Definitive Guide to Hiring in Myanmar

Hiring in Myanmar

Hiring employees compliantly in Myanmar means doing it yourself or using an Employer of Record like Global Expansion. You should be careful using independent contractor agreements in Myanmar so that you don’t run afoul of employment laws. To hire an employee compliantly and offer them mandatory benefits and compliant agreements, you can:

(a) Establish your own new legal entity, banking, accounting and payroll service in Myanmar; or

(b) use an Employer of Record like Global Expansion who can handle all of the details for you.

Labor Laws in Myanmar

Employment laws in Myanmar are uniquely suited to the country’s way of life, and crucial to understand if you want to employ local talent in this country. Get the details on Myanmar employment laws and Myanmar policies here.

Employee Probation Period

Annual Leave in Myanmar

Holidays in Myanmar

Myanmar celebrates fifteen national public holidays as well as additional public holidays that vary by state:

Maternity Leave Myanmar

• All female employees are entitled to 14 weeks of paid maternity leave (six weeks before the birth of the child and eight weeks after the birth, with an extra four weeks in case of twins) for each child. 
• In the case of a miscarriage, a female employee is allowed to take up to six weeks of paid leave.

Paternity Leave Myanmar

Sick Leave in Myanmar

• Myanmar law provides that employees are only entitled to 30 days of paid sick leave per contractual year after the completion of the first six months of continuous service. 
• If an employee wishes to take sick leave during probation this will generally be unpaid.

Working Hours in Myanmar

• Depending on the industry, there are a maximum number of hours that employees can work before they are required to be paid overtime. 
• For office settings, the maximum number of hours per week is 48, with a maximum of eight hours per day.

Overtime in Myanmar

• Generally, overtime pay is required for work in excess of normal office working hours (exceeding an eight-hour day) and any work on public holidays, Saturdays and Sundays.
• According to the Shops and Establishments Act of 1951 (the “Relevant Labor Legislation”), overtime “shall be calculated at the rate of double the ordinary rate of wages payable to him”
• Overtime is usually limited to a maximum of 12 hours per week, or up to 16 hours in special cases.
• Workers who are covered by the minimum wage notification are entitled to two times the rate per hour described in that notification.

Termination of Employment in Myanmar

• According to the practices of the Department of Labor, an employee may only be dismissed for reasons specified in the employment contract or work rules.
• The prescribed employment contract template stipulates: for ordinary misconduct, an employee shall be given a warning for the first and second violation, and upon the third violation, shall sign an undertaking not to violate the employment rules again failing which he or she shall be dismissed without notice and without severance payment. 
• Should the employee (after providing the undertaking) violate any employment rules within 12 months from the date of the undertaking, he or she can be dismissed without notice and without severance payment. 
• Employers must take note to pay the employee for work done up till his or her last day of service despite the dismissal. 
• The employer may terminate an employee by giving 1 months' notice and severance payment (according to statutory requirement), provided the employee is not terminated pursuant to misconduct or contravention of any laws or regulations.

Notice Period in Myanmar

• Under the prescribed employment contract template, the employee shall give the employer a minimum of 1 months' notice prior to resignation.
• The employer may terminate an employee by giving 1 months' notice and severance payment (according to statutory requirement), provided the employee is not terminated pursuant to misconduct or contravention of any laws or regulations.

Severance in Myanmar

• Employees terminated by notice or with payment in lieu of notice shall be entitled to severance payment as follows:
  • If term of employment is less than 6 months, then no severance payment
  • If term of employment is 6 months to 1 year, then 0.5 months’ salary
  • If term of employment is 1 to 2 years, then 1 months’ salary
  • If term of employment is 2 to 3 years, then 1.5 months’ salary
  • If term of employment is 3 to 4 years, then 3 months’ salary
  • If term of employment is 4 to 6 years, then 4 months’ salary
  • If term of employment is 6 to 8 years, then 5 months’ salary
  • If term of employment is 8 to 10 years, then 6 months’ salary
  • If term of employment is 10 to 20 years, then 8 months’ salary
  • If term of employment is 20 to 25 years, then 10 months’ salary
  • If term of employment is more than 25 years, then 13 months’ salary

Myanmar Salary and Wages

13th/14th Month Salary in Myanmar

• No
• There is no statutory requirement to pay the 13th and 14th month salary.
• It is however customary for employers to pay employees performance bonuses.
• Additionally, if there is a bonus that employees have paid for a long time, then they may be liable to pay the bonus.

• The Social Security Act 2012 requires an employer with more than five workers to provide Social Security Scheme benefits to one’s workers, such as health and social care insurance as well as insurance against employment-related injuries.
• The rates of contribution by employees and employers are 2% and 3% of the total salaries and wages, respectively. 
• The contribution must be in Myanmar kyats regardless of the currency in which the employee is paid.
• With effect from 1 April 2014, the maximum monthly contribution is limited to MMK 9,000 by the employer and MMK 6,000 by the employee.
• Contributions are deductible by the employee for tax purposes. 
• The employer is obligated to withhold the employees’ contributions from their salaries.

Immigration Myanmar

• Myanmar has introduced a work and stay permit system for foreign employees, particularly in a Special Economic Zone (SEZ) and under the Myanmar Investment Law 2016. 
• Expatriate employees under the Myanmar Companies Law who want to live and work in Myanmar must apply for a stay permit based only on an employment contract. 
• For directors and shareholders, other supporting documents are required to apply for such permit, which has a duration of three months to one year.
• However, because the Company Registration Certificate is one of the supporting documents required to apply for a stay permit for business executive and employees, in practice, expatriates working in Myanmar before the issuance of such certificate need a Business Visa, which will allow the visa holder to stay in Myanmar for up to 10 weeks.

Value Added Tax (VAT) in Myanmar

• Myanmar does not levy a VAT, but a commercial tax is levied as a turnover tax on goods and services
• The commercial tax rate generally is 5% payable on services, imports, exports and goods manufactured within the country
• Commercial tax, at rates ranging from 0% to 8%, is levied as a turnover tax on goods and services.

Payments And Invoicing

Payroll Accrual in Myanmar

Country Accruals Additional Information

Description

The Social Security Act 2012 requires an employer with more than five workers to provide Social Security Scheme benefits to one’s
workers, such as health and social care insurance as well as insurance against employment-related injuries.

The rates of contribution by employees and employers are 2% and 3% of the total salaries and wages, respectively. The contribution
must be in Myanmar kyats regardless of the currency in which the employee is paid.
With effect from 1 April 2014, the maximum monthly contribution is limited to MMK 9,000 by the employer and MMK 6,000 by the
employee.

Contributions are deductible by the employee for tax purposes. The employer is obligated to withhold the employees contributions from their salaries.

Payroll Accruals Additional Information

Accrued Benefits in Myanmar

Why use Global Expansion to hire in Myanmar

Establishing a branch office or subsidiary in Myanmar can be time-consuming, expensive and complex. With such a robust labor market in place, one must pay great attention to detail when structuring employment because Myanmar labor laws are complex.

The company also has a responsibility to comply with specific employment practices dictated by Myanmar law to maintain its good standing as an equal opportunity employer.

Global Expansion makes it easy for you to expand into Myanmar. We'll help you hire your candidate of choice, handle HR matters and payroll, and ensure that you comply with local laws without the burden of setting up a foreign branch office or subsidiary. In addition, you'll have complete control and direction over your employees.

We enable you to stay in control of everything. Our Myanmar Global Professional Employer Organization (PEO) and Employer of Record (EOR) solution provides you with peace of mind to focus on running your company and the security to enter new markets.