When Hiring in Laos, How to Withhold Personal Income Tax on Wages? Key Points for Companies

在老挝雇人，工资个税怎么代扣？公司操作要点

ການຈ້າງງານໃນລາວ: ວິທີຫັກອາກອນລາຍໄດ້ບຸກຄົນຈາກເງິນເດືອນ? ຂໍ້ຄວນປະຕິບັດຂອງບໍລິສັດ

Published: 2026-07-08 · LaoPaniti legal guides

You have set up a company in Laos and hired local employees. When paying salaries each month, you may be confused: Do I need to withhold tax on this money? How to withhold? How much? Don't worry, today we will help you understand the basics of Personal Income Tax withholding in Laos.

Which incomes are subject to tax?

According to the relevant provisions of the Income Tax Law, wages, salaries, Overtime Pay, allowances, bonuses, and in-kind benefits provided by the company (such as free accommodation, company car, etc.) obtained by employees from the company are generally considered taxable income. Simply put, as long as it is money or goods that employees receive from you for their work, it should basically be included. However, there are some exceptions, such as Minimum wage not exceeding the prescribed standard, pensions, scholarships, and certain statutory subsidies, which may be exempt from Personal Income Tax. In addition, income such as lottery winnings and Donation/Gift received by employees may also be subject to tax if they reach the statutory threshold, but this part is generally declared by the employees themselves, and the company does not need to withhold.

How to calculate and withhold?

Laos Personal Income Tax is generally calculated using progressive Tax Rates. The specific brackets, exemptions, and calculation methods are subject to the current laws of Laos. As a company, you need to calculate each employee's Tax Payable for the month each time you pay wages, then deduct it from the salary, and pay it to the tax bureau within the prescribed Time limit. In practice, many companies outsource salary calculation and Personal Income Tax withholding to accounting firms or use professional payroll software to avoid errors.

What are the risks of missing or under-withholding?

If you miss or under-withhold an employee's Personal Income Tax, the tax bureau may require the company to pay the overdue tax and impose a Fine/Penalty. Therefore, it is recommended to incorporate salary Personal Income Tax into the company's daily compliance management and regularly check. If you are unsure about how to withhold, it is best to consult a professional first.

Tips

Regarding Taxation compliance in Laos, you can also check our previous article "When Paying Overseas Companies, How to Withhold Laos Withholding Tax? Key Points for Withholding" (https://www.123laoai.com/guide/41) to learn about other types of withholding.

If you have specific questions, such as whether a certain subsidy is subject to tax, or want to quickly check Tax Rates, you can directly use the free AI consultation of LaoPaniti (https://www.123laoai.com), input your question and get a preliminary reference. In addition, LaoPaniti also provides Contract review and Trademark duplicate check tools to help you avoid risks.

This article is compiled by 老法智 LaoPaniti for reference only and does not constitute legal advice.

FAQ

Does the employee's Minimum wage need to be withheld for Personal Income Tax?

According to the relevant provisions of the Income Tax Law, Minimum wage not exceeding the prescribed standard is generally exempt from Personal Income Tax, but the specific standard is subject to the current laws of Laos. It is recommended to consult a professional to confirm.

If the company provides free accommodation to employees, should it be considered taxable income?

Yes, in-kind benefits are generally considered taxable income and need to be included in the employee's income at fair market value, and Personal Income Tax should be withheld.

If the company forgets to withhold Personal Income Tax, what are the consequences?

The tax bureau may require the company to pay the overdue tax and may impose a Fine/Penalty. It is recommended to incorporate Personal Income Tax withholding into daily compliance management or consult a professional institution.

Legal basis

《所得税法》第相关规定条

需要人办？相关服务在线提交 · ບໍລິການທີ່ກ່ຽວຂ້ອງ · Get it done

用工/劳动合规初步审查

梳理劳动合同、工资社保、外籍员工证件和解雇/争议风险。

在线提交需求 · ສົ່ງຄຳຂໍອອນລາຍ →

商业经营合规顾问

围绕经营事项梳理公司、用工、税费、合同收款、商标保护和门店合规风险，形成可跟进的服务清单。