Employer of Record in Myanmar

Hiring independent contractors has boomed in popularity because of the cost savings and flexibility they offer. It can be a great option if you require niche skills or short-term project support. Contractors allow businesses to access specialized skills quickly, without the time and cost of setting up a local entity.

However, it’s important to know the limits of this model: contractors are not a substitute for full-time employees. Relying on them for ongoing, long-term roles can create serious compliance risks, including employee misclassification, which can lead to fines, back taxes, and reputational damage.

Playroll’s contractor management solutions make it simple to compliantly engage, onboard, and pay contractors around the world. We provide clear visibility into agreements, streamline payments, and reduce compliance risks – so you can focus on getting the work done. And when you’re ready to take the next step, we can help seamlessly convert contractors into full-time employees through our global Employer of Record service.

Businesses can only operate smoothly in Myanmar if they comply with local labor laws including drafting compliant employment contract agreements and meeting taxation and payroll obligations. Learn more about the employment laws and regulations in Myanmar below, to avoid any compliance issues.

Employment Contract Requirements

In Myanmar, one of the prevalent legal frameworks governing employment is the Employment and Skills Development Law. A key requirement is that companies must formalize their employment relationships by entering into written contracts with their employees within the initial 30 days of employment. The employment contract should include:

• Job Description
• Terms of Employment
• Compensation and Benefits
• Working Hours and Overtime

Onboarding Process

We can help you get a new employee started in Myanmar quickly, with a minimum onboarding time of just 1-2 working days. The timeline starts once the employee submits all required information onto the Playroll platform and completes any necessary local authority registrations.

For non-nationals, the Right to Work assessment (if applicable) may add up to three extra days. Additional time may be needed for follow-ups on this assessment. Please note, payroll cut-off dates can impact the actual start date. Playroll's payroll cut-off date is the 10th of each month unless otherwise specified.

Working Hours in Myanmar

The regular workweek is 8 hours per day and should not go beyond 48 hours each week.

Overtime in Myanmar

Any hours worked beyond the regular 48 hours per week in Myanmar are considered overtime and are compensated at a rate of 200% of the employee's usual pay rate. For shop and establishment employees, the maximum overtime allowed is 12 hours per week, while factory workers have a maximum of 20 hours per week.

Probation Period in Myanmar

Employers and employees can agree on a probation period, but it shouldn't be longer than three months. The law doesn't give many details about it, so it's important for employers to discuss and outline the terms in the employment contract.

Growing your team in Myanmar is exciting, but it’s not without challenges. Local labor laws are often nuanced, and hiring without the right legal structure or processes can lead to misclassification, non-compliance penalties, or disputes. An Employer of Record removes that risk by acting as the legal employer on your behalf, taking full responsibility for compliance, contracts, payroll, and employee benefits.

This gives you the freedom to scale at your own pace, whether you're adding one employee or building out an entire function, without the burden of setting up and managing a local entity. You remain in control of day-to-day responsibilities and performance, while the EOR ensures every hire is legally protected and properly supported. It's a strategic way to expand globally without spreading your internal team too thin or exposing your business to legal liabilities in unfamiliar markets.

Fiscal Year in Myanmar

1 April - 31 March is the 12-month accounting period that businesses in Myanmar use for financial and tax reporting purposes.

Payroll Cycle in Myanmar

The payroll cycle in Myanmar is usually daily/ weekly/ bi-weekly/ monthly, with employees being paid by the end of the day, week, fortnight or month.

Minimum Wage in Myanmar

As of August 1, 2024, Myanmar has a statutory minimum wage of MMK 6,800 per day (approximately USD 3.25) for an eight-hour workday. This consists of a base wage of MMK 4,800 plus additional daily allowances totaling MMK 2,000. Small businesses employing fewer than 10 employees and family-owned operations are exempt from this requirement.

Bonus Payments in Myanmar

Myanmar's laws do not include provisions for 13th salaries. However, employers often provide bonuses at their discretion.

Employer Tax Contributions

Employer payroll contributions are generally estimated at an additional 3% on top of the employee salary in Myanmar.

Employee Payroll Tax Contributions

In Myanmar , the typical estimation for employee payroll contributions cost is around 2%.

Individual Income Tax Contributions

In Myanmar, individual income tax is calculated using progressive rates ranging from 0% to 25% as follows:

Pension in Myanmar

Employees can qualify for a pension at age 60 after contributing for a minimum of 180 months. There are also pensions available in cases of disability, partial retirement, and for survivors.

Employees expect to be paid accurately, on time, and in full compliance with local standards. When you're hiring in Myanmar, providing a smooth payroll experience is critical to retention and trust. An Employer of Record ensures that employees receive what they’re owed, without errors, delays, or confusion about taxes or benefits.

Key Ways an EOR Supports Payroll in Myanmar:

• Reliable Salary Payments: Ensures employees are paid promptly in local currency.
• Clear Payslips & Documentation: Provides employees with compliant, understandable records.
• Correct Benefits & Contributions: Delivers legally mandated contributions and any changes in compensation, like bonuses.
• Payroll Setup & Processing: Handles salary calculations, tax withholdings, and local reporting obligations.
• Boosts Employee Confidence: Builds trust with compliant, consistent payroll operations.

In Myanmar, employers hiring foreign nationals must navigate structured processes to secure work permits and visas such as the Business Visa, Employment Visa, and Stay Permit. This involves submitting detailed applications, fulfilling eligibility criteria, and paying associated fees. Employers are also responsible for sponsoring their employees by providing necessary documents like company registration certificates, business licenses, evidence of permission to do business from relevant ministries, and endorsement letters. Business visas are typically valid for a 70-day stay, with multiple entry visas available for those who have previously held at least two single entry visas without immigration violations. Foreign workers staying longer than 70 days can obtain a Stay Permit, which allows them to remain in Myanmar for three months, six months, or one year. Adhering to Myanmar's regulatory framework is crucial to ensure compliance and facilitate a smooth transition for international employees into the local workforce.

Mandatory Leave Entitlement in Myanmar

The annual leave entitlement in Myanmar is 10 days for a full time worker. These can include public holidays on top of that or within those days, which would otherwise be unpaid.

Public Holidays In Myanmar

On average, Myanmar observes 16 public holidays per year.

Paid Time Off in Myanmar

Employees in Myanmar are entitled to 10 days of paid annual leave.

Maternity Leave In Myanmar

Employees are entitled 14 weeks of paid maternity leave through the country's social security scheme. Maternity leave can start six weeks before the expected due date and lasts for eight weeks after childbirth.

If there are complications or multiple births, an extra four weeks can be taken. In case of a miscarriage, employees can take six weeks of leave.

Paternity Leave In Myanmar

Fathers are entitled to 15 days of paid paternity leave for the birth of a child. However, if the child's mother is not covered under social security, fathers will receive only 25% of their average salary during paternity leave.

If an employee becomes a father of twins, the entitlement increases to 37.50%, and for triplets, it goes up to 50%.

Sick Leave In Myanmar

Employees who have completed six months of service with an organisation are entitled to 30 days of paid sick leave per year. If an employee has not completed six months of employment, sick leave can be taken but is not compensated.

Parental Leave In Myanmar

There is no specific parental leave distinct from maternity and paternity leave.

Adoption Leave

For the adoption of a child less than 12 months old, parents can take up to 8 weeks of paid childcare leave.

Childcare Leave

If it is a twin delivery, mothers can take four weeks of fully paid childcare leave immediately after maternity leave ends.‹

In Myanmar, failing to provide the correct employee benefits can have serious consequences. Mistakes in benefits administration may result in fines and harm your reputation as an employer. An Employer of Record ensures statutory benefits and leave are handled correctly, every time, and provides comprehensive options for extra perks to reward your team.

Beyond just avoiding legal issues, a well-managed benefits program builds trust with your employees. An EOR ensures benefits are set up quickly during onboarding, updated when employee status changes, and fully compliant with national regulations. They also manage communication with employees, so there’s no confusion around what’s offered and how to access it. This combination of legal compliance and positive employee experience is hard to replicate without local infrastructure. With an EOR, you can offer peace of mind to your team (and to yourself) knowing that your benefits program in Myanmar is running as it should.

Termination Process in Myanmar

As per the Department of Labour practices in Myanmar, an employee can only be terminated for reasons outlined in the employment contract or work rules. These reasons may include:

1. Misconduct
2. Business Needs
3. Poor work performance
4. Personal Reasons

Notice Period in Myanmar

Employers must give advance notice before terminating an employee. The notice period depends on the employee's length of service: less than 6 months: 2 weeks notice.

6 months to 1 year: 1 month notice.

1 year or more: 2 months notice.

Severance in Myanmar

Severance pay in Myanmar is determined based on the length of employment:

1. 6 months to 1 year: Half a month's wages
2. 1-2 years: 1 month's salary
3. 2-3 years: 1.5 months' salary
4. 3-4 years: 3 months' salary
5. 4-6 years: 4 months' salary
6. 6-8 years: 5 months' salary
7. 8-10 years: 6 months' salary
8. 10-20 years: 8 months' salary
9. 20 to 25 years: 10 months' salary
10. Over 25 years: 13 months' salary