Hiring Talent And Managing Payroll In Myanmar

Hiring in Myanmar? Read on to find out the employment norms (like taxes, payroll and benefits) and EOR (Employer on Record) norms in Myanmar.

Employment norms in Myanmar

Introduction: Myanmar's labor laws and regulations have been evolving in recent years, impacting the country's employment landscape. With a growing workforce and increasing interest from international investors, it is important to have a good understanding of employment norms in Myanmar.

General Information:

The Myanmar currency is the Burmese Kyat (MMK).
Naypyidaw is the capital of Myanmar.
Burmese and English are the official languages of Myanmar. Documentation can be in either language to be considered legally valid.
As of 2021, the GDP of Myanmar was reported to be 65.09 billion USD.

The labor laws and regulations in Myanmar govern minimum wage, working hours, employment contracts, occupational safety, and social security.

Table of Contents

Select Section

Agreements
Onboarding Process
Visa
Minimum Wage
Payroll Cycle
Annual Bonus
Health Benefits
Working hours and overtime
Leaves
Social Security
Taxes for Employers
Taxes for Employees
Probation
Termination
Severance Pay
Employees or Contractors
Final Words

Agreements Onboarding Process Visa Minimum Wage Payroll Cycle Annual Bonus Health Benefits Working hours and overtime Leaves Social Security Taxes for Employers Taxes for Employees Probation Termination Severance Pay Employees or Contractors Final Words

Agreements

In Myanmar, legal agreements and contracts can be drafted in either Burmese or English. Some key agreements that companies operating in Myanmar may need to be aware of include:

Employment contracts: All employees must have a written employment contract that outlines their terms of employment, including salary, working hours, and benefits.
Joint venture agreements: When setting up a joint venture with a local partner, it is important to have a comprehensive agreement that outlines the roles, responsibilities, and ownership structure of the joint venture.
Lease agreements: When leasing property or land, a lease agreement must be signed between the landlord and tenant that outlines the terms of the lease, including rent, duration, and conditions for renewal.
Shareholders agreements: For companies with multiple shareholders, a shareholders agreement can be used to define the rights and obligations of each shareholder and establish a framework for decision-making and dispute resolution.

Onboarding Process

The onboarding process in Myanmar typically includes the following steps:

Provide a job offer letter outlining the terms of employment.
Obtain a signed employment contract from the employee.
Register the employee with relevant government agencies for tax and social security purposes.
Conduct an orientation program to introduce the employee to company policies, culture, and job responsibilities.
Provide training and development opportunities to help the employee settle into their role.

Mandatory documents to be submitted during onboarding include:

Copy of national ID card or passport
CV and academic certificates
Signed employment contract

Visa

Myanmar has several types of visas and work permits, including:

Tourist Visas (T)- for short-term stays for tourism purposes.
Business visa: for business-related activities such as attending meetings or conferences.
Employment visa: for individuals who have secured a job offer from a Myanmar-based employer.
Work permit: required for foreign nationals employed in Myanmar and is typically arranged by the employer.

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Minimum Wage

The current minimum wage in Myanmar is 4,800 Myanmar Kyats per day.

Payroll Cycle

The payroll cycle in Myanmar is typically monthly

Annual Bonus

In Myanmar, it is common for companies to provide an annual bonus to employees, usually equivalent to one month's salary. However, there is no legislation mandating the provision of an annual bonus.

Health Benefits

Some common health benefits provided by employers in Myanmar include:

Medical insurance: Covers medical expenses for employees and their dependents.
Health check-ups: Provides regular health check-ups to employees to detect and prevent health issues.
Health and wellness programs: Offers programs to promote healthy lifestyles, such as fitness classes or nutrition counseling.

Working hours and overtime

Work-hours: the maximum legal working hours for adults are eight hours per day and 44 hours per week.
Break: Employers are required to provide at least one hour of rest time for every four hours worked.
Overtime: Overtime work is limited to a maximum of four hours per day and 20 hours per week, and must be compensated at a rate of 1.5 times the regular hourly rate.

Leaves

Sick leaves

Employees are entitled to 30 days of paid sick leave per year by social security.
A total of 26 weeks can be taken as sick leave out of which only 30 are compensated.

Parental leaves

Female employees are entitled to 14 weeks of paid maternity leave paid by social security.
Male employees are entitled to 15 days of paid paternity leave.
Adoptive parents are entitled to 8 weeks of paid adoption leave.

Annual leaves

Employees who have worked for one year are entitled to 10 days of paid annual leave.

Public Holidays (for the Calendar year 2024)

Some dates may vary based on official notifications and traditional calendars.

New Year's Day - 1st January
Independence Day - 4th January
Union Day - 12th February
Peasants' Day - 2nd March
Armed Forces Day - 27th March
Thingyan Water Festival - 10th-14th April
May Day - 1st May
Full Moon Day of Waso - 22nd July
Martyrs' Day - 19th July
Full Moon Day of Thadingyut - 17th October
National Day - 27th December
Christmas Day - 25th December

Public Holidays (for the Calendar year 2025)

Some dates may vary based on official notifications and traditional calendars.

New Year's Day - 1st January
Independence Day - 4th January
Union Day - 12th February
Peasants' Day - 2nd March
Armed Forces Day - 27th March
Thingyan Water Festival - 12th-16th April
May Day - 1st May
Full Moon Day of Waso - 1st July
Martyrs' Day - 19th July
Full Moon Day of Thadingyut - 6th October
National Day - 27th December
Christmas Day - 25th December

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Taxes for Employers

Employers in Myanmar are required to pay several types of taxes, including:

Social Security Contributions: Employers are required to contribute to the Social Security Board on behalf of their employees. The contribution rate for employers is 3% of the employee's monthly salary.
VAT: The value-added tax is at 5%.

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Taxes for Employees

Employees in Myanmar are required to pay several types of taxes, including:

Income Tax: Employees are required to pay income tax on their salaries. The rate of income tax varies depending on their salary.
- 0.00%: up to 2,000,000 MMK
- 5.00%: 2,000,001 MMK - 10,000,000 MMK
- 10.00%: 10,000,001 MMK - 30,000,000 MMK
- 15.00%: 30,000,001 MMK - 50,000,000 MMK
- 20.00%: 50,000,001 MMK - 70,000,000 MMK
- 25.00%: 70,000,001 MMK and above
Social Security Contributions: Employees are required to contribute to the Social Security Board. The contribution rate for employees is 2% of the monthly salary.

Probation

The probation period is typically three months.

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Termination

In Myanmar, an employer can terminate an employee for a variety of reasons, including:

Poor performance or misconduc
Redundancy due to business closure or restructuring
Health or disability reasons.
End of the employment contract period.
Serious breach of company policies or code of conduct.

Severance Pay

Employees who have completed at least one year of continuous service are entitled to severance pay, which is calculated based on the length of their service and their salary at the time of termination.

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

Employees or Contractors

In Myanmar, misclassifying an employee as a contractor or vice versa can lead to penalties for employers. If an employer is found to have intentionally misclassified an employee as a contractor to avoid providing benefits or protections, they may be subject to fines and other penalties. On the other hand, if an employer mistakenly classifies a worker as a contractor when they should be classified as an employee, they may be required to pay back wages and benefits owed to the worker, as well as any associated penalties.

Final Words

Myanmar has a set of employment norms and regulations that cover various aspects of employment, including wages, working hours, benefits, and leaves. Employers are required to comply with these regulations, which are enforced by the government. Myanmar offers various employment opportunities, particularly in sectors such as agriculture, tourism, and manufacturing. As a rapidly developing country, Myanmar's economy and employment landscape is evolving, presenting both challenges and opportunities for employers and employees alike.