The Thailand Guide: All About Employment Laws, Taxes & Benefits

Introduction

Thailand has one of the great development success stories. Because of intelligent economic policies, it has become an upper-middle-income economy and is making progress towards meeting the Sustainable Development Goals.

The Thai economy has been moderately free for two decades, and its GDP growth has been solid.

Pro-business reforms in 2018 have made it easier to start a business, get electricity, pay taxes, and trade across borders.

Here's more information on Thailand's highly potential economy:

General Information

Currency: Thai Baht (THB) 1 ฿ = 0.032 USD

Economic Capital: Bangkok

Spoken Language: Thai, English

GDP: 2.4% growth rate (2019) (Source: World Bank)

Time Zone: UTC (+7:00)

Entitlements

Minimum Wage: Minimum wages range from 313 baht to 336 baht per day. Wages vary from province to province.

Payroll Cycle: Usually, monthly

Pay Date: It is determined by the contract between the employer and the employee. Further, the date for overtime pay, holiday pay, and holiday overtime pay is agreed upon beforehand.

Working Hours: 48 hours per week or 8 hours per day. For hazardous work, it is 7 hours per day and 42 hours per week. All employees are entitled to a daily rest period of at least 1 hour after working for five consecutive hours.

Overtime Compensation: On a typical workday, any hour beyond eight is paid at 150% of the employee’s hourly compensation. A shift of up to 8 hours worked during the holiday or day off is compensated a base rate of 200%, and work beyond 8 hours on a holiday or day off is paid at 300% of the base hourly rate.

Leaves

Public Holidays: Employees are entitled to at least 13 public holidays by the employer. Here is the list of public holidays published by the authorities.

Sick Leaves: Employees are entitled to up to 30 days of paid sick leave a year.

Maternity Leaves: An expectant mother is entitled to maternity leave of up to a maximum of 98 days (inclusive of holidays). This leave includes the leave taken for prenatal care. The employer must provide equal pay to the expectant mother for up to 45 days throughout the leave period.

Paternity Leave: State officials or public sector employees can take up to 15 days off at full salary within 30 days of the child’s birth. Officials taking extra days off to take care of their newborns would not be entitled to the salary payment. There is no paid paternity leave by statute in the private sector, although employers are free to offer paid/unpaid time off.

Marriage Leave: Up to 3 days of leave.

Adoption leave: There is no statutory adoption leave for the parents.

Childcare Leave: No separate child care leaves.

Death: An employer can avail of bereavement leave for up to 4 weeks at 100% base salary.

Work-Related Injury Leave: If the employee needs to receive medical treatment due to work-related injury or occupational disease, their work-related injury leave should not exceed more than 12 months. Injured employees are paid 100% of their daily wages.

Taxes in Thailand

The tax year is the calendar year. Income tax is calculated by applying a progressive tax rate schedule to taxable income as follows:

Taxes for Non-residents: Employment income shall be taxed at the progressive tax rate, the same tax rate as residents of Thailand. A non-resident may be taxed at 15% on gross income.

Corporate Income Tax: 20%

Income Tax Return (ITR): Consolidated returns are not permitted for corporate income tax purposes; each company must file its tax return. A taxpayer must self-assess and make an advance corporate income tax payment for the first six months of the tax year.

Payroll tax: Tax on employment income is withheld by the employer and remitted monthly to the tax authorities.

Value Added Tax (VAT): Standard Rate is 7%. The export rate is 0%.

Property tax: It imposes various tax rates based on the nature of the assets. The maximum tax rate depends on the type of land/building and the appraisal value:

• For land used for agricultural purposes, the progressive tax range from 0.01% on land valued up to THB 75 million to 0.1% on land valued over THB 1 billion. 
• For land used for residential purposes, the progressive tax rates range from 0.02% on land valued up to THB 50 million to 0.1% on land valued over THB 100 million. 
• For land used for commercial purposes, the progressive tax rates range from 0.3% on land valued up to THB 50 million to 0.7% on land valued over THB 5 billion. 
• For wasteland, the progressive tax rates range from 0.3% to 3%.

Employee Statutory Benefits

Social protection: Firms need to register their employees with the Workmen Compensation and Social Security Fund (SSF). Both employers and employees have to contribute a 5% rate of the staff member’s income, up to a maximum of THB750 per month.

Employee Voluntary Benefits

Bonus: At the employer's discretion.

Additional: Some organizations pay allowances for housing and transport, medical insurance schemes, and any retirement or pension schemes.

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Retirals

Retirement Age: 60 years old.

Employee Provident Fund: Both employers and employees must make equal monthly contributions, ranging between 5 and 15% of the worker's monthly remuneration.

Pension: There should be at least 180 months of contributions. If a pensioner starts a new job, the pension is suspended until the end of employment. The pension is 20% of the insured's average monthly wage in the last 60 months before retirement.

Termination

Notice Period: 1-3 months.

Probation Period: Thai law does not explicitly mention probationary periods. It does state that severance must be paid to employees who have worked for 120 days or more. Thus, to avoid paying it, many employers set a probation period of up to 119 days.

Severance Pay: An employee can be terminated without a specific cause. The severance pay in Thailand is as follows –

Office Setup in Thailand

Types of Business: Partnership, Limited Companies, Joint Ventures, Representative Office, Branch Office, International Headquarters, Regional Offices.

Co-working Cost: There are numerous co-working spaces to choose from, especially in Bangkok. They offer facilities like meeting rooms, printers, copiers, event spaces, and good Wi-Fi connections.

A hot desk ranges anything from ‎฿289 to ฿350 per day. A person can take a weekly or a monthly membership to book a place. Monthly membership ranges between ฿3600 to ฿6500.

Employment Visas: To work in Thailand, you will need a Non-Immigrant ‘B’ or Business Visa. The visa fee is 2,000 Baht for single-entry (with 90-day single entry) and 5,000 Baht for multiple entries (with a 1-year validity).

One can also opt for the SMART Visa Program, a new type of visa targeted at investors, skilled people, and startup entrepreneurs wishing to work or invest in certain industries. Smart Visa holders will be granted permission to stay in the country for a maximum of 4 years, exemption from work permit requirements, and other privileges.