Definitive Guide to Hiring in Thailand‌

Hiring in Thailand

Hiring employees compliantly in Thailand means doing it yourself or using an Employer of Record like Global Expansion. You should be careful using independent contractor agreements in Thailand so that you don’t run afoul of employment laws. To hire an employee compliantly and offer them mandatory benefits and compliant agreements, you can:

(a) Establish your own new legal entity, banking, accounting and payroll service in Thailand; or

(b) use an Employer of Record like Global Expansion who can handle all of the details for you.

Labor Laws in Thailand

Employment laws in Thailand are uniquely suited to the country’s way of life, and crucial to understand if you want to employ local talent in this country. Get the details on Thailand employment laws and Thailand policies here.

Employee Probation Period

• Probation period of no more than 119 days may generally be agreed to in the employment contract. 
• This is not a statutory requirement.

Annual Leave in Thailand‌

• Employees are entitled to a statutory minimum of 6 vacation days per year, after the first year of service. 
• In practice, many employers of professionals provide 10-15 days of paid vacation per year.

Holidays in Thailand‌

Maternity Leave Thailand‌

• Female employees are entitled up to 98 days of maternity leave. 
• 45 days are paid by the employer, and the remaining 45 days are paid by the social security fund. 
• 8 days are unpaid, or paid by the employer if agreed.

Paternity Leave Thailand‌

• Employees in the public sector are entitled to 15 days of paternity leave

Sick Leave in Thailand‌

• Under Thai labor law, an employee is entitled to annual sick leave of up to 30 paid working days per year. 
• If the employee is out for 3 or more consecutive days, the employer has the right to request a medical certificate. 
• If the employee was injured or became ill at work, the days out cannot be deemed sick leave.

Working Hours in Thailand

• Normal working hours are 8 hours per day and 49 hours per week

Overtime in Thailand‌

• Overtime cannot exceed 36 hours a week.
• Overtime compensation must be paid at a rate of between 1.5 to three times the normal hourly rate to qualifying employees.
• On weekends, overtime pay is equal to 3 times the base salary. 
• If an employee is not eligible for overtime, such as an officer of the company, then he/she should get 2 times their salary for overtime payment.

Termination of Employment in Thailand‌

• An employer or employee can terminate an employment contract by giving an advance notice in writing to the other party. 
• This notice must be given before the date wages are due in order to take effect the following wages due date. 
• Therefore, it is generally a one-month advance notice period, unless other terms are provided for under the employment contract.
• The employer does not need to give advance notice or payment in lieu of advance notice if the employment relationship is terminated due to serious misconduct by the employee.

• The amount of statutory severance pay is based on the employee's length of service within the company, as follows:
  • At least 120 days but less than one year's service: at least 30 days' basic salary.
  • At least one year but less than three years' service: at least 90 days' basic salary.
  • At least three years but less than six years' service: at least 180 days' basic salary.
  • At least six years but less than ten years' service: at least 240 days' basic salary.
  • At least ten years but less than 20 years' service: at least 300 days' basic salary.
  • More than 20 years' service: at least 400 days' basic salary.

• A dismissed employee is also entitled to:

• • Any outstanding salary or other expenses.
  • Payment of in lieu of advance notice, if advance notice is not given.
  • Payment for accumulated holidays in the previous year.
  • Payment for unused leave of the current year on a pro-rata basis.

• The employee is not entitled to severance payments if the employment relationship is terminated due to their serious misconduct.

Notice Period in Thailand

• An employer or employee can terminate an employment contract by giving an advance notice in writing to the other party. 
• This notice must be given before the date wages are due in order to take effect the following wages due date. 
• Therefore, it is generally a one-month advance notice period, unless other terms are provided for under the employment contract.
• The employer does not need to give advance notice or payment in lieu of advance notice if the employment relationship is terminated due to serious misconduct by the employee.

Severance in Thailand‌

• The amount of statutory severance pay is based on the employee's length of service within the company, as follows:
  • At least 120 days but less than one year's service: at least 30 days' basic salary.
  • At least one year but less than three years' service: at least 90 days' basic salary.
  • At least three years but less than six years' service: at least 180 days' basic salary.
  • At least six years but less than ten years' service: at least 240 days' basic salary.
  • At least ten years but less than 20 years' service: at least 300 days' basic salary.
  • More than 20 years' service: at least 400 days' basic salary.

• The employee is not entitled to severance payments if the employment relationship is terminated due to their serious misconduct.

Thailand Salary and Wages

13th / 14th Month Salary in Thailand

• No
• There is no statutory requirement to pay the 13th or the 14th month salary.
• However, it is customary for employers to pay the 13th month.

• There are two types of employee contributions in Thailand: Social Security Fund and Provident Fund
• The social security contribution rate is 5% on a capped remuneration of THB15,000 per month. 
• As a result, the contribution is capped at THB9,000 per year.
• All employees are required to contribute to a social security fund an amount equal to 5% of their salary, up to a maximum contribution of THB 750 per month.
• Employers and the government are also required to contribute an equal amount

Immigration Thailand

• Foreign nationals who wish to work in Thailand must obtain work permits from the Employment Department. 
• To be eligible for a work permit, a foreign national must enter Thailand on a Non Immigration Category “B” (Non-B) Visa. 
• The granting of a work permit is discretionary, based on such criteria as the nature of the work, the knowledge and skills of the applicant, the capital of the employer, and the proportion of Thai national employees to foreign national employees. 
• The consideration process and criteria for companies with Board of Investment (BOI) privileges are different, and an expedited process is available. 
• After all required documents are received, the time for processing a work permit can range from approximately a few days up to two weeks, at the discretion of the authority. 
• Applicants may not begin working in Thailand while their work permit applications and other papers are being processed. 
• Non-BOI companies seeking to extend a visa must show evidence of payroll withholding and Thai Social Security Fund contributions of the foreign national.
• To change employers after an applicant receives a work permit, the applicant must cancel the existing work permit before filing a new application reflecting a change of employer. 
• Work permits are usually granted for one year. 
• An application for renewal is required if the holder wishes to continue working in Thailand. 
• A foreigner caught working without a valid work permit is subject to a fine or imprisonment or both. 
• The employer in Thailand is also subject to a fine of up to THB100,000 per person.

Mandatory Benefits in Thailand

• These are mandatory benefits as postulated by law
• These include annual leave, public holidays, sick leave, maternity leave, overtime pay, notice period, and severance pay.
• Statutory benefits also include social security benefits

Payments And Invoicing

• PIT payable by employees is withheld by employers. 
• Some self-employed individuals, including certain professionals and those engaged in the rental of property, must make an interim income tax payment by September. 
• All individuals who earn income in Thailand during a calendar year must file personal income tax returns with the Revenue Department by the end of the following March. 
• Self-assessed income tax must be paid on the filing date. 
• Married persons are taxed jointly or separately, at the taxpayers’ election, on employment income and jointly on all other types of income.

Payroll Accrual in Thailand

Country Accruals Additional Information

Payroll Accruals Additional Information

Accrued Benefits in Thailand

Why use Global Expansion to hire in Thailand

Establishing a branch office or subsidiary in Thailand can be time-consuming, expensive and complex. With such a robust labor market in place, one must pay great attention to detail when structuring employment because Thailand labor laws are complex.

The company also has a responsibility to comply with specific employment practices dictated by Thailand law to maintain its good standing as an equal opportunity employer.

Global Expansion makes it easy for you to expand into Thailand. We'll help you hire your candidate of choice, handle HR matters and payroll, and ensure that you comply with local laws without the burden of setting up a foreign branch office or subsidiary. In addition, you'll have complete control and direction over your employees.

We enable you to stay in control of everything. Our Thailand Global Professional Employer Organization (PEO) and Employer of Record (EOR) solution provides you with peace of mind to focus on running your company and the security to enter new markets.