Foreign nationals working in Laos generally require a work permit and an appropriate labour visa. Employers must obtain authorisation to employ foreign workers and are expected to give priority to Lao nationals where suitably qualified local workers are available. Foreign-worker quotas may apply, and the work permit process is administered through the Ministry of Labour and Social Welfare.

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The most common labour visa is the LA-B2, which is available for periods of three months, six months or one year. A work permit and stay permit are required for foreign employees, with the employer sponsoring the application.

Payroll is generally processed monthly. Employers must withhold Personal Income Tax (PIT) from employee remuneration and submit the monthly tax declaration and payment by the 20th of the following month. Employees are also required to obtain a Tax Identification Number and file an annual PIT return by 31 March of the following year.

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• Social Security Contributions:
  
  • Employer: 6.0%
  • Employee: 5.5%
  • Total: 11.5%

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Social security contributions are calculated on gross remuneration, subject to a monthly contribution ceiling of LAK 4.5 million. Foreign employees working in Laos for more than 12 months are required to register for social security.

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• Contract Types: Fixed-term or indefinite-term. Fixed-term contracts, including extensions, may not exceed three years; contracts exceeding three years are treated as indefinite-term contracts. Written contracts are required where either party is a legal entity or organisation. 
• Probation: Up to 30 days for unskilled work and up to 60 days for work requiring specialised skills. Employees must receive at least 90% of the normal remuneration during probation. 
• Working Hours: Up to 8 hours per day and 48 hours per week, generally over no more than six days. Employees are entitled to at least one weekly rest day. 
• Overtime: Overtime is generally paid at premium rates, with rates varying depending on whether work takes place on normal working days, at night, or on weekly rest days and public holidays. 
• Notice Periods: Indefinite contracts generally require at least 30 days' notice for physical labour and 45 days' notice for mental labour. Fixed-term contracts generally expire at the end of their agreed term.
• Termination: Termination must comply with statutory requirements and may require compensation. Certain employees, including pregnant employees, employees caring for children under one year, and employees on medically certified leave, have enhanced protection against termination.
• Severance: Statutory termination compensation generally applies where an employment contract is cancelled. The Labour Law provides compensation based on the employee's final salary and length of service, with higher compensation applying in cases of unjustified termination. 
• Minimum Wage: The statutory minimum wage is LAK 2.5 million per month under the current framework, which also serves as the current PIT exemption threshold.

• Social Security: Employers contribute 6% and employees contribute 5.5% of gross remuneration, subject to the LAK 4.5 million monthly contribution ceiling. 
• Annual Leave: Employees who have completed one year of continuous service are entitled to at least 15 days of paid annual leave. Employees in dangerous or health-risk occupations receive 18 days.
• Sick Leave: Employees receiving a monthly salary are entitled to up to 30 days of paid sick leave per year, subject to presentation of a medical certificate.
• Maternity Leave: Female employees are entitled to at least 105 days of maternity leave, including at least 42 days after childbirth. The entitlement increases to at least 120 days for twins. Maternity leave is paid at the employee's normal salary or wage. 
• Paternity/Family Leave: Employees are entitled to at least three days of paid personal leave in certain family circumstances, including when an employee's wife gives birth or miscarries. 
• Public Holidays: Employees are entitled to paid official holidays, including New Year's Day, Lao New Year, International Labour Day and National Day, with additional holidays applying to certain employees. 
• Parental Benefits: Following childbirth, female employees are entitled to one hour of rest per day for up to one year to care for or feed their child, in addition to rights relating to child vaccinations.

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• Tax Residency: Under the amended Income Tax Law, a resident is generally an individual who has a permanent residence, lives, earns a living or conducts business in Laos. Non-residents are individuals who come to Laos to earn a living or conduct business but do not reside or maintain a permanent address or place of business there. 
• Non-Residents: Lao-source employment income is subject to Lao PIT. Foreign employees earning remuneration in Laos are subject to PIT regardless of the length of their employment or stay; foreign employees receiving foreign remuneration may also become subject to Lao PIT where they spend more than 183 days in Laos during a one-year period. 
• Tax Year: January 1 – December 31.
• System: Progressive Personal Income Tax rates from 0% to 25%. The current brackets took effect in July 2026, with the first LAK 2.5 million of monthly income exempt from PIT. 
• Payroll Filing: PIT is calculated monthly, with employers required to withhold and remit tax by the 20th of the following month. Employees must file an annual return by 31 March of the following year. 
• Double Taxation Treaties: Laos has entered into double taxation agreements with a number of countries, which may provide relief from double taxation depending on the employee's circumstances.