How is income tax calculated in Laos?
Lao and foreign employees pay the same personal income tax: nothing on the first LAK 30 million a year, then 5%, 10%, 15%, 20%, and 25% above LAK 780 million. Tax is withheld monthly on the equivalent monthly table.
Employees contribute 5.5% of gross pay to social security, on a base capped at LAK 4.5 million, and the contribution is deductible when calculating income tax.
Expatriates who work in Laos for more than 12 months must register in the social security scheme.
What is the income tax rate in Laos?
| Taxable income | Rate |
|---|---|
| LAK 0 – LAK 30,000,000 | 0% |
| LAK 30,000,000 – LAK 60,000,000 | 5% |
| LAK 60,000,000 – LAK 180,000,000 | 10% |
| LAK 180,000,000 – LAK 300,000,000 | 15% |
| LAK 300,000,000 – LAK 780,000,000 | 20% |
| Over LAK 780,000,000 | 25% |
What mandatory salary deductions apply?
- Social security (employee): 5.5% of pay, on up to 4,500,000 a month.
Gross salary and take-home salary
Gross salary is what your contract says before anything is taken off. Take-home salary is what reaches your bank account after income tax and the compulsory employee contributions. Employer contributions are paid on top of your salary and are not taken from it.
Example: LAK 67,000,000 a month
An employee earning 67,000,000 a month, about US$3,000.
| Item | Monthly | Annual |
|---|---|---|
| Gross salary | LAK 67,000,000 | LAK 804,000,000 |
| Income tax | LAK 11,063,125 | LAK 132,757,500 |
| Compulsory contributions | LAK 247,500 | LAK 2,970,000 |
| Take-home pay | LAK 55,689,375 | LAK 668,272,500 |
Effective income tax rate 16.5%; all deductions 16.9%.
Frequently asked questions
How much income is tax-free in Laos?
The first LAK 30 million a year (LAK 2.5 million a month).
How much social security does an employee pay?
5.5% of gross pay, on a base capped at LAK 4.5 million.
Do foreigners pay the same tax?
Yes, the rates apply to both Lao and foreign individuals.
Official sources
- PwC Worldwide Tax Summaries (reviewed 07 August 2026): Lao PDR - Individual - Taxes on personal income. Read 5 November 2026.
- PwC Worldwide Tax Summaries (reviewed 07 August 2026): Lao PDR - Individual - Other taxes. Read 5 November 2026.
Last reviewed 5 November 2026. An estimate for planning, not tax advice; your employer’s payroll and the tax authority decide what is actually withheld.
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