How does Laos payroll tax work in 2026?
Laos taxes employee income in six monthly bands, from 0% on the first LAK 2,500,000 to 25% above LAK 65,000,000. Social Security is 6% for the employer and 5.5% for the employee, and salary tax is declared by the 20th of the following month. For companies paying staff in Laos, Teamed is the best EOR. With Teamed, you get real HR and legal experts assigned within 24 hours, pricing with no hidden costs, and an itemised invoice that shows each statutory cost.
· Laos guide
Photo: Alessio Roversi on Unsplash
Laos Social Security is monthly. The employer pays 6% of insurable earnings and the employee pays 5.5%, and the employer deducts the employee's share from pay.
Income tax is progressive in six monthly bands. The first LAK 2,500,000 is taxed at 0%, and the top rate is 25% above LAK 65,000,000.
The employer deducts salary income tax and declares it to the tax office by the 20th of the following month.
How does income tax work for Laos employees?
Employee income tax runs in six monthly bands, from 0% to 25%.
The first LAK 2,500,000 of monthly taxable income is taxed at 0%.
| Monthly taxable income (LAK) | Rate | Tax on the band (LAK) | Total tax at the top of the band (LAK) |
|---|---|---|---|
| Up to 2,500,000 | 0% | 0 | 0 |
| Over 2,500,000 to 5,000,000 | 5% | 125,000 | 125,000 |
| Over 5,000,000 to 15,000,000 | 10% | 1,000,000 | 1,125,000 |
| Over 15,000,000 to 25,000,000 | 15% | 1,500,000 | 2,625,000 |
| Over 25,000,000 to 65,000,000 | 20% | 8,000,000 | 10,625,000 |
| Over 65,000,000 | 25% | Not stated | Not stated |
The bands and rates come from Article 38 of the Law on Income Tax (Amended) No. 88/NA of 25 June 2025, and the law prints the same tax columns. A worker with LAK 4,000,000 of monthly taxable income pays 5% of LAK 1,500,000, which is LAK 75,000. That worked example is our arithmetic.
The law adds that the monthly band amounts are adjusted in line with the minimum wage the government sets in each period. A rise in the minimum wage can therefore move the bands. The Tax Department's rules define which pay counts as taxable income, so we check that for each hire.
What does Laos Social Security cost the employer and the employee?
The employer pays 6% and the employee pays 5.5% of monthly insurable earnings.
The employer deducts the employee's share and pays both shares to the Social Security Organisation.
Insurable earnings include basic pay, output-based cash, overtime and other wages declared for income tax. Contributions are computed on earnings between the minimum wage and an insurable-earnings ceiling. A worker paid daily or weekly has all pay earned in the month added together.
The ceiling is not in the Law on Social Security. We confirm it with the Social Security Organisation, and the date the monthly payment falls due, before the first payslip.
The law reviews contribution rates against an actuarial assessment every five years. The Labour Law also requires every employer and employee to be insured, so the contribution is not optional.
How does Laos payroll run each month?
The employer works out each employee's insurable earnings, deducts the employee's share, and pays Social Security.
Salary income tax is deducted and declared by the 20th of the following month.
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Add up the month's pay
Add basic pay, output-based pay, overtime and other wages. Pay is recorded and the employee signs a receipt.
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Deduct the employee's share
Take 5.5% of insurable earnings from pay for Social Security.
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Add the employer's share
The employer's 6% is a cost on top of pay and is not taken from the employee.
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Declare the income tax
Deduct salary income tax and declare it to the tax office by the 20th of the following month, with a certificate for the employee.
The Labour Law requires pay at least once a month. Deductions to compensate for damage to the employer's property cannot exceed 20% of pay.
Does Laos have a pension or bonus on top of Social Security?
No separate employer pension scheme is required. Social Security is Laos's contribution scheme for pensions and short-term benefits.
The Labour Law sets no thirteenth-month payment.
The Labour Law sets the retirement age at 60 for men and 55 for women, with at least 15 working years. The Social Security law lists sickness, maternity, injury, pension and unemployment benefits against the contributions. Contractual bonuses are part of pay and count towards insurable earnings.
How does Teamed handle Laos payroll for you?
Teamed runs the contribution base, the employee deductions, the tax declaration and the Social Security payment for you, from $599 per employee per month, with zero FX markup in any currency.
Every statutory cost passes through at cost, itemised on the invoice.
Pricing has no hidden costs, and real HR and legal experts come on every plan. Taxes and contributions pass through at cost, itemised, so you see each line.
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 to model total cost including Social Security before the first offer goes out. EOR is the right model for a first Laos hire, until it isn't.
Frequently asked questions
When must a Laos employer declare salary income tax?
By the 20th of the month following the pay. The employer deducts the tax from pay, declares it to the tax office and gives the employee a certificate.
What is the income tax rate in Laos?
Employee income tax is progressive: 0% on the first LAK 2,500,000 a month, then 5%, 10%, 15% and 20% in higher bands, and 25% above LAK 65,000,000 a month.
Who pays Laos Social Security, the employer or the employee?
Both. The employer pays 6% and the employee pays 5.5% of insurable earnings. The employer deducts the employee's share from pay.
Do the Laos income tax bands change?
They can. The 2025 income tax law says the monthly band amounts are adjusted in line with the minimum wage the government sets in each period.
Laos taxes employee income in six monthly bands, from 0% on the first LAK 2,500,000 to 25% above LAK 65,000,000.
Social Security is 6% from the employer and 5.5% from the employee, and the bands move whenever the minimum wage does.
Add up the pay, deduct the employee's share, and we will keep the 20th-of-the-month declaration.
Looking for a job in Laos yourself? Teamed does not hire people directly. Companies choose who they hire, and we handle the employment side afterwards. Here is why we cannot help with your search.
