How To Hire And Pay Employees In Thailand

Emerald Technology's guide to hiring employees in Thailand

CURRENCY

Thai Baht is the official currency of Thailand. Its currency symbol is ฿, THB.

CAPITAL CITY

Bangkok officially known in Thai as Krung Thep Maha Nakhon is the capital and most populous city.

LANGUAGE

Thailand is home to 71 living languages, but Thai is it's official language.

POPULATION The current population of Thailand is 69.95 Million 2021 based on World bank numbers.
PAYROLL FREQUENCY

Salaries are paid monthly and employers are not required to, but it is customary to pay a 13 month salary bonus.

PUBLIC HOLIDAYS

Thailand has 16 public holidays.

GROW YOUR TEAM IN THAILAND

NO ENTITY, NO PROBLEM

To start growing your team in Thailand, you must establish a local entity- including an account with a local bank, a local office and an address registered as a subsidiary. This allows you to manage payroll, tax, benefits and compliance for your employees, but can take several months. 

Emerald can hire and payroll your workers, quickly and compliantly with their ready to go entity. Make growing your team simple with Emerald as a global partner.

PROS AND CONS OF HIRING IN THAILAND

Hiring in Thailand opens a key strategic location between both India and China, which can help your business penetrate the Asian market and unlock new potential. Moreover, the Thai government caters towards supporting businesses in their expansion and thus the registration process is made relatively uncomplicated compared to other ASEAN countries. For instance, Thailand is currently ranked 17th in the World Bank’s ease of doing business rankings. Despite this, Thailand has a corporate tax level of 30% on net income and investment regulations can often be complicated, with increased government intervention for foreign investors.

WHY THAILAND S IS GOOD FOR REMOTE WORKERS

Thailand hosts one of the largest communities of digital nomads globally alongside over four million foreign workers. With an emphasis on remote working, there are many public spaces dedicated to digital nomads for them to utilise and socialise with each other, further building the community. Thailand has become favoured by digital nomads for a multitude of reasons including its low cost of living, reliable telecom infrastructure, and low tax rates.

START GROWING YOUR REMOTE WORKFORCE NOW

WORKING TIME AND OVERTIME IN THAILAND

The normal working day in Thailand is eight hours. If the work is physically exhausting, the maximum number of hours is usually seven per day and 42 per week. Employees must be given at least one hour's break per day. Overtime cannot exceed 36 hours per week and must be paid at a rate of 1.5-3x the normal hourly salary of qualifying employees. At weekends, overtime pay is equal to 3x the base salary. Non-qualifying employees, such as officers of the company, should be paid 2x their salary.

ANNUAL LEAVE AND PUBLIC HOLIDAYS

Employees are entitled to a statutory minimum of six vacation days per year, after completing their first year of service. In practice, it is common to grant professional employees 10-15 days of paid vacation per year.

There are 16 public holidays.

January 1st: New Year's Day 

January 3rd: New Year Holiday 

February 1st: Chinese New Year

February 16th: Makha Bucha Day 

April 6th: Chakri Day 

April 13th-15th: Songkran Festival 

May 2nd: Labor Day 

May 13th: Royal Ploughing Ceremony 

May 16th: Visakha Bucha Day 

June 3rd: Her Majesty the Queen's Birthday 

July 13th:Asahna Bucha Day 

July 28th: King Vajiralongkorn's Birthday 

October 13th: Passing of His Majesty the Late King 

October 23rd: Chulalongkorn Memorial Day 

December 5th: His Majesty the Late King's Birthday 

December 10th: Constitution Day 

December 25th: Christmas Day 

PROBATION PERIOD IN THAILAND

Probation periods are typically no more than 120 days. This is not a statutory requirement.

RESIGNATION AND DISMISSAL IN THAILAND

An employer or employee can terminate an employment contract by giving notice in writing to the other party. This is generally a one month notice period, unless other terms are provided for under the employment contract. The employer does not need to give notice (or payment in lieu of notice) if the employment relationship is terminated due to serious misconduct by the employee. Statutory severance pay is based on the employee's length of service within the company, according to the following schedule:

  • 120 days-1 year’s service: 30 days’ basic salary
  • 1-3 years’ service: 90 days’ basic salary
  • 3- 6 years' service: 180 days’ basic salary
  • 6-10 years’ service: 240 days’ basic salary
  • 10-20 years’ service: 300 days’ basic salary
  • 20+ years’ service: 400 days’ basic salary

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

RESTRICTIVE COVENANTS

Restrictive covenants that protect an employer's legitimate business interests are usually enforceable to the extent that they are reasonable and fair to the parties. Non-competition clauses, as well as customer and employee non- solicits, do not generally stipulate restrictions for a period of more than two years, and should specify a clear geographical area (such as Thailand).

READY TO HIRE YOUR EMPLOYEES IN THAILAND?

CONTRACT OF EMPLOYMENT IN THAILAND

There is no requirement under Thai labour law to have a written employment contract. However, in practice, it is advisable to set out key terms and conditions of employment in writing.

MATERNITY LEAVE IN THAILAND

Pregnant employees are entitled up to 98 days of maternity leave; 45 of which are paid by the employer, 45 by the social security fund, and the remaining 8 unpaid (or paid by the employer by prior agreement). There is no statutory requirement for paternity leave.

SICKNESS LEAVE IN THAILAND

Under Thai labour law, an employee is entitled to 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. Days taken off due to an injury or illness encountered at work cannot be deducted from the sick leave balance.

SOCIAL SECURITY

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 THB 15,000 per month. 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 contribute an additional 5% each.

HEALTHCARE AND INSURANCE

Thailand has one of the world’s best healthcare systems, having opened universal health coverage to all citizens in 2002. Most Thai citizens, therefore, receive health coverage through that universal coverage scheme, with civil servants and their families receiving coverage via the civil service welfare system. Private employees are often covered by a social security system that is supported by payroll contributions. Foreign citizens who hold private sector jobs in Thailand may be eligible for this coverage.

Employment of

FOREIGN NATIONALS IN 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.

Visas in the Thailand

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. 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. Work permits are usually granted for one year, after which they can be renewed.

Salary Taxes

MINIMUM WAGE IN THAILAND

Thailand's minimum wage ranges from THB 300 per day, depending on the cost of living in various provinces.

INCOME TAX

Effective from 1 January 2023, the graduated rates will be as follows:
Net Taxable Income 

Rate on Excess

0 - 150,000 Exempt
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%
5,000,00+ 35%

 

SALARY PAYMENTS IN THAILAND

The payroll cycle in Thailand is generally monthly and is usually paid on the last working day, as agreed within the employment contract. Though not required by law, it is customary for employers to pay a 13th month salary.

SOCIAL SECURITY CONTRIBUTIONS IN THAILAND

Employees contribute 5% of their salary to social security, in addition to a 5% contribution by their employer and a further 5% by the government.

Contributions are capped at a qualifying earning threshold of THB 15,000 per month

SOCIAL CONTRIBUTIONS RATES IN THAILAND

Employers are required to pay 4% and employees 8% as social security contribution.

WORKER MISCLASSIFICATION IN THAILAND

Similar to other countries, Thailand has strict rules on classifying individual contractors and full-time employees differently. Misclassifying your workers can put your business at risk of fines.

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