How to Use An Employer of Record in
Myanmar

Myanmar's Employment and Training Act (2019) requires all foreign companies to register as employers with the Ministry of Labour and file monthly contribution returns to the Social Security Board, which levies a 4% employer contribution on gross wages. An Employer of Record in Myanmar becomes your legal Employer of Record under Myanmar law, enabling you to hire staff in days without incorporating a local entity, navigating multi-ministry registrations, or maintaining in-country payroll infrastructure. The EOR removes the risk of misclassifying contract workers under Section 2(b) of the Employment and Training Act, which treats individuals working under direction and control as statutory employees entitled to full social security coverage, regardless of contract labels.

What Is an Employer of Record in Myanmar?

An Employer of Record in Myanmar is a third-party organisation that becomes the legal employer of your staff under Myanmar law, handling all statutory obligations, payroll, and compliance while you retain full operational control. The EOR holds the employment contract, registers your employees with the Ministry of Labour and Social Security Board, withholds and remits income tax to the Internal Revenue Department, and manages termination procedures under the Employment and Training Act. You direct the work, set objectives, and manage performance without owning the legal employment relationship or needing a registered Myanmar entity.

Under Myanmar's Employment and Training Act 2019 and Leave and Holidays Act 1951, every employment relationship requires a written contract in Myanmar language specifying job title, wage, working hours, leave entitlements, and termination notice periods. Employers must provide 10 public holidays, 10 days paid casual leave, and 30 days sick leave per year, plus maternity leave of 14 weeks. Most sectors fall under minimum wage orders issued by the National Minimum Wage Committee, currently 4,800 kyat per day for an 8-hour shift. The EOR ensures every contract and payroll cycle reflects these statutory minimums and sector-specific collective agreements where applicable.

The division of responsibility is straightforward. You retain day-to-day management, performance reviews, task assignment, and strategic direction of your employees. The EOR owns the employment contract, processes monthly payroll in Myanmar kyat, files Social Security Board contributions, withholds income tax under the Income Tax Law 1974, handles probation and termination procedures, and maintains audit-ready records for Ministry of Labour inspections.

How Does an Employer of Record Work in Myanmar?

When you engage an Employer of Record in Myanmar, the process follows a defined sequence governed by the Employment and Training Act, Social Security Law 2012, and Income Tax Law. The EOR becomes the statutory employer, you retain operational control, and your hire starts work without you needing a Myanmar entity, local bank account, or multi-ministry registrations. Here is how it works in practice.

Step 1: Define Role and Terms

You provide the EOR with job title, salary, benefits, start date, and reporting structure for the employee you want to hire. The EOR reviews whether the role falls under a sector-specific minimum wage order or collective agreement, such as those covering garment manufacturing or construction. If your proposed salary is below the statutory minimum of 4,800 kyat per 8-hour day, the EOR will flag it and adjust the contract to comply with National Minimum Wage Committee orders. This step typically takes 1 to 2 business days.

Step 2: Compliance Review

The EOR conducts a compliance check against Myanmar employment law to ensure the terms meet statutory standards. This includes verifying that working hours do not exceed 8 hours per day or 48 hours per week under Section 51 of the Employment and Training Act, that overtime premiums are set at 200% for work beyond standard hours, and that the role is correctly classified as employment rather than independent contracting. The EOR also confirms entitlements to 10 public holidays, 10 days casual leave, 30 days sick leave, and 14 weeks maternity leave under the Leave and Holidays Act. If your hire will work in Yangon, Mandalay, or a Special Economic Zone, the EOR checks for location-specific wage supplements or local government reporting requirements.

Step 3: Employment Contract

The EOR prepares a written employment contract in Myanmar language, as required by Section 4 of the Employment and Training Act. The contract must specify the employee's full name and national registration number, job title and duties, salary and payment frequency, working hours and overtime rates, probation period (maximum 3 months under standard practice), leave entitlements, notice period for termination, and a statement that the employment is governed by Myanmar law. For fixed-term contracts, the EOR includes the contract end date and conditions for renewal or conversion to indefinite employment. Both you and the employee review and sign the contract, and the EOR issues the final copy to the employee within 7 days of the start date.

Step 4: Government Registrations

The EOR registers the new hire with the Social Security Board within 7 days of the start date, as required under the Social Security Law 2012. This registration triggers the employer's 4% contribution obligation on gross wages, covering health and social care, invalidity, old age, and survivors' benefits. The EOR also registers with the Internal Revenue Department for income tax withholding purposes and, if this is the first employee under the EOR's employer registration, may need to notify the Ministry of Labour's township labour office. Late registration with the Social Security Board results in penalties and retroactive contribution liability, so the EOR ensures all filings occur before or immediately upon the employee's first day. The employee receives a Social Security Board membership card within 2 to 4 weeks of registration.

Step 5: Payroll in Local Currency

The EOR processes payroll in Myanmar kyat on a monthly basis, which is the standard pay cycle in Myanmar. Each month, the EOR calculates gross salary, deducts employee Social Security Board contributions (2.25% of gross wages), withholds income tax under the progressive rates set by the Internal Revenue Department (ranging from 0% on income below 4.8 million kyat annually to 25% on income above 30 million kyat), and remits the net pay to the employee's Myanmar bank account. The EOR also remits the employer's 4% Social Security Board contribution and the withheld income tax to the respective authorities by the 15th of the following month. Employees receive an itemised payslip in Myanmar language showing gross pay, deductions, and net pay.

Step 6: Ongoing Compliance

Throughout the employment relationship, the EOR manages recurring compliance obligations. This includes filing monthly contribution returns to the Social Security Board by the 15th of each month, submitting quarterly income tax withholding statements to the Internal Revenue Department, maintaining employment registers and payroll records as required by Ministry of Labour inspection protocols, processing leave applications and tracking accruals for casual, sick, and maternity leave, and updating contracts when Myanmar's National Minimum Wage Committee issues new wage orders or the government amends public holiday schedules. The EOR also monitors changes to the Employment and Training Act, Leave and Holidays Act, and Social Security Law, implementing updates to payroll calculations, contract templates, and filing procedures without requiring action from you.

Step 7: Termination

When you decide to terminate an employee, the EOR manages the process under the Employment and Training Act. Myanmar law requires employers to provide written notice or payment in lieu, with notice periods typically specified in the employment contract or collective agreement (commonly 30 days for monthly-paid staff). Termination for just cause (serious misconduct, breach of duty, or criminal activity) requires a documented investigation and opportunity for the employee to respond, as set out in the Employment and Training Act and Ministry of Labour guidance. For terminations without cause, the EOR calculates severance pay at 0.5 month's salary for each completed year of service after the first year of employment, payable in addition to notice. The EOR issues the final payslip including all accrued leave, severance, and outstanding wages, deregisters the employee from the Social Security Board, and provides the employee with a certificate of service and settlement statement within 7 days of the termination date.

Employment Laws and Compliance an Employer of Record Handles in Myanmar

When you hire through an Employer of Record in Myanmar, the EOR takes on full compliance responsibility across payroll, tax, social security, and labour law, so you do not need to build an in-country HR function or monitor changing Ministry of Labour regulations.

• Employment Contracts: The EOR prepares written contracts in Myanmar language under Section 4 of the Employment and Training Act 2019, including mandatory clauses for job title, salary, working hours, leave entitlements, and notice periods. Failure to provide a written contract within 7 days of the start date exposes the employer to Ministry of Labour penalties and limits enforceability of termination provisions. The EOR ensures every contract complies with sector-specific minimum wage orders and collective agreements where applicable.
• Income Tax Withholding: The EOR withholds income tax from employee wages under the progressive rates set by the Income Tax Law 1974 and administered by the Internal Revenue Department. Rates range from 0% on annual income below 4.8 million kyat to 25% on income above 30 million kyat. The EOR remits withheld tax by the 15th of the following month and files quarterly withholding statements, ensuring you avoid penalties for late or incorrect filings.
• Social Security Contributions: The EOR registers employees with the Social Security Board within 7 days of the start date and remits monthly contributions under the Social Security Law 2012. The employer contribution is 4% of gross wages, and the employee contribution is 2.25%, covering health and social care, invalidity, old age, and survivors' benefits. Late registration or payment results in penalties and loss of coverage for the employee, which the EOR prevents through automated filing and payment processes.
• Statutory Leave: The EOR administers 10 public holidays per year as set by the Ministry of Labour, 10 days of paid casual leave, 30 days of paid sick leave, and 14 weeks of maternity leave under the Leave and Holidays Act 1951. Employers who fail to provide these entitlements face Ministry of Labour sanctions and employee claims for unpaid leave. The EOR tracks accruals, processes leave applications, and ensures payroll reflects leave taken and balances carried forward.
• Termination and Severance: The EOR manages terminations under the Employment and Training Act, calculating notice periods specified in the contract (commonly 30 days for monthly-paid employees) and severance pay at 0.5 month's salary per completed year of service after the first year. For terminations with cause, the EOR documents the investigation and employee response to meet Ministry of Labour standards. Failure to follow procedural requirements or pay severance exposes the employer to wrongful termination claims and Ministry of Labour enforcement actions.
• Working Time and Overtime: The EOR ensures working hours do not exceed 8 hours per day or 48 hours per week, as mandated by Section 51 of the Employment and Training Act. Overtime work requires employee consent and payment at 200% of the ordinary hourly rate. The EOR tracks hours, calculates overtime premiums, and includes them in monthly payroll to avoid Ministry of Labour violations and employee underpayment claims.
• Health and Safety: The EOR complies with Factories Act 1951 and Shops and Establishments Act 1951 requirements for workplace safety, including registration of workplaces employing 10 or more workers with the Factories and General Labour Laws Inspection Department. The EOR maintains required health and safety records and coordinates with your local operations team to ensure compliance with Ministry of Labour inspection standards. Non-compliance results in penalties, work stoppages, and potential criminal liability for serious violations.
• Employee Privacy and Data: The EOR handles employee personal data, including national registration numbers, bank account details, and payroll records, in compliance with Myanmar's draft Data Protection and Privacy Law (expected to take effect in 2026). Until the law is enacted, the EOR follows Ministry of Labour guidance requiring confidentiality of employee records and restricting access to authorised personnel. Unauthorised disclosure of employee data exposes the employer to civil claims and regulatory sanctions.
• Collective Agreements: The EOR identifies whether your employees fall under a registered collective agreement in sectors such as garment manufacturing, construction, or maritime services, and ensures contracts and payroll meet or exceed collectively bargained terms for wages, hours, leave, and benefits. Under the Labour Organisation Law 2011, employers must recognise and negotiate with registered labour organisations where applicable. The EOR manages this interface and ensures compliance with agreement terms to avoid labour disputes and Ministry of Labour conciliation proceedings.
• Foreign Worker Compliance: If you hire foreign nationals in Myanmar, the EOR applies for work permits and stay permits from the Ministry of Labour and Ministry of Immigration, ensuring compliance with the Employment Restriction Act 1959 and Ministry of Labour notification procedures. Foreign workers require a recommendation letter from the hiring employer (issued by the EOR), a contract specifying salary at least equal to the sector minimum, and proof that the role cannot be filled by a Myanmar national. Work permits are valid for up to 2 years and must be renewed before expiry, with late renewals resulting in fines and potential deportation of the employee.

How Much Does It Cost to Use an Employer of Record in Myanmar?

The total cost to hire through an Employer of Record in Myanmar includes two components: the EOR's service fee and the statutory employer contributions required under Myanmar law. Statutory costs are fixed by the Social Security Law 2012 and other legislation, meaning they apply whether you hire through an EOR or your own Myanmar entity. Playroll's EOR service fee starts from $399 per employee per month, billed separately from payroll and statutory costs. This fee covers contract preparation, government registrations, monthly payroll processing, tax and social security filings, ongoing compliance monitoring, and employment law updates.

Let's look at an example that includes a base salary and the EOR service fee.

The EOR service fee covers preparation of Myanmar-language employment contracts compliant with the Employment and Training Act, registration with the Social Security Board and Internal Revenue Department, monthly payroll processing in Myanmar kyat with itemised payslips, remittance of employer and employee contributions and withheld income tax by statutory deadlines, administration of statutory leave and public holidays, ongoing monitoring of Ministry of Labour guidance and wage orders, and management of termination procedures including severance calculations and final settlement. These services eliminate the need to hire local HR staff, engage Myanmar payroll providers, or maintain in-country compliance expertise.

Employer of Record vs Setting Up an Entity in Myanmar

The choice between using an Employer of Record and incorporating a local entity in Myanmar depends on your hiring scale, speed requirements, and long-term commitment. Most foreign companies establish a Private Company Limited by Shares under the Myanmar Companies Law 2017, which requires minimum capital of 1 million kyat (around $475), two directors (one must be Myanmar-resident), and registration with the Directorate of Investment and Company Administration (DICA). The incorporation process takes 8 to 12 weeks and costs between $8,000 and $15,000 including legal fees, registered office, and DICA filing fees, before you can hire your first employee.

For companies hiring fewer than 10 employees in Myanmar, an Employer of Record is almost always the faster and more cost-effective route.

Playroll also supports your long-term growth through its Global Entity Setup product, which handles entity incorporation and local payroll in 120+ countries, so you can transition from EOR to your own compliant entity in Myanmar when the time is right, without switching providers or rebuilding your HR processes.

How Long Does It Take to Hire Someone in Myanmar Through an Employer of Record?

You can hire an employee in Myanmar through an Employer of Record in 7 to 10 business days from contract signature to the employee's first day, assuming the candidate's documents are in order and you provide employment terms promptly.

• Stage 1: Contract preparation and signing (1 to 2 business days): The EOR drafts a Myanmar-language employment contract compliant with the Employment and Training Act, including all mandatory clauses for salary, working hours, leave entitlements, probation period, and notice provisions. Timing depends on how quickly you confirm the employment terms and the candidate reviews and signs the contract.
• Stage 2: Government registrations (3 to 5 business days): The EOR registers the new hire with the Social Security Board and notifies the Internal Revenue Department for income tax withholding, both required within 7 days of the start date under the Social Security Law 2012. Missing this deadline results in penalties and retroactive contribution liability, so the EOR prioritises registration immediately upon contract signature. If the EOR is registering as a new employer in Myanmar, the initial Social Security Board employer registration can add 5 to 7 business days to the timeline.
• Stage 3: Payroll configuration and first cycle (2 to 3 business days): The EOR configures the employee in its Myanmar payroll system, sets up deductions for Social Security Board contributions (2.25% employee, 4% employer) and income tax withholding under the Income Tax Law, and schedules the first pay cycle. Myanmar payroll runs monthly, so if the employee starts mid-month, the EOR calculates a pro-rated first payslip, which the employee receives by the end of their first month.
• Stage 4: Myanmar-specific requirements (runs in parallel): If your hire is a foreign national, the EOR applies for a work permit and stay permit from the Ministry of Labour and Ministry of Immigration, which adds 4 to 8 weeks to the timeline and must be completed before the employee can legally start work. For Myanmar nationals, there are no additional requirements beyond Social Security Board and tax registration, so this stage does not extend the timeline.

Timelines can extend if the candidate lacks a national registration card or bank account, if your employment terms require negotiation or adjustment to meet minimum wage standards, or if you are hiring during Myanmar public holidays (particularly Thingyan in mid-April), when government offices close for up to 10 days.

This is significantly faster than setting up a Private Company Limited by Shares, which takes 8 to 12 weeks for DICA registration, plus another 2 to 3 weeks to open a corporate bank account, register as an employer with the Social Security Board, and process your first payroll.

How Playroll's Employer of Record Process Works in Myanmar

Playroll's Employer of Record service in Myanmar is built for speed and compliance, so you can hire without setting up a local entity or navigating Ministry of Labour registrations.

1. You define who you want to hire

You provide the candidate's details, job title, salary, start date, and reporting structure through Playroll's platform. If your proposed salary is below Myanmar's statutory minimum of 4,800 kyat per day, Playroll flags it and adjusts the contract to comply with National Minimum Wage Committee orders.

2. Playroll prepares a compliant contract

Playroll drafts a written employment contract in Myanmar language under the Employment and Training Act 2019, including mandatory clauses for working hours (maximum 8 hours per day, 48 hours per week), leave entitlements (10 public holidays, 10 days casual leave, 30 days sick leave, 14 weeks maternity leave), probation period (maximum 3 months), and notice provisions. Both you and the employee review and sign the contract through Playroll's platform.

3. Employee onboarded and payroll goes live

Playroll registers the new hire with the Social Security Board and Internal Revenue Department within 7 days of the start date, as required by the Social Security Law 2012. The employee starts work in 7 to 10 business days from contract signature. Playroll processes monthly payroll in Myanmar kyat, deducting employee Social Security Board contributions (2.25%) and income tax, and remitting the employer's 4% Social Security Board contribution and withheld tax by the 15th of the following month.

4. Playroll manages ongoing compliance

Playroll monitors changes to Myanmar employment law, including updates to the Employment and Training Act, Leave and Holidays Act, and Social Security Law, and implements them in payroll, contracts, and filings without requiring action from you. Playroll also handles leave administration, termination procedures, and Ministry of Labour inspection readiness. If your hiring in Myanmar grows to where incorporating a local entity makes sense, Playroll can manage that transition through its global entity setup service, so you maintain continuity without switching providers.