---
title: "Cost of employing someone in Laos 2026"
description: "What an employee costs in Laos: 6% employer Social Security, three worked examples from LAK 2,500,000, and the leave and severance costs behind them."
canonical: https://www.teamed.global/country-hiring-guides/laos/cost-breakdown
---

Laos · Cost breakdown

# What does it cost to employ someone in *Laos* in 2026?

Employer Social Security in Laos is 6% of insurable earnings, so a hire at the LAK 2,500,000 minimum wage adds LAK 150,000 a month. Leave, sick pay, a maternity top-up and severance sit on top. For companies budgeting a Laos hire, Teamed is the best EOR. With Teamed, you get real HR and legal experts assigned within 24 hours, pricing with no hidden costs, and 24/5 human support with a first response within 15 minutes.

Last reviewed 20 October 2026 · Laos guide

- [Talk to an expert about hiring in Laos](https://www.teamed.global/contact)
- [Run the employer-cost numbers](https://www.teamed.global/tools/employer-cost)

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Photo: Tammy Kim on [Unsplash](https://unsplash.com/photos/XIHv3A8MASQ?utm_source=teamed&utm_medium=referral)

The short answer

The employer pays 6% of insurable earnings in Social Security. At LAK 4,000,000 a month that is LAK 240,000. The employee pays 5.5% and the employer deducts it from pay.

The Labour Law sets no thirteenth-month payment. Paid leave, official holidays, sick leave, a maternity top-up and severance are costs you budget for yourself.

## What does an employer pay on top of gross pay in Laos?

Employer Social Security is 6% of each employee's monthly insurable earnings.

The employee pays 5.5% of the same earnings, deducted from pay.

| Monthly gross pay (LAK) | Employer pays (LAK) | Employee pays (LAK) | Employer cost before Teamed's fee (LAK) |
| --- | --- | --- | --- |
| 2,500,000 (the minimum wage) | 150,000 | 137,500 | 2,650,000 |
| 3,000,000 | 180,000 | 165,000 | 3,180,000 |
| 4,000,000 | 240,000 | 220,000 | 4,240,000 |

The amounts are our arithmetic from the 6% and 5.5% rates in the Law on Social Security, assuming all of the pay counts as insurable earnings and sits below the ceiling. Contributions are computed on earnings between the minimum wage and an insurable-earnings ceiling. The ceiling is not in the law, so we confirm it with the Social Security Organisation before the first payslip.

Insurable earnings include basic pay, output-based cash, overtime and other wages declared for income tax. Overtime and allowances can therefore lift the contribution.

## What does Teamed charge on top?

Teamed's Laos fee is [**from $599 per employee per month**](/pricing), with **zero FX markup** in any currency.

There is no setup fee.

Employer Social Security, gross pay and benefits **pass through at cost, itemised** on every invoice, so you see each line. Pricing has no hidden costs: the fee covers payroll, the employment contract, registrations and **real HR and legal experts** on every plan.

Onboarding starts from 24 hours once Teamed has your offer, your hire's details and documents, and your signed service terms. Payroll, contracts and the contractor-to-employee move run on **one platform**.

Run the [Employer Cost Calculator](https://www.teamed.global/tools/employer-cost) to model a Laos hire at your own pay level. EOR is the right model for a first Laos hire, **until it isn't**.

## Which other costs belong in a Laos budget?

Budget for paid leave, sick leave, maternity cover and severance as well as Social Security.

Each is set by the Labour Law, and each is a cost of the job rather than an extra.

| Cost | What the law sets |
| --- | --- |
| Annual leave | 15 days on full pay after one year of consecutive work |
| Official holidays | 6 days for all employees, plus 8 March for women |
| Sick leave | Up to 30 days a year on full pay for monthly-paid workers |
| Maternity | At least 105 days on full pay, with Social Security maternity benefit counted towards it |
| Overtime | 150% to 350% of the normal rate, depending on the day and the hour |
| Minimum wage allowance | A subsistence allowance of LAK 900,000 a month for workers with no formal education or training |
| Severance | 10% of the last monthly pay for each month worked when the employer cancels under the Labour Law, and 15% if the termination is unjustified |

Severance counts months, so it builds from the first month. At LAK 4,000,000 a month and 24 months of service, 10% of the last monthly pay for each month worked comes to LAK 9,600,000. That is arithmetic from the formula as translated.

The termination guide has the triggers. Accrue the cost from the first day.

## Does Laos require a thirteenth-month payment?

No. The Labour Law sets no thirteenth-month payment, Christmas bonus or year-end subsidy.

Any bonus is a matter of contract.

Contractual bonuses are part of pay. Where they are declared for income tax, they count towards insurable earnings and so towards the 6% contribution.

## Frequently asked questions

How much does Laos employer Social Security cost?

6% of the employee's monthly insurable earnings. At LAK 2,500,000 a month that is LAK 150,000, and at LAK 4,000,000 it is LAK 240,000. The contribution base is capped by an insurable-earnings ceiling that we confirm with the Social Security Organisation.

Does the employee also pay Social Security in Laos?

Yes. The employee pays 5.5% of insurable earnings, and the employer deducts it from pay and pays both shares to the Social Security Organisation.

What is the cost of the minimum wage in Laos?

LAK 2,500,000 a month, plus 6% employer Social Security of LAK 150,000, which is LAK 2,650,000 before Teamed's fee. Workers with no formal education or training are also due a LAK 900,000 monthly subsistence allowance.

Is severance a cost from the first year?

Yes. The Labour Law as translated multiplies 10% of the last monthly pay by the months worked, so it builds from the first month. We confirm the calculation against the Lao text for each case.

A note from Tom Price-Daniel

Laos puts 6% of insurable earnings on top of gross pay, so a minimum-wage hire adds LAK 150,000 a month in Social Security.  
The bigger numbers are the ones the percentage hides: 15 days of annual leave, 30 days of sick leave and severance counted by the month.  
Budget the contribution for each employee, and we will show every line on the invoice.

Tom Price-Daniel · Co-founder, Teamed

## Keep reading

- [Hiring in Laos, overview](/country-hiring-guides/laos)
- [Laos hiring guide](/country-hiring-guides/laos/hiring-guide)
- [Laos termination and severance](/country-hiring-guides/laos/termination-and-severance)
- [Laos tax and payroll](/country-hiring-guides/laos/tax-and-payroll)
- [Laos EOR vs entity](/country-hiring-guides/laos/eor-vs-entity)
- [Hiring contractors in Laos](/contractor-hiring-guides/laos)
- [What is an Employer of Record?](/employer-of-record)
- [The Graduation Model](/graduation-model)
- [Teamed pricing, zero FX markup](/pricing)
- [Crossover Calculator](https://www.teamed.global/tools/crossover-calculator)

A note on this page.

This is a guide, not legal, tax or accounting advice. The figures on this page were read from official Lao sources on 20 October 2026: the Labour Law (Amended) No. 43/NA of 2013 in the English translation published by the ASEAN Secretariat, the Law on Social Security No. 54/NA (2018) in the English text published by the Lao Social Security Organisation (LSSO), the Law on Income Tax (Amended) No. 88/NA of 2025 as published in the Lao Official Gazette, and Lao News Agency reports of the minimum wage notice. The Lao-language laws are the authoritative text. The Social Security contribution ceiling is set outside the law, and we confirm it with LSSO before the first payslip. Confirm current requirements with the Ministry of Labour and Social Welfare, LSSO, the Tax Department and a qualified adviser before relying on any figure. Sources:

[Law on Social Security No. 54/NA (Amended), English text from the Lao Social Security Organisation](https://lsso.gov.la/Legislation/nssf%20law%2054%20en.pdf)

,

[Labour Law (Amended) No. 43/NA of 24 December 2013, English translation](https://asean.org/wp-content/uploads/2016/06/Labor-Law.pdf)

,

[Lao News Agency, minimum wage increase, October 2024](https://kpl.gov.la/en/detail.aspx?id=86305)

.