Employer of Record in Thailand
Collaborating with an EOR in Thailand is especially beneficial for companies not based out of South-East Asia. The EOR has in-depth knowledge of the legal setup, local laws, and regulations in Thailand and can get the best out of the resources on the ground.
Get tailor-made solutions for your human resources requirements from Skuad. Learn more about Skuad’s automated HR platform that makes the onboarding of remote teams, managing their payrolls, etc., a seamless process in Thailand.
Thailand at a Glance
Estimated population: 69.63 million (2020)
Currency: THB Thai Baht
Languages frequently used: Thai, English
GDP: 543.5 billion USD
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Employment in Thailand
Labor laws and regulations in Thailand favor employees over employers and address various aspects of employment such as employee provisions, benefits, and employment protection.
Acts, Decrees, and Ministerial Regulations form the basis of employment regulations in Thailand. Acts are laws passed in the Thai parliament and contain detailed descriptions of various aspects of employment in the country. Decrees, issued by the monarch, concern specific features of employment. Ministerial regulations are not passed in the parliament; they also address the distinct characteristics of employment in Thailand.
Laws in Thailand are typically thoroughly detailed and go into the specifics of employment, the conditions under which people can be employed, and the contractual obligations of both the employer and the employee. Some of the provisions of employment laws to note before hiring in Thailand are as follows.
|Workmen’s Compensation Act (1994)
||The Workmen’s Compensation Act serves as a replacement for the employer’s liability if the employee meets with an accident during employment. It establishes an Accident Fund to compensate employees for injury, sickness, disease, or death that results directly from employment.
|Labor Protection Act (1998)
||The Labor Protection Act is the primary piece of legislation that regulates employment in Thailand. It details the employment of different categories of citizens and the types of employment that they can undertake. It talks about the wages to be paid, welfare provisions for labor, holidays, termination, and several other aspects of employment in the country.
|Labor Relations Act (1975)
||The Labor Relations Act deals with the association between labor and employers. It lays out the guidelines for settlement of disputes between employers and employees and sets out the working conditions to which employees are entitled. Further, it addresses how to up labor unions and employer associations.
|Occupational Safety, Health, and Environment Act (1970)
||The Occupational Safety, Health, and Environment Act assign the employer the obligation to provide employees with working conditions that do not harm them or lead to physical or mental damage. Employers must provide employees with an environment that actively promotes and supports their performance.
Timings, Holidays, and Leave Policies in Thailand
|Statutory working hours
||A general workday in Thailand is eight hours. An employee can work for a maximum of 48 working hours a week. For work in which the employees are in harm’s way, this is seven hours a day for a maximum of 42 hours a week.
||After every five hours of work, employers must provide employees with at least one hour of rest. There must be a minimum of one rest day every week.
||Several national holidays are offered to every employee in Thailand. These holidays are as follows.
- New Year’s Day
- Chinese New Year
- Makha Bucha
- Chakri Day
- Songkran holiday
- Labor Day
- H. M. King’s Coronation
- H. M. Queen Mother’s Birthday
- Prince Mahidol Day
- The Passing of King Bhumibol
- Chulalongkorn Day
- King Bhumibol’s Birthday
- Thailand Constitution Day
- New Year’s Eve
||In Thailand, 98 days of maternity leave are offered to mothers, including full pay.
|Annual leave accrual entitlement
||Employing and paying talent in Thailand requires a thorough understanding of employment regulations in Thailand. Trust Skuad with your employment needs. Contact Skuad experts to know more.
Employing and paying talent in Thailand requires a thorough understanding of employment regulations in Thailand. Trust Skuad with your employment needs. Contact Skuad experts to know more.
Contractors vs. Full-time Employees
Thailand has a growing population of educated youth. A highly skilled and employable population has attracted several companies to hire in Thailand.
The regulations related to contractual and full-time employment are not significantly different in Thailand. The employment contract contains the period of employment of the respective employee.
Full-time employees will typically be employed indefinitely, while part-time and contractual employees will typically have their period of employment mentioned in their contract.
As per Thai law, the same provisions and benefits are extended to contractual, part-time, and full-time employees. The law does not discriminate considerably among different types of employment.
EOR partners such as Skuad can take both part-time and full-time employees on their payroll. Regardless of what your employment requirements are, Skuad is fully capable of fulfilling them within a short period. Book a demo with us to learn more.
Scope of Negotiating Terms
When it comes to the negotiation of terms in Thailand, the scope is limited. Thanks to the Thai employment hierarchy structure, employees who belong to lower and middle levels of management do not have much of a say regarding their compensation and benefits.
The hierarchical structure of employment suggests that seniority is an important aspect of employment in Thailand. The compensation can increase significantly as you move from junior to senior levels. Alongside the compensation, benefits also increase, and you can expect to receive more than the statutory requirement as you climb the organizational ladder.
When applying for a senior position, you are also more likely to be enlisted by the HR team. This is because as seniority increases, the available talent for the position decreases, providing you with greater leverage to determine your salary and the benefits associated with it.
You can get in touch with a Skuad expert to find out more about Thailand’s workplace structure and what to expect when you start expanding your business there.
Hiring in Thailand
The process of recruitment has become standardized with the increased reach of the Internet. Companies hire remotely without scheduling physical interviews. Posting job requirements on professional websites is a common practice. While LinkedIn isn’t as popular a hiring platform in Thailand as in other countries, Thailand has its own set of local job portals like JobsDB and Ajarn that aid people in obtaining jobs. Employers choose to post their candidate requirements on these portals so that applicants can access them remotely.
Hiring begins with drafting a job description followed by screening, shortlisting, interview and selection. Some roles may require candidates to pass a written test.
EOR partners such as Skuad can aid you in the process of hiring. From scouting candidates to organizing the interview process, Skuad can be immensely helpful in acquiring the best talent from across the country.
Probation & Termination
Probation Laws in Thailand
Thai law mentions probation in passing. It talks about the ability of the employer and the employee to determine the duration of the probation period through mutual agreement. However, it does not delve into the specifics of the probationary period or further details.
However, the probation should not exceed 119 days because Thai law states that employers have to provide employees severance pay if they are terminated after 120 days. Therefore, this is a significant gray area and must be avoided to prevent disputes.
Termination of Employment
The employer can terminate an employee unilaterally if the employee is guilty of gross misconduct such as dishonesty in duty, violations of the contract, or sentenced by a court of law. No notice or compensation is required in instances such as these.
In other cases where the employer chooses to unilaterally dismiss an employee, a notice period must be provided. The employer may also provide the employee with compensation for the notice period and dismiss the employee immediately.
Termination of employment must be handled with care since it involves considerable risks for the employer. To better manage termination and other hiring-related processes in Thailand, get in touch with Skuad.
Due to the details and the many intricacies involved in it, the Thai employment and labor law can be hard to understand for someone who has never dealt with or employed people in Thailand before. This is where the need for an EOR partner becomes evident.
Skuad’s EOR solutions are based on a vast network and expertise in Thai labor law. Skuad can help you in expediting your expansion into a new geographical domain and in reducing the total resources that the expansion requires.
Outsourcing Employment Through an EOR in Thailand
Choosing to work with an EOR service can save you valuable time that would otherwise go into setting up the entire hiring process, payroll management, tax management, and other such HR-related operations.
The additional benefits of working with an EOR of repute such as Skuad involve tailor-made contracts for your needs, the establishment of all processes in compliance with local laws, easy amendment of existing contracts, and convenient e-signing of documents.
Types of Visas in Thailand
There are several kinds of visas in Thailand. The following table provides key details.
||This visa is meant for people who wish to visit Thailand for a short trip that is not for business purposes. If you are here for tourism, meeting friends and family, or simply to have a look around, you will need this visa.
||A Tourist Visa is valid for 60 days, extendable up to 30 more days.
||This is a visa that allows you to work in Thailand. While it is a short-stay visa by design, it can be extended multiple times. This visa also allows you to obtain a work permit and open a bank account in Thailand. To renew your visa, you will either need to go to the border or visit a nearby country.
||The validity for this visa is 90 days, renewable for the same period.
|One Year Non-Immigrant Visa
||The provisions of the one-year visa are much the same as those for a non-immigrant visa. However, you can still visit for only 90 days at a stretch, after which you will need to go to the border and get your visa stamped.
||The validity of this visa is one year.
||If you wish to conduct business in Thailand, you will need this visa. It entitles you to open your facility on the Thai mainland.
||The validity of this visa is 90 days, renewable after the same period.
|Permanent Resident Visa
||To be eligible for a permanent resident visa, you must have been living in Thailand on a visa for at least three years and must earn 30,000 THB a month if married and 80,000 THB a month if single.
||This visa has no expiry date.
Work visas have several formalities that must be completed. Skuad can help you with all the processing associated with onboarding a foreign employee, including visa-related solutions.
To know more about the visa process in Thailand, speak to our experts at Skuad.
To work in Thailand, you need a work permit. You can apply for a work permit if you are on a Non-Immigrant Visa. You must apply for a work permit alongside your employer. All employment documents as well as several company documents need to be submitted for the application to be completed and approved.
Payroll & Taxes in Thailand
To set up payroll in Thailand, you have to be aware of the local rules and the acts governing those rules. Knowing your employee profile is of utmost importance since it will help you understand the acts you have to refer to.
Taxation is a necessary process in the expanding efforts of a company. Here too, working with an EOR solutions company such as Skuad will help save time and initial costs so that you can focus on the goals and objectives of the expansion. Book a demo with Skuad to gain insights into the payroll and taxation process in Thailand.
|Tax Identification Number
||The Tax Identification Number is a requirement for companies that are looking to set up subsidiaries in Thailand. This number needs to be quoted in most government dealings.
|Choosing a payroll system
||The choice of the payroll system depends on government regulations and company policy. The payroll system will typically include factors such as all the benefits and provisions you need to offer your employees.
|Acquisition of employee information
||Having all employee information on file is extremely essential not only when it comes to dealing with the government but also in streamlining your internal processes. This requires a robust information technology (IT) system and file management capabilities.
Taxation in Thailand
|Employer contribution toward Social Security
|Up to 150,000 THB
|Greater than 5,000,001 THB
|Financial Year End date
|Employee contribution toward Social Security
In Thailand, it is customary to pay a 13th-month or annual bonus, but it is not a compulsion.
Setting up a subsidiary in Thailand is a rather simple task, but might be protracted if the required steps are not performed with the right documentation.
- The first step is to prepare and register a Memorandum of Association, for which three partners are required.
- Then, the business must be handed over to the directors by the promoters.
- Next, you must collect share capital from subscribers and promoters and proceed to request the company’s registration.
- Finally, you can submit your application to the registrar.
Skuad can handle your incorporation process from start to finish to ensure there are no delays. It can help you set up your subsidiary in Thailand and scale up your business. Talk to us to learn more.
Professional Employer Organization (PEO)
A professional employer organization (PEO) is very similar to an EOR. It can hire talent for your company and conduct several HR activities. However, the main difference between a PEO and an EOR is that with a PEO, the employees are on your payroll, while with an EOR, the employees are on the EOR company’s payrolls.
Skuad offers premium EOR and PEO services that help make the best of local talent available and improve the efficiency of your expansion. You can book a demo for support and guidance regarding your expansion efforts in Thailand.
Skuad has deep insights into the labor and employment laws of Thailand. With years of experience in the field and a team of competent and highly skilled industry experts, Skaud is fully capable of ensuring that your expansion is not only streamlined but also saves you time and labor.
Talk to a Skuad expert today to give your business expansion plans for Thailand the boost they need.