Hire in Thailand

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Last updated at June 13, 2022

Currency

Thai Baht (THB)

Capital

Bangkok

Time Zone

GMT+

Key Country Facts

Introduction

Thailand, historically known as Siam, officially the Kingdom of Thailand, is a country in Southeast Asia. Independent Siam was ruled by an absolute monarchy until a revolution in 1932 and since then Thailand has been a constitutional monarchy. However, political authority has often been held by the military, which has taken power through coups. In the last 30-40 years, parliamentary democracy has steadily gained wider popular support.

Area

Thailand covers 513,120 square kilometres and borders Myanmar to the north and west, Laos to the north and east, Cambodia to the southeast and the Gulf of Thailand to the south. Politically, there are six geographical regions which differ from the others in population, basic resources, natural features, and level of social and economic development.

Climate

Thailand’s climate is tropical, influenced by monsoon winds with three distinct seasons. It is hot from March to mid-May, rainy from mid-May to October (southwest monsoon) and relatively dry and cool from November to February (northeast monsoon). Most of Thailand experiences dry weather with mild temperatures.

Culture

The traditional Thai greeting, the wai, is generally offered first by the younger of the two people meeting, with their hands pressed together and fingertips pointing upwards as the head is bowed to touch their face to their hands, usually coinciding with the spoken word “Sawasdee khrab” for male speakers, and “Sawasdee kha” for females. The elder is to respond afterwards in the same way. Social status and position, such as in government, will also have an influence on who performs the wai first. For example, although one may be considerably older than a provincial governor, when meeting, it is usually the visitor who pays respect first.

Religion

Buddhism is the largest religion in Thailand, which is practiced by 93% of the population. There is no official state religion in the Thai constitution. Tai folk religion is practiced amongst the Isan ethnic group, and there is a significant population of Thai Muslims in the southern regions.

Official Language

Thai, the official language, is spoken by approximately 88% of the country’s population. Only 34% speak Thai as a native language. Standard Thai is spoken in the Bangkok metropolitan region, and there are 51 distinct indigenous languages in Thailand. The English speaking percentage of the Thai population is estimated to be 27%.

Thailand HR at a Glance

Employment Law

Thailand’s legal system blends principles of western and traditional Thai laws. The Thai government is a constitutional monarchy and has a prime minister as head of government with an executive, legislative, and judiciary branch. The traditional Thai laws are the product of Hindu-Brahmin laws used by the Khmer Empire. The king has little direct power under the constitution but is a symbol of national identity and unity.

The employer-employee relationship in Thailand is primarily governed by the Labor Protection Act of Thailand. Thai labor laws serve as the best safeguard of the rights regarding employment in Thailand. It sets the rights and obligations of the employers towards its employees and vice versa. Thai labor law is considered to be more protective of employees’ rights.

Employment Contract

It is not mandatory to have a written employment contract in Thailand. An oral agreement is sufficient to bind both employer and employee. However, it is strongly recommended to have one to avoid disputes, and to protect the rights and benefits of both parties. The following details should be included in an employment contract:

  • Personal details of employer and employee
  • Start date, duration and probation period
  • Duties of employee and condition of employment
  • Position of employee
  • Working days/hours
  • Remuneration
  • Leave entitlements
  • Confidentiality rights
  • Intellectual property rights
  • Termination
  • Dispute resolution

Employment contracts do not need to be written in the Thai language but this (or a dual language contract) is recommended if an employee is a Thai national might not be able to clearly understand a contract in English.

Contract Terms

Generally indefinite, with fixed retirement age at 60.

Thai labour laws distinguish between the:

  • Hire of work (independent contractor relationship), governed by the Thai Civil and Commercial Code.
  • Hire of service (employment relationship), primarily governed by the Thai Labour Protection Act BE 2541 (1998).

For an employment relationship, employer and employee can agree on indefinite term or fixed-term employment contract:

Indefinite Term

There is no specified end date, and the contract can be terminated by either party with notice, or with payment in lieu of notice. An employer can terminate the contract without advance notice only with cause.

Work Rules

An employer with 10 or more employees is required to file work rules with the Thailand Ministry of Labor, and is also required to maintain employee register with specific particulars in Thai. The work rules shall contain minimally the following details:

  • Working days, normal working hours and rest periods
  • Holidays and rules for taking holidays
  • Rules governing overtime and holiday work
  • Date and place for payment of wages (including overtime, holiday and holiday overtime pay)
  • Leave and rules for taking leave
  • Discipline and disciplinary measures
  • Lodging of grievances
  • Termination of employment and severance pay

Work rules have to be announced within 15 days of the company employing 10 or more persons. A copy of such rules must be kept at the place of business, and a copy must be distributed to employees.

Time Sheets and Record Keeping

An employer with 10 or more employees shall maintain employee records in Thai language containing the below information:

  • Name, surname and gender
  • Nationality
  • Date of birth/age
  • Address
  • Start date of employment
  • Position and duties
  • Rate of wages and other benefits
  • Date of termination

The employer shall keep the record of employees for not less than two years from date of termination of employment.

An employer with 10 or more employees has to file a report on conditions of employment and working conditions to the Director-General every January.

Probation Period/ Trial Period

Probation period is allowed, but no maximum period is stipulated. However, it should generally be for not more than 119 days because severance will be triggered at 120 days.

If the probation period is extended, and if the combined length of the initial and extended probation be 120 days or more, the employee may be entitled to severance pay in event of termination.

Working Hours

In general, the maximum working hours is 6 days a week with up to 8 hours a day (not exceeding 48 hours per week). If a working day is shorter than eight hours, it can be extended to nine hours by mutual agreement, as long as the total working time does not exceed more than 48 hours a week.

An employer must provide employees with a break of at least one hour for every period of work of five consecutive hours or more. An employer and employee can agree in advance that a rest break will be less than one hour but, when combined together, the total break time cannot be less than one hour for each workday.

Total working hours, including one hour rest and any overtime, must not exceed 11 hours in a day.

At least one day a week shall be designated as a paid rest day (usually Sunday).

Overtime

For overtime on a regular work day, overtime pay is at 1.5 times the hourly wage.

For overtime on a rest day, public holiday or annual leave day, the rate is:

  • Normal working hours on a holiday – 2 times the normal hourly wage
  • Overtime hours on a holiday – 3 times the normal hourly wage

Bonus

A bonus or extra month of salary is not mandatorily required and is considered to be an extra benefit an employer can provide to an employee. The employer decides the amount of such a discretionary bonus.

Termination

An employer or employee can terminate an employment contract by giving advance notice in writing to the other party. It is generally a one-month notice period, unless other terms are provided for under the employment contract.

If the employer wishes to terminate the employment contract with immediate effect, without an advance notice period, the employer must pay salary in lieu of notice.

For termination without cause, the chances of the terminated employee filing a claim of unfair termination with the labour court is very high. In such a scenario, the claims including the final settlement and lawyers’ fees will exceed any compensation.

Advance notice or payment in lieu of notice does is not required if employment is terminated due to serious misconduct by the employee, for example in the below cases:

  • employee was dishonest in carrying out their duties or if a criminal offence was committed
  • employee caused wilful damage
  • employee’s negligence caused serious damage to employer/put others at risk
  • employee violated work rules, regulations or orders even with written warning from employer
  • employee was absent for 3 consecutive days without notice or any justifiable reason
  • employee sentenced to imprisonment

When an employment contract is terminated, the employer must notify the termination to the Social Security Office. When the termination concerns a foreign employee, the employer must notify the termination to the Department of Employment of the Ministry of Labour, and the Immigration Bureau.

Notice Period

If an employer or employee wishes to end an employment relationship, written notice must be given at least 30 days in advance. Payment in lieu for 30 days is accepted.

Redundancy/ Severance Pay

The amount of severance is based on employee’s length of service. If an employee is terminated without a valid cause as stipulated by law, he/she is entitled to receive the following severance pay:

  • 30 days’ wages where the employment period is at least 120 days but is less than one year (120 days – 1 year)
  • 90 days’ wages where the employment period is at least one year but is less than three years (1 – 3 years)
  • 180 days’ wages where the employment period is at least three years but is less than six years (3 – 6 years)
  • 240 days’ wages where the employment period is at least six years but is less than ten years (6 – 10 years)
  • 300 days’ wages where the employment period is at least ten years but is less than twenty years (10 – 20 years)
  • 400 days’ wages where the employment period is twenty or more (20 years and above)

A dismissed employee is also entitled to:

  • outstanding salary or other expenses
  • payment in lieu of advance notice, if no advance notice is given
  • payment for accumulated holidays from previous year
  • payment for pro-rated unused leave for current year

Severance payment is not paid to employees terminated for serious misconduct.

Termination payments, including current month salary, unused annual leave and severance pay (and overtime, if any), must be paid to the employee within three days of the date of termination. However, payment in lieu of notice is payable to the employee on the date of termination.

Restrictive Covenants

The law in Thailand does not prohibit the employer from restricting an employee’s activities during employment and after termination.

Non-competition and non-solicitation clauses are considered to protect commercial rights and benefits of both parties, and this has to be a reciprocal agreement where:

  • enforcing it does not obstruct the employee from making a living
  • in force for specific businesses only, and for a defined period that is considered to be fair
  • the restriction can be for a time period or by geographical area

Fixed Term Contracts

Fixed-term contracts can only be used for certain types of work, e.g. special projects for up to 2 years, work of a temporary nature and seasonal work. The Labor Protection Act governs fixed-term employment contracts, and stipulates that it must be in writing when the employment commences. Fixed-term contracts must explicitly state that they are ‘fixed’ by defining the start and end date of employment. In the contract, it must be clearly stated that the employment will be terminated at the end of the period.

An employment contract may be deemed to be for an indefinite term if it is used for work other than the above.

A fixed-term contract:

  • cannot have a probation period
  • cannot be terminated before the stipulated end date, unless either party is in default
  • cannot be extended

Tax and Social Security

Personal Income Tax (PIT)

PIT is a direct tax levied on the income of a person. A person means an individual, an ordinary partnership, a non-juristic body of person and an undivided estate. In general, a person liable to PIT must compute his/her tax liability, file tax return, and pay tax, if any, accordingly on a calendar year basis.

Taxpayers are classified into resident and non-resident. Resident means any person residing in Thailand for a period or periods aggregating more than 180 days in any tax (calendar) year. A resident of Thailand is liable to pay tax on income from sources in Thailand as well as on the portion of income from foreign sources that is brought into Thailand. A non-resident is, however, subject to tax only on income from sources in Thailand.

Certain deductions and allowances are allowed in the calculation of the taxable income. Taxpayers shall make deductions from assessable income before the allowances are granted. Therefore, taxable income is calculated by: Assessable Income – Deductions – Allowances.

Deductions Allowed for the Calculation of PIT

 

Type of Income
Deduction
Income from employment 50% but not exceeding THB 100,000
Income received from copyright 50% but not exceeding THB 100,000
Income from letting out property: building & wharves 30%
Income from letting out property: agricultural land 20%
Income from letting out property: all other types of land 15%
Income from letting out property: vehicles 30%
Income from letting out property: any other type of property 10%
Income from liberal professions 30% except for medical profession (60% is allowed)
Income derived from contract of work whereby the contractor provides essential materials besides tools actual expense or 60%
Income derived from business, commerce, agriculture, industry, transport, or any other activities not specified above actual expense or 60% depending on the types of income

PIT RATES APPLICABLE TO TAXABLE INCOME

Taxable Income (THB)
Marginal Taxable Income (THB) Tax Rate (%)
0 – 150,000 150,000 Exempt
150,001 – 300,000 150,000 5.0
300,001 – 500,000 200,000 10.0
500,001 – 750,000 210,000 15.0
750,001 – 1,000,000 250,000 20.0
1,000,001 – 2,000,000 1,000,000 25.0
2,000,001 – 5,000,000 3,000,000 30.0
Over 5,000,000   35.0

Social Security

ocial Security means the security which society provides for its members by sharing risks for the stoppage on reduction of earning resulting from sickness, maternity, death, invalidity, old age, unemployment, the provisions of medical care, and child allowance.

An employer needs to register an employee as the “insured person” who starts working at the age of not under 15 and not over 60 years old in the enterprise with one or more employees, with the social security office within 30 days from the commencement of work.

In case the number of employees increases, employers are responsible for submitting new employee registration forms if their employee has never received a social security card before. If the new employee already has a social security card, the employer is still required to submit the list of the insured person, who joins the company, to the social security office.

An employer is responsible to deduct the social security from the employee’s salary each month and submit to the social security office by the 15th of the following month. For instance, contributions for January must be paid by February 15th.

Under the Social Security Act, BE 2533 (1990), 5% of wages should be withheld. Both employers and employees must contribute monthly to the social security fund by calculating from employee’s monthly wages. The monthly salary base is capped at THB 15,000, and the maximum monthly contribution amount from both employer and employee is THB 750.

*To support employers and employees and ease the effect of the rise in fuel prices, the monthly contribution rates of employers and employees have been reduced from 5% to 1% for three months from May-July 2022.

Statutory health insurance program is not sufficient for expats. Almost all the expats and many local purchase private health insurance, or often employers will provide health insurance as part of benefits.

The social security contribution rates are:

Type of Insurance
Paid by Employer (%)
Paid by Employee (%)
Total (%)
Disability, maternity, and death benefits 1.5 1.5 3.0
Child and old age benefits 3.0 3.0 6.0
Unemployment benefits 0.5 0.5 1.0
Total social security tax 5.0 5.0 10.0

*The above rates serve as a broad guideline. Actual rates charged will differ.

Employees

Salary Payment

Salary payment is to be made at regular intervals based on contract of employment, whether on an hourly, weekly, monthly or other period of time basis.

Payslip

The payslip is not mandatory but it is advisable to send this to employees on a monthly basis or according to period of payment.

It should show the net salary and details of deductions (social security contributions, withholding tax).

Other information that should be on the payslip include:

  • Employer information – Company name, tax ID and address
  • Employee information – Name and position
  • Employer and employee social security contributions
  • Withholding tax
  • Hours worked, including any overtime/holiday work hours
  • Salary, including overtime wages, bonus, advance payments and commissions

Annual Leave

An employee is entitled to a minimum of six days of annual leave after working consecutively for one full year. This can be taken consecutively or separately.

For an employee who has not completed one year of service, the employer may provide an annual leave on a pro-rate basis.

Annual leave may be accumulated and carried forward to the next year, as agreed between Employer and Employee.

Sick Leave

An employee is entitled to take 30 days of paid sick leave per year. If the sickness lasts longer, the employee is entitled to take unpaid leave with a supporting medical certificate.

An employer may request a medical certificate if an employee is absent for three consecutive days.

Days on which the employee cannot work because of injury or illness caused by work shall not be deemed as sick leave.

Personal Business Leave

Employee are statutorily entitled to personal business leave of 3 working days per year.

Training Leave

Employees are entitled to take leave for training. However, an employer may refuse permission if the employee has already taken training leave 3 times or for a total of 30 days.

Maternity Leave

Female employees are entitled to maternity leave for 98 days per pregnancy including leave taken for pre-natal care, such as to attend medical appointments.

Fully paid maternity leave is capped at 45 days, paid for by the employer. This maternity leave is in addition to 30 days of sick leave. The second 45 days of maternity leave is paid for by Thai Social Security (capped at THB 15,000 per month). The balance of 8 days is not covered.

A female employee insured under the Thai Social Security can also receive other benefits under certain conditions. These include:

  • a lump-sum payment of THB 13,000 per birth, upon birth of a child
  • a cash benefit of 50% of wages (for wages up to THB 15,000 per month) for up to 98 days

Other Parental Leave

Paternity Leave

There are no paternity rights for male employees.

Surrogacy Leave

A surrogate mother is entitled to a maximum of 98 days of maternity leave. However, employees who become a parent through surrogacy (e.g. through adoption) do not have any rights to maternity or paternity leave.

Military Leave

The employee shall be entitled to take military service leave for mobilization exercises for inspection, for military training, or for testing of combat readiness, in accordance with laws governing military service. The employer should pay the wages at the same rate as normal work throughout the leave period but shall not exceed 60 days per year.

Sterilization Leave

This leave is available for both men and women employees.

The employer should pay the wages for the leave period as stated in a medical certification.

Trade Union Leave

An employee who is a committee member of a labour union is entitled to take leave to carry out his/her responsibilities, e.g. to participate in meetings as required by government.

Leave of Absence

Apart from above, other leaves, such as ordination leave, compassionate leave, paternity leave, leave of absence, and leave for education will be up to employer’s discretion and without pay unless the employer agrees otherwise.

Public Holidays

An employer must grant the employee no less than 13 public holidays per year, in accordance with the annual official holidays, religious or local traditional holidays.

If a holiday falls on a weekly holiday of an employee, the employee is entitled to take a day off to substitute for the holiday.

Benefits to the Employee in Thailand

PROVIDENT FUND

A provident fund is established under a mutual agreement between the employer and the employees with the purpose of offering fringe benefits to the employees and promoting their savings for retirement. This is offered by Thai financial institutions. Voluntary contributions range from 2% to 15%. An employee can make higher contributions than the employer, and these contributions are tax-exempt up to a certain limit (which means tax liability can be reduced). The maximum amount allowable for contribution is 15% of annual wages or THB 500,000, whichever is lower.

Payment for the provident fund must be submitted 3 days after payday.

Termination of membership comes about by either one of the following three factors: (1) retirement at 55 or older as stipulated in the governing rules, (2) resignation, or (3) death. Upon membership termination, members are entitled to a full amount of benefit package in accordance with the fund article. In addition, portability among provident funds and instalment payments are allowed by law.

EMPLOYEE WELFARE FUND

All employees of companies with more than 10 employees shall be members of the Employee Welfare Fund unless an exemption applies. This fund aims to provide financial security for employees in case of resignation or termination, and for their legal beneficiaries in case of death.

Both employer and employee are required to make contributions, at the rate in accordance with the prescribed by the Ministerial Regulations but not exceeding 5% of wages.

WORKMEN COMPENSATION FUND (WCF)

In addition to social security contributions, employers have to pay an annual contribution of 0.2-1% of employees’ annual wage to the WCF. The rate depends on the risk levels of the business. The Workmen’s Compensation Act requires an employer to provide benefits for employees who suffer injury, illness or death while performing their work.

The annual wage per employee for calculating the contribution is limited to BHT 240,000 per employee per year. This amount includes all payments to employee including any holiday pay, overtime pay and bonus.

The compensation amount is paid monthly at a rate of 60% of monthly wages, ranging from a minimum of BHT 2,000 to a maximum of BHT 9,000. Medical expenses must be paid up to BHT 50,000 for serious injuries. Rehabilitation expenses must be paid as necessary, up to BHT 20,000. In case of death, funeral expenses up to a maximum amount of 100 times the minimum daily wage will be paid.

LIFE-DEATH BENEFITS

For employees who have paid contributions for at least 1 month during the 6 month period before his/her death (for non-work related injuries/sickness), the following compensation benefits will be paid:

  • A maximum funeral allowance of THB 50,00
  • Survivors’ allowance paid to designated beneficiary, specified in writing by insured person

DISABILITY BENEFITS

For employees who have paid contributions for at least 3 months within the 15 months prior to becoming disabled, he/she is entitled to benefits for non-occupational disability. These benefits include:

  • medical examination or treatment expenses
  • medicine or medical supplies expenses
  • treatment and admission expenses
  • physical, mental, occupational rehabilitation expenses

CARE ALLOWANCES

An insured parent who has paid contributions for at least 12 months in a 36 month period is entitled to a monthly child allowance of BHT 600 per child, up to a maximum of 3 children.

OLD AGE BENEFITS

An insured person of 55 years of age or older who has paid contributions of at least 180 months (does not have to be consecutive), will be paid old-age pension based on the percentage of monthly wages and period of contribution in accordance with the rules as stated in the Ministerial Regulations.

UNEMPLOYMENT BENEFITS

In 2020, the Ministry of Labor authorized the Social Security Office to pay benefits to employees in case of dismissal, resignation, work suspension due to quarantine or Covid-19. Unemployment benefits were increased from March 2020 to February 2022. This includes:

  • For resignation, from 30% to 45% of the wage, up to a maximum of 90 days
  • For termination, from 50% to 70% of the wage, up to a maximum of 200 days

The cap is BHT 15,000 per month.

Visas and Foreign Workers

General Information

Thai labour laws and regulations generally apply to both local and foreign employees. However, some legislation only applies to foreign nationals, such as the:

  • Working of Foreigners Act BE 2551 (2008) (setting out work permit requirements).
  • Emergency Decree on the Work of Aliens BE 2560 (2017) (setting out business and work visa requirements).

Under these regulations, a foreign national cannot perform work or provide services in Thailand unless a work permit is issued by the Department of Employment of the Ministry of Labour.

In July 2018, a new labour law was effected, restricting the number of foreign employees to a maximum of 20% of the workforce in industrial and service sectors.

Foreign nationals can be exempted from quota requirements if the work being performed involves expertise that cannot be found locally, of if the entity is promoted by the Board of Investment of Thailand.

The usual visa for foreign nationals to work in Thailand is the “Non-immigrant visa B” or “Non-B” visa, and issuance of the visa is subject to the following:

  • Employer has 4 Thai employees for every 1 foreign employee
  • Employer’s registered capital is at least THB 2 million, or THB 3 million for each foreign employee, depending on the employer’s business
  • The foreign employee receives above the minimum amount of income prescribed

The standard duration of a Non-B visa and work permit is one year, and an application for renewal can be submitted without the foreign employee having to leave the country.

To apply for a work permit and visa, the following documents must be submitted to the Immigration Bureau and Department of Employment:

  • Application form
  • Certified copies of education records
  • Work records and certificate of employment from previous employers
  • Letter of employment from company
  • Affidavit
  • Financial statements and tax returns of the company

It usually takes about seven business days from submission of documents to obtain the work visa and work permit.

Public Holidays in 2022

S.No Occasion Date
1 New Year’s Day (substitution) January 3rd
2 Makha Bucha Day February 16th
3 Chakri Memorial Day April 6th
4 Songkran Festival April 13th – 15th
5 Labour Day (substitution) May 2nd
6 Coronation Day May 4th
7 Wisakha Bucha Day (substitution) May 16th
8 H.M. Queen Suthida’s Birthday June 3rd
9 Asarnha Bucha Day July 13th
10 H.M. King’s Birthday July 28th
11 H.M. the Late Queen Sirikit’s Birthday August 12th
12 H.M. King Bhumibol Adulyadej The Great Memorial Day October 13th
13 Chulalongkorn Memorial Day (substitution) October 24th
14 His Majesty the Late King’s Birthday Holiday December 5th
15 Constitution Day (substitution) December 12th
16 New Year’s Eve December 31st

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