Labor Laws in Thailand

If you wish to hire in Thailand, understanding Thai labor and employment laws' intricacies is crucial. Below are some key aspects of labor law in Thailand.

Minimum Wages

• The minimum wage in Thailand is between 328THB/day and 354THB/day.

Working Hours

• The working hours in Thailand are 8 hours per day and 48 hours per week.
• This also includes the one-hour lunch break every working day.

Overtime Pay

13th Month Pay

• Currently, no law in Thailand makes the payment of the 13th month mandatory.

Probation

• There is no statutory limit on the probation period in Thailand.
• The maximum probation period in Thailand is 119 days.
• There is no mandate for a notice period during probation in Thailand.

Notice Period After Probation

• Employers in Thailand must provide a minimum of one month and a maximum of three months' notice following probation.

Termination Process

Termination of employees in Thailand can happen on the following grounds.

• Termination during probation period in Thailand - If an employer feels that the employee is not fit for the role, they have the right to terminate the said employee.
• Termination due to poor performance - Employers must provide written documentation to employees outlining performance or behavior concerns and their impact on the company.
• Termination due to business redundancy - The Thailand law lists specific reasons employers can terminate an employee.
  

Payroll and Taxes in Thailand

Employers and employees need to stay informed about the tax regulations and payroll in Thailand. Mentioned below are some of the most important laws in this aspect.

Payroll Cycle

• The payroll frequency in Thailand is monthly.
• Employees working full-time in Thailand must receive their salary in Thai Baht (฿, THB).

Personal Income Tax

• Thailand's income tax rates are growing, ranging from 5%-35%. The income tax is calculated every month.

Corporate Tax Rate

• The corporate tax rate in Thailand is 20% of net profit. 

Social Security Contribution

• Employers and employees are liable for contributing to the Social Security system, which offers health care and maternity leave benefits.
• Every employee must contribute 5% of their salary, capped at THB 750 per month, to the social security fund. Employers and the government are obligated to match this contribution.

Employee Benefits in Thailand

Employee benefits in Thailand might vary depending on criteria such as the type of employment and industry and company policies. As a result, employees may check their employment contracts and company rules to understand the specific statutory benefits in Thailand offered by their employers. 

On that note, mentioned below are some common benefits employers in Thailand provide. 

Types of Leave in Thailand

Details of the leave policy in Thailand are - 

Privilege Leave

• Employees in Thailand are typically entitled to a minimum of 6 days of paid annual leave, provided they have worked for a full year.
• In some companies, employers provide 12 days of annual leave.

Sick Leave

• Employers must provide 30 days of sick leave to every employee.

Maternity Leave

• Female employees benefit from 90 days of maternity leave in Thailand.
• Out of these, 45 days are paid leave, and the remaining is covered as per the employer’s agreement.

Paternity Leave

• Currently, no law makes paternity leave in Thailand mandatory for employees.

Compassionate Leave

• Although there is no legal obligation for an employer to provide compassionate leave to employees, they may do so, depending on the agreement between the employer and the employee.

Military Leave

• A total number of 60 days of military leave per year is provided to every employee by the Thailand government. 
• It can be availed only once. 

Sterilization Leave

• The Thailand labor laws also lay down specific guidelines related to sterilization leave. 
• Every employee is entitled to take paid leave to get sterilized. The length of leave may vary depending on the medical procedure and the time individuals need to recover. 
• To avail of this benefit, employees must provide a certificate authorized by a first-class medical professional.

Business Leave

• Thailand's employers must provide their employees with a maximum of three days of business leave.
• It is commonly used to acquire a new ID, driver's license, or passport.

Childcare Leave

• Childcare leave is not mandatory in Thailand.

Public Holidays in Thailand

Employees are entitled to get the following public holidays

Carry Forward

• Annual carry forward of leave is allowed by the Thai government and may vary depending on the agreement. 

Types of Insurance in Thailand

Public Health Insurance

• Under the Universal Coverage Scheme provided by Thailand, every legal resident of this country, which includes foreign workers with valid work permits, is eligible for healthcare coverage. It is a mandatory benefit that must be provided by all employers in Thailand to their employees.

Private Health Insurance

• Currently, there is no provision for private health insurance in Thailand.

Cost of Hiring an Employee in Thailand

If you want to hire in this region, you need to be aware of a few crucial components that come into play when calculating the overall cost of hiring in Thailand. It includes initial costs, operational overhead, local compliance, and more. 

Establishing a Subsidiary vs. Employer of Record (EOR) in Thailand

Ultimately, the choice between establishing a subsidiary in Thailand and partnering with Skuad depends on the company’s goals, budget, and long-term commitment to the market. 

While the former option can offer greater control and direct presence in Thailand, it comes alongside significant initial costs. On the other hand, by partnering with EOR in Thailand like Skuad, you can minimize the overall cost of hiring employees in Thailand while also ensuring compliance with local regulations.

Top Job Listing Sites in Thailand

Here are some of Thailand's best job posting websites where you can publicize your job openings and hire qualified candidates. 

• Indeed - It is a global job search engine, and its Thailand platform aggregates job listings from various sources. 
• Huneety - As one of Southeast Asia's most popular talent platforms, Huneety enables companies to post jobs for free. It serves as a platform for job seekers and employers to connect and interact with one another.  
• LinkedIn - It is a professional networking website where companies can advertise job openings, and professionals can build their profiles and connect with potential employees.
• Glassdoor- Glassdoor provides job listings, company reviews, and insights into company cultures, salaries, and interview experiences. 
• Thaijob Today - One of the best features of this platform is that it is completely free, meaning you do not have to pay any subscription fees to explore the many features provided by Thaijob Today.

Compliance Risks of Hiring Employees in Thailand

To hire employees in Thailand, employers should be aware of various compliance risks to ensure adherence to local labor laws and regulations. Failure to comply with the same can result in legal consequences and hefty penalties. On that note, here are some key compliance risks associated with hiring employees in Thailand. 

• Minimum Wage Requirements - Employers must adhere to the minimum wage requirements as specified in the employment laws of Thailand. Failure to adhere can result in serious legal consequences.
• Employee Leave Entitlements - Denying or miscalculating leave entitlements can bear severe consequences for employers. Therefore, adhering to all the regulations and ensuring accurate calculations and documentation of leave days is important. ‍
• Working Hours and Overtime - Violating working hours and overtime compensation laws can lead to hefty penalties for employers. Therefore, obtaining written consent from employees for overtime and maintaining accurate records is always advisable.

How to Hire Talent in Thailand

Mentioned below are three strategic ways to hire employees in Thailand. 

Option 1: Establish a Subsidiary

• Overview: Establishing a subsidiary in Thailand involves setting up a separate legal entity. 
• Pros: The parent company controls operations, management, and strategic decisions. It is typically suitable for companies with a long-term presence in Thailand.
• Cons: It involves significant initial costs and can be time-consuming.

Option 2: Hire as a Contractor

• Overview: Hiring talent as a contractor involves engaging individuals on a contractual basis. These include freelancers or consultants.
• Pros: Greater flexibility in engaging specific skills for short-term projects and lower initial costs than establishing a subsidiary.
• Cons: Legal risks associated with the misclassification of contractors as employees. 

Option 3: Partner with an Employer of Record (EOR) - Skuad

• Overview: Skuad acts as the legal employer, handling HR, payroll, and compliance for foreign countries hiring in Thailand. 
• Pros: Enables companies to hire quickly without the complexities of establishing a subsidiary, low initial costs, and reduced risk of legal issues. 

Each of these solutions has its own set of benefits and drawbacks. Therefore, it is crucial for every company that wishes to hire in Thailand to carefully evaluate their specific needs and long-term objectives before making a decision.

Hiring Trends in Thailand in 2024

In recent years, there has been a drastic increase in the adoption of remote work and flexible arrangements, especially in Thailand. Companies now provide remote or hybrid work options to attract a wider talent pool. 

In addition, Thailand's businesses are now focusing on growth and digital transformation. Companies are actively seeking candidates with proficiency in leadership, cyber security, and communication skills. This is not limited to technical roles alone but extends further into other non-technical functions. Professionals with high flexibility, resilience, and emotional intelligence are highly valued. 

Hiring in Thailand, made hassle-free with Skuad

Setting up a company in Thailand, managing multi-currency payroll and local compliance can be extremely challenging and financially draining. But, what if there is an easier way? 

With Skuad, you can easily hire, pay and manage talent in Costa Rica, compliantly. Trusted by global leaders, Skuad is the top choice for companies to employ talent across borders.

Book a demo today and enjoy a seamless hiring experience in Thailand with Skuad!

FAQs

How do I employ someone in Thailand?

There are primarily two ways of hiring in Thailand: establishing a subsidiary or partnering with an Employer of Record, like Skuad. To ensure a smooth onboarding process, employers must follow Thailand employment laws and guidelines regulating the employee-employer relationship in this country. 

How much does it cost to hire international employees?

The cost of hiring an international employee can vary depending on factors like role, industry norms, level of expertise required, and the specific terms of employment. Therefore, employers need to conduct a thorough analysis of all these factors and create a comprehensive budget when hiring international employees.