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

Prionka Jha

Dec 8, 2020

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.

Minimum Wages

Provinces

336 baht/day

Chon Buri and Phuket

335 baht/day

Rayong

331 baht/day

Bangkok, Nakhon Pathom, Nonthaburi, Pathum Thani, Samut Prakan and Samut Sakhon

330 baht/day

Chachoengsao

325 baht/day

Krabi, Khon Kaen, Chiang Mai, Trat, Nakhon Ratchasima, Ayutthaya, Phang-nga, Lop Buri, Songkhla, Saraburi, Suphan Buri, Surat Thani, Nong Khai and Ubon Ratchathani

324 baht/day

Prachin Buri

323 baht/day

Kalasin, Chanthaburi, Nakhon Nayok, Mukdahan, Sakhon Nakhon and Samut Songkhram

315 baht/day

Kamphaeng Phet, Chaiyaphum, Chumpon, Chiang Rai, Trang, Tak, Nakhon Si Thammarat, Phichit, Phrae, Maha Sarakham, Mae Hong Son, Ranong, Ratchaburi, Lampang, Lamphun, Si Sa Ket, Sathun, Sing Buri, Sukhothai, Nong Bua Lamphu, Uthai Thani and Amnat Charoen

313 baht/day

Narathiwat, Pattani and Yala

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.

Holiday Name

Date

Comments

New Year's Day nday

Jan 01

Chinese New Year

Feb 12

Narathiwat, Pattani, Yala and Saturn only

Makha Bucha

Feb 26

Date varies depending on the lunar cycle

Chakri Day

April 06

April 6th or the following Monday if it falls on a weekend

Songkran

April 13-April 15

Thai New Year

Labour Day (in lieu)

May 03

International Workers' Day

H.M. King's Coronation

May 04

Visakha Bucha Day

May 26

Birth of Buddha

H.M.Queen's Birthday

June 03

Royal Ploughing Ceremony

June 09

To be confirmed

Buddhist Lent

July 25

Government

Asahna Bucha Day (in lieu)

July 26

Date varies depending on the lunar cycle

H.M. King's Birthday (in lieu)

July 28

July 28 or following Monday if it falls on a weekend

H.M. Queen Mother's Birthday

August 12

The Passing of King Bhumibol

October 13

Oct 13th, or following Monday if it falls on a weekend

Chulalongkorn Day

October 23

October 23rd following Monday if it falls on a weekend

King Bhumibol's Birthday

December 05

December 5h, or following Monday if it falls on a weekend

Thailand Constitution Day

December 10

December 10th, or following Monday if it falls on a weekend

New Year's Eve

December 31

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:

Taxable income bracket Total tax on income below bracket Total tax on income below bracket

From THB

To THB

THB

Per cent

0

150,000

0

0

150,001

300,000

7,500

5

300,001

500,000

20,000

10

500,001

750,000

37,500

15

750,001

1,000,000

50,000

20

1,000,001

2,000,000

250,000

25

2,000,001

5,000,000

900,000

30

5,000,001

over

35

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.

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.

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 –

Period of Employment

Amount of Severance Pay

120 days - 1 year

30 days salary

1 - 3 years

90 days salary

3 - 6 years

180 days salary

6 - 10 years

240 days salary

10 - 20 years

300 days salary

20 years or more

400 days salary

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.

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