave on termination. This is the obligation that most commonly catches out international employers. If employment ends — whether through resignation, dismissal, or redundancy — any accrued but unused annual leave must be paid out in cash at the employee’s normal daily wage rate. This is a statutory requirement, not a contractual nicety.

Common Pitfalls

Not paying out unused leave on termination. This is the single most common compliance failure. Some employers treat unused leave as forfeited on exit. Cambodian law does not allow this. Accrued, unused annual leave is a wage debt owed to the departing employee and must be settled at termination.

Confusing calendar days with working days. The 18-day entitlement is in working days, not calendar days. A three-week calendar block would include weekends and public holidays that do not count toward the 18 working days. Tracking leave in working days is essential to avoid under-granting entitlements.

Splitting consecutive leave into isolated days without agreement. Because the law describes the leave as “consecutive,” employers who unilaterally schedule leave as scattered single days throughout the year may be acting outside the spirit — and potentially the letter — of Articles 165–173. Where operational needs require split leave, the split should be agreed with the employee.

Assuming the one-year threshold eliminates all accrued leave. The one-year eligibility threshold governs access to the full 18-day block, but it does not cancel accrued leave on termination before the anniversary. An employee who works for eight months and then resigns has accrued 12 days (8 × 1.5) that must be paid out.

Frequently Asked Questions

Does annual leave in Cambodia carry over to the following year? The Labour Law 1997 does not explicitly provide for unlimited carry-over. Employers should ensure employees can actually take their leave within each leave year. Any carry-over arrangements should be set out in an employment contract or HR policy to avoid disputes.

What happens to annual leave if an employee is dismissed? Any accrued but untaken annual leave must be paid out as a lump sum at termination, regardless of the reason for dismissal. This applies to resignation, redundancy, and termination for cause alike.

Are public holidays counted within the 18 days of annual leave? No. Cambodia’s public holidays — of which there are a significant number — are separate entitlements governed by different provisions. They do not reduce the 18-day annual leave entitlement.

Can an employer require an employee to take annual leave at a specific time? The employer has some discretion in scheduling annual leave, but the schedule should account for the employee’s preferences. An employer cannot permanently defer leave such that the employee effectively never takes it.

Is the 18-day entitlement based on a calendar year or an employment anniversary? Cambodian practice typically ties annual leave to the employment anniversary (the date the employee started), rather than a fixed calendar year. Employers running a unified leave year across the workforce should reflect this in their HR policy.

What is the daily wage rate for leave pay purposes? Leave pay is calculated at the employee’s normal daily wage. For employees paid a monthly salary, the daily rate is typically the monthly salary divided by the number of working days in the month. Commissions and variable elements may or may not be included depending on the employment contract.

How Leave Balance Helps

Tracking 1.5-day monthly accruals, enforcing the one-year eligibility threshold, and calculating termination pay-outs across a mixed workforce in Cambodia can be tedious to manage in spreadsheets — especially when you also have teams in Thailand, Vietnam, Indonesia, or Malaysia governed by different rules. Leave Balance handles the policy configuration for each country separately, so you can set the Cambodian accrual rate and eligibility period once and let the system calculate balances automatically.

Every plan includes unlimited employees and unlimited leave policies at a flat rate of $10 per month (USD). There are no per-user fees and no feature paywalls. Small teams and growing businesses in Cambodia and across ASEAN get the same functionality as large enterprises, without the per-seat pricing model that makes regional HR tools expensive to scale.

Sources

• Kingdom of Cambodia Labour Law 1997 — Ministry of Labour and Vocational Training (MOLVT), Articles 165–173 on Annual Leave.
• Ministry of Labour and Vocational Training (MOLVT) — official guidance