Looking to grow your company? Hiring international employees can give you access to cost-effective, skilled talent that will benefit your team.
Hiring from Laos gives you access to a talented workforce. In fact, the talent pool in Laos is not only deep but is also quickly specializing in tech skills.. As such, this Southeast Asian country is an ideal choice if you’re looking to grow your team worldwide.
Of course, you’ll need to understand the costs of hiring in Laos beyond salaries. This includes benefits, bonuses, payroll, and taxation.
In this article, we’ll break down the cost of hiring talent from Laos and look at how much you can expect to spend per hire.
Laos Hiring Costs
To start, as an employer, you’ll need to fulfill a few basic payment obligations. These include:
- Payroll (gross salaries)
- Tax payments and withholding
- Statutory benefits
- Paid leave
- Overtime
- Severance pay
To make your hiring offers more attractive to prospective employees, it’s always helpful to include bonuses and if possible, “fringe benefits”. The latter could include pay-in retirement plans, health insurance, meal subsidies, or other extras that go above and beyond an employee’s basic salary.
Required Costs of Hiring an Employee in Laos
Laos Gross Salary
Laos has a minimum wage of LAK1,200,000 (Lao Kips) per month. This minimum wage is set to increase to LAK1,300,000 per month on May 1, 2023.
Laos Work Bonuses
There are no obligatory employee bonuses to pay in Laos.
Laos Government Fees and Taxes
Foreign workers who spend over 183 days a year in Laos are considered tax residents. As such, they must pay income tax in Laos on their worldwide income, including wages from their home country. This holds true unless determined otherwise by a double taxation agreement with the foreign worker’s country of origin, or occasionally by an agreement between the Lao government and relevant investors.
The same principle applies to Lao nationals working abroad.
Laos residents must pay Lao income tax on their global earnings. Income tax rates are based on monthly salaries and other earnings (benefits). The rates follow a progressive taxation model and range from 0% and 25%, depending on the income bracket.
Benefit Payments and Social Security
Employees must contribute to social security at a rate of 6% of gross pay, while employees pay in at 5.5%.
Overtime Pay
Employers can request for employees to work overtime with the prior consent of their trade union agreements.
Overtime cannot exceed three hours per day or 45 hours per month, except in extraordinary circumstances, such as natural disasters. Overtime pay can vary from a rate of 150% to 350%, depending on whether overtime is worked after hours, on weekends, or on holidays.
Severance Pay
Lao employees are entitled to 10% of their most recent monthly salary multiplied by the number of months worked as severance.
Optional Remote or Office Working Costs
Does your remote Lao team need digital hardware or software set up? If you are bringing on team members remotely, you may have added costs like high-speed internet service, upgraded electronics, printers, or higher-volume servers.
The national language in Laos is Lao, which is spoken in different dialects among ethnic groups. Vientiane Lao is the most common dialect, so you may need to invest in translation software.
Are you looking to hire a large number of Lao workers? If there’s a significant team, it could be worth investing in an office or coworking space so your team can access the technologies they needy and build connections with their coworkers.
Total Cost of Hiring
Let’s say you wanted to hire an employee in Laos at a salary of 100,000 USD (1,757,103,000 LAK)
Salary: $100,000 Gross pay
Employer social security contributions: USD 6,000 (87,855,150 LAK)
Bonuses and other costs: Not applicable
Total: USD106,000 (1,862,529,180 LAK)
Note that this is a minimum payment. Generally, you will attract higher-skilled and competent candidates by including bonuses or other paid benefits.
How Borderless Can Help
Although it can seem like all these costs add up quickly, we want to make your hiring process stress-free. Onboarding your new Laos team should feel like a breeze. It’s an investment, but it’s a major step for your company that you deserve to feel confident about.
At Borderless, we help you hire employees from Laos and over 150 different countries if you are looking to grow your team. Book a demo to see how we’ll help you hire top global talent quickly and compliantly.
Disclaimer
Borderless does not provide legal services or legal advice to anyone. This includes customers, contractors, employees, partners, and the general public. We are not lawyers or paralegals. Please read our full disclaimer here.
