COUNTRY GUIDE
Payroll and HR in: Thailand
As a bustling business hub in Southeast Asia, Thailand seamlessly blends tradition and culture with a thriving economy. Here’s what you need to know about payroll and HR in Thailand.
Local currency
THB
Dialling code
+66
Pay periods
12
World Bank Ease of Doing Business
21
Capital
Bangkok
Timezone
GMT + 7
Lanuages
Thai
Tax year
Jan 1st – Dec 31st
VAT
7%
Company tax
20%
Social security
10%
Wages tax
0 – 35%
Getting started with payroll in Thailand
- Private Limited Company: requires a minimum of three shareholders and has limited liability protection.
- Public Limited Company: a PLC can offer shares to the public and has more stringent regulatory requirements.
- Branch Office: A foreign company can establish a branch office in Thailand. The branch operates as an extension of the parent company, and the parent company is responsible for the branch’s liabilities.
Running payroll in Thailand without a legal entity can be challenging because employment regulations typically require a legal presence for employers. If you don’t have a legal entity and don’t wish to set one up, we can support you with our global payroll services or an employer of record. Or if you wish to go ahead with a full registration, our market entry services can handle the set-up process on your behalf.
- In Thailand, a Tax Identification Number (TIN) is a unique identifier assigned to individuals and entities for tax purposes. For businesses, obtaining a TIN is a fundamental step in ensuring tax compliance. The Revenue Department is responsible for issuing TINs, and the application process involves submitting the necessary documentation, including proof of business registration, to the local Revenue Office.
- Businesses in Thailand are required to register for VAT if their annual turnover exceeds the threshold of THB1.8 million. Businesses that reach or exceed this threshold within a 12-month period must register for VAT with the Revenue Department.
Yes, you will need a local bank account. You’ll need to provide the necessary documentation such as company registration documents, tax identification numbers, and other relevant paperwork. The specific requirements may vary depending on the bank and local regulations.
Working hours must not exceed 8 hours per day or 48 hours per week for non-hazardous jobs. For hazardous jobs, the limit is 7 hours per day or 42 hours per week.
Overtime in Thailand must also be paid at least 1.5 times the employees normal hourly rate.
1.052 – 1.15 times employee’s salary plus any other benefits offered.
Thailand Wages and Pay
There are a range of statutory pay requirements in Thailand, governing minimum wage, sick pay, maternity pay, and severance pay. Let’s take a look at the core considerations for each:
| Daily Wage (Baht) | Applicable Regions |
|---|---|
| 400 | Chachoengsao, Chonburi, Phuket, Rayong, Koh Samui (Surat Thani) (High living costs and strong economic activity) |
| 380 | Muang District (Chiang Mai), Hat Yai District (Songkhla) (Regional hubs) |
| 372 | Bangkok, Nakhon Pathom, Nonthaburi, Pathum Thani, Samut Prakan, Samut Sakhon (Bangkok metropolitan area) |
| 337 | Narathiwat, Pattani, Yala (Southernmost provinces with the lowest wage tier) |
Overtime is set at the following rates:
- Overtime on a regular workday: 1.5 times the hourly wage
- Normal working hours on a holiday: 2 times the normal hourly wage
- Overtime hours on a holiday: 3 times the normal hourly wage
Employees in Thailand are entitled to 30 paid sick days per year.
Female employees are entitled to a maternity leave period of 98 days for each pregnancy, which includes the time taken for prenatal care, such as attending medical appointments. Paid leave during this period is limited to 45 days, with the initial 45 days covered by the employer and the remaining period compensated through the government social security fund.
For female employees covered by the Thai Social Security system, there are additional benefits available under specific conditions, including a lump-sum payment of THB 15,000 per birth upon the child’s delivery. A cash benefit equivalent to 50% of wages (up to THB 15,000 per month) is provided for a duration of up to 90 days. This wage benefit is applicable only for the first two deliveries.
Severance pay is determined by the length of an employee’s service. If an employee is terminated without a valid cause as defined by law, they are entitled to the following severance pay based on their tenure:
- 30 days’ wages for employment periods of at least 120 days but less than one year.
- 90 days’ wages for employment periods of at least one year but less than three years.
- 180 days’ wages for employment periods of at least three years but less than six years.
- 240 days’ wages for employment periods of at least six years but less than ten years.
- 300 days’ wages for employment periods of at least ten years but less than twenty years.
- 400 days’ wages for employment periods of twenty years or more.
Additionally, a terminated employee is entitled to the following compensation:
- Outstanding salary or other expenses.
- Payment in lieu of advance notice if no advance notice is given.
- Payment for accumulated holidays from the previous year.
- Payment for pro-rated unused leave for the current year.
Severance pay is not provided to employees terminated for serious misconduct. Termination payments, covering the current month’s salary, unused annual leave, and severance pay (including overtime, if applicable), must be settled within three days of the termination date. However, payment in lieu of notice is to be made to the employee on the date of termination.
Thailand Payroll and Employment Deductions
In Thailand, you’re responsible for making a number of deductions from an employee’s salary during payroll, as well as making your own contributions as an employer. Here, we’ll cover what you need to know about the Thai tax and social security system:
As of 2025, Thailand’s personal income tax rates remain unchanged from the previous year. The progressive tax brackets are:
| Taxable Income (THB) | Tax Rate (%) |
|---|---|
| 0 – 150,000 | 0% |
| 150,001 – 300,000 | 5% |
| 300,001 – 500,000 | 10% |
| 500,001 – 750,000 | 15% |
| 750,001 – 1,000,000 | 20% |
| 1,000,001 – 2,000,000 | 25% |
| 2,000,001 – 5,000,000 | 30% |
| Over 5,000,000 | 35% |
These rates apply to both residents and non-residents on income earned within Thailand. For residents, worldwide income is taxable if it is remitted to Thailand in the same or subsequent tax year.
Thailand also offers a special personal income tax rate of 17% for holders of the Long-Term Resident (LTR) visa. This flat rate is designed to attract foreign talent and investment.
As of 2025, Thailand’s Social Security contribution rates are:
| Contributor | Contribution Rate | Details |
|---|---|---|
| Employer | 5% | Employers contribute 5% of the employee’s monthly salary to the Social Security Fund. |
| Employee | 5% | Employees contribute 5% of their monthly salary to the Social Security Fund. |
| Government | 2.75% | The Thai government contributes 2.75% of the employee’s monthly salary to the Social Security Fund. |
- The maximum salary base for calculating contributions is capped at 15,000 Thai Baht per month. This means that even if an employee’s salary exceeds this amount, contributions are only calculated up to this limit.
Proposed changes aim to gradually raise the ceiling on covered monthly pay for social security contributions and benefits, starting from 17,500 Thai Baht on January 1, 2026, with further increases planned in the years to 2032.
Employers are required to make an annual contribution to the Workers’ Compensation Fund (WCF), ranging from 0.2% to 1% of their employees’ annual wages. The specific rate is determined by the risk levels associated with the nature of the business. According to the Workmen’s Compensation Act, employers are required to provide benefits to employees who sustain injuries, illnesses, or fatalities while engaged in their work.
For the purpose of calculating this contribution, the annual wage per employee is capped at THB 240,000, covering all payments such as holiday pay, overtime pay, and bonuses.
The compensation, paid monthly, amounts to 60% of the employee’s monthly wages, with a range from THB 2,000 to THB 9,000. For serious injuries, medical expenses are covered up to THB 50,000, and rehabilitation expenses are covered as necessary, up to THB 20,000. In the unfortunate event of an employee’s death, funeral expenses are provided, reaching a maximum of 100 times the minimum daily wage.
Starting October 1, 2025, both employers and employees are required to contribute to the Employee Welfare Fund:
- Contribution rate (October 1, 2025 – September 30, 2030): 0.25% of the employee’s wages.
- Contribution rate (From October 1, 2030, onwards): 0.5% of the employee’s wages.
- Payment deadline: Contributions must be remitted by the 15th of the following month.
- Penalties: Late or missed payments will incur a 5% surcharge per month on the unpaid amounts.
Thailand Payroll and HR Compliance
Moving onto to the key areas you need to consider to make sure you stay fully compliant with Thai employment law, now, we’ll cover the various rules and legislation governing payroll and HR compliance in Thailand:
Employers with a workforce of 10 or more people are required to maintain employee records in the Thai language covering the following details:
- Name, surname, and gender
- Nationality
- Date of birth and age
- Address
- Commencement date of employment
- Job title and responsibilities
- Wages and additional benefits
- Date of termination
These employee records must be retained by the employer for a minimum of two years following the end of employment.
Employers with a staff size of 10 or more are mandated to submit an annual report on employment and working conditions to the Director-General every January.
While not obligatory in Thailand, it is recommended to provide employees with a payslip regularly, typically on a monthly or payment period basis. The payslip should include essential details such as the net salary and specific deductions like social security contributions and withholding tax.
Key information to be featured on the payslip includes:
- Employer details: company name, tax ID, and address
- Employee information: name and position
- Social security contributions for both employer and employee
- Withholding tax
- Breakdown of worked hours, encompassing overtime and holiday hours
- Salary particulars, incorporating overtime pay, bonuses, advance payments, and commissions.
In July 2018, a labour law capped foreign employees in Thailand’s industrial and service sectors at 20% of the workforce. Exemptions apply for specific expertise or Board of Investment endorsement.
The standard “non-immigrant visa B” for foreign nationals requires:
- Employer having four Thai employees for each foreign employee.
- Minimum registered capital of THB 2-3 million per foreign employee.
- Foreign employee’s income surpassing the prescribed minimum.
The non-B visa and work permit have a one-year duration, with renewal options. Required documents include education records, work history, and financial statements, taking around seven business days for processing.
Thailand’s Long-Term Resident Program (LTR) from September 2022 caters to different categories:
- Wealthy Global Citizens (US 1 million in assets).
- Wealthy Pensioners (retirees aged 50 or older with stable income).
- Work from Anywhere Professionals (remote workers for established overseas companies).
- Highly skilled Professionals (experts in targeted industries).
- Dependents (spouses and children under 20 of LTR visa holders).
An employer overseeing a workforce of 10 or more people is mandated to submit work rules to the Thailand Ministry of Labor. Additionally, the employer is obligated to maintain an employee register with specific criteria in the Thai language. The work rules should encompass, at a minimum, the following details:
- Standard working days, regular working hours, and allocated rest periods
- Holidays and corresponding regulations for holiday entitlement
- Guidelines for overtime and work during holidays
- Specifics about wage payment dates and locations, covering regular, overtime, holiday, and holiday overtime pay
- Leave policies and guidelines for availing leave
- Disciplinary measures and protocols
- Procedures for lodging grievances
- Termination of employment and provisions for severance pay
These work rules must be publicised within 15 days of the company’s workforce reaching 10 or more employees. A copy of these rules should be readily available at the workplace, and each employee must be provided with a copy.
There is no mandatory national pension scheme for private sector employees in Thailand. The social security system covers certain employees, providing benefits such as medical care, sickness, maternity, disability, death, child allowances, and old age pensions. However, this system applies to specific categories of employees, and participation is generally mandatory for those covered.
For public sector employees, there may be different pension arrangements, and government employees often have their own pension schemes.
Employment contracts: While a written employment contract is not legally required in Thailand, both employers and employees can be bound by an oral agreement. However, it is highly advisable to have a written contract in place to mitigate potential disputes and safeguard the interests of both parties. Although Thai labour laws do not necessitate employment contracts to be written in Thai, it is recommended, especially for Thai nationals, to make sure that the nuances can be fully understood by all. In the case of an employment relationship, the employer and employee can opt for either an indefinite-term or fixed-term employment contract.
Indefinite term: When there is no specified end date, either party can terminate the contract with notice or payment in lieu of notice. Termination by the employer without advance notice is permissible only with just cause.
Nature of work: Thai labour laws differentiate between the hire of work (independent contractor relationship) governed by the Thai Civil and Commercial Code and the hire of service (employment relationship) primarily governed by the Thai Labour Protection Act BE 2541 (1998).
Probationary period: A probationary period is permitted with no specified maximum duration, although it is generally recommended not to exceed 119 days to avoid triggering severance at 120 days. If the probation period is extended, and the combined length surpasses 120 days, the employee may be entitled to severance pay in the event of termination.
Termination by notice: Termination of an employment contract can be initiated by either the employer or the employee by giving one month’s written notice. This standard notice period can be adjusted if different terms are specified in the employment contract. If the employer opts for immediate termination without notice, they are required to pay the employee salary in lieu of notice.
Termination without cause: Terminating an employee without cause increases the likelihood of the employee filing an unfair termination claim with the labour court. This may lead to substantial claims, including final settlement and legal fees, surpassing any compensation provided.
Employee misconduct: Advance notice or payment in lieu of notice is not required when employment is terminated due to serious misconduct by the employee. Such misconduct includes instances of dishonesty, committing a criminal offense, causing intentional damage, negligence leading to significant harm, violation of work rules despite prior warnings, unexplained absence for three consecutive days, or being sentenced to imprisonment.
Notification requirements: Upon terminating an employment contract, employers must fulfill certain notification obligations. This includes notifying the Social Security Office. In the case of foreign employees, additional notifications are required at the Department of Employment of the Ministry of Labour and the Immigration Bureau.
Thai Employee Benefits
Mandatory employee benefits in Thailand
As the social security contributions in Thailand cover a wide range of benefits, plus additional benefits that employers must offer, mean employees in Thailand will receive:
- Workmen's compensation fund
- Provident fund (retirement benefits)
- Life-death benefit
- Disability allowance
- Relocation allowance
- Childcare leave
Common supplementary benefits
Competitive supplementary benefits in Thailand can vary depending on the industry, company policies, and the preferences of the workforce. Here are some popular choices:
- Health insurance
- Life insurance
- Company pension plans
- Flexible work arrangements
Thailand Statutory Leave and Time Off
Minimum of 6 days per year after 12 months employment, in addition to 16 public holidays.
- New Year’s Day – January 1
- Songkran (Thai New Year) – April 13-15
- Labor Day – May 1
- Coronation Day – May 5
- Visakha Bucha Day – Date varies (usually in May)
- Royal Ploughing Ceremony – Date varies (usually in May)
- Asahna Bucha Day – Date varies (usually in July)
- Buddhist Lent – Date varies (usually in July)
- Queen’s Birthday (Mother’s Day) – August 12
- Chulalongkorn Day – October 23
- King Bhumibol Memorial Day – October 13
- End of Buddhist Lent (Awk Phansa) – Date varies (usually in October)
- King Bhumibol Memorial Day – October 13
- King Rama IX Memorial Day – December 5
- Constitution Day – December 10
- Christmas Day – December 25
Note that some holidays are based on the Thai lunar calendar, so their exact dates may vary from year to year. It’s always a good idea to check for updates closer to the current date or consult an official Thai government source for the most accurate and up-to-date information on public holidays in Thailand.
In Thailand, maternity leave spans a minimum of 98 days, with the initial 45 days being paid. Surrogate mothers are entitled to the full 98 days of maternity leave, but individuals becoming parents through surrogacy or adoption are not entitled to maternity leave benefits.
Pregnant employees hold the right to request less strenuous duties to support their health during their pregnancy.
While government employees are entitled to 15 days of paternity leave annually, private sector employees have no rights to time off work for parental or paternity leave under Thai employment law.
Sick leave entitlement is up to 30 days per year. If an employee takes medical leave for three working days or more, the employer may request a medical certificate from a doctor or a government medical facility. In cases where the employee is unable to provide a medical certificate from a doctor of first-class modern medicine or a government medical facility, an explanation must be provided.
Personal business leave allows employees three days annually to address personal matters.
Sterilisation leave is available for employees seeking paid time off for a medically necessary sterilisation procedure, certified by a medical practitioner.
Military service leave permits employees to take up to 60 days off for military exercises, with compensation at the basic pay rate.
Setting up a legal entity in Thailand
Thailand offers various business structures, including sole proprietorship, partnership, limited partnership, limited company, and public limited company. The most common choice for foreign investors is a limited company due to its flexibility and limited liability.
A limited company must have at least three shareholders, and a minimum of one director is required. Foreign nationals can hold shares, but the majority must be owned by Thai nationals. Directors and shareholders can be the same individuals.
It will also require a unique and approved business name. The name must be reserved with the Department of Business Development (DBD) to ensure exclusivity and compliance with Thai regulations.
Once you’ve reserved your company name, registered a Thai address, deposited the minimum capital requirements into a Thai bank account, and appointed shareholders and directors, the next step involves submitting the company registration application to the Department of Business Development. This includes the memorandum of association, list of shareholders, list of directors, and other relevant documents. Once approved, the company is officially registered.
Upon registration, your company must obtain a tax identification number and register for value-added tax (VAT) with the Revenue Department.
If foreign nationals will be employed, work permits must be obtained from the Department of Employment within the Ministry of Labor. This process involves proving that the company generates revenue and complies with Thai labour laws.
Entity set-up FAQs
Typically, between 16-20 weeks.
For most industries, the requirement is to have a local Thai shareholder hold at least 51% of the share capital.
There are some options whereby a Thai partner is not required such as a US-Thai treaty whereby US nationals or US companies can be fully owned without a Thai shareholder. The conditions to exercise the treaty is:
- Business activities must not fall under:
- Communications
- Transportation;
- Fiduciary functions
- Banking involving depository functions;
- Land Ownership, Exploitation of land or
- Other natural resources; and
- Domestic trade in indigenous agricultural products.
- A minimum of 51% of shares must be held by American citizens. In case of a US entity, the UBO must be US citizens as well.
- The board of directors must be American citizen(s) or Thai nationals in higher ratio.
The minimum capital requirements for a limited company in Thailand is 1 million baht.
Yes, you can establish a branch of your company in Thailand. You'll need to go through the process of registering with the Department of Business Development. This involves submitting required documents, including proof of the parent company's existence, financial statements, and details about the branch's intended activities.
- Private Limited Company and Public Limited Company: Registered address must be a physical location in Thailand, and a lease agreement or proof of ownership is typically required during the company registration process.
- Branch Office: Registered address within the country must be provided. This is where official documents and notices will be sent. A lease agreement or proof of ownership is usually required.
- Representative Office: Similar to Branch Office, there must be a registered address within the country. This is where official documents and notices will be sent. A lease agreement or proof of ownership is usually required.
Country nuances
- It is very important to ensure you are compliant as you can face heavy fines and prison terms for non-compliance
- There are 3 ways to compliantly gain 100% ownership of the company; obtain a foreign business licence, board of Investment promotion or Registration through the Treaty of Amnity (this option is only for US companies).
- If this is not possible the best option for foreigners is to have a Thai majority ownership, with a 51% (Thai partner) and 49% stake for foreigner.
- For every expat hired you must hire 3 local employees.
Interested in expanding into Thailand?
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