Employer Payroll Tax
Employee Income Tax
The daily minimum wage in Thailand varies dependent on region. It ranges from 308THB to 330THB.
Starting January 1st, minimum wage will increase to 313THB to 336THB.
When wages are paid is decided internally between the employee and employer, but are most commonly paid on the 27th. The employer also must pay employee’s salary in his or her workplace, unless agreed otherwise. If employers want to deposit salary into the employee’s bank account, they must obtain the permission of the employee to do so. No employee can be forced to receive money deposited into his or her bank account instead of the cash.
The maximum number of work hours is 8 per day, with a total of 48 hours weekly. Employees performing hazardous tasks work 7 hours per day and 42 hours weekly.
A 1-hour rest period during a working day is given to employees. They can break their rest period into parts, the minimum time being 20 minutes and the longest time being an hour. If the employee is engaged in such work where stoppages may damage its production or quality, the employer may request the former to work without breaks. The employee’s consent is required in this case.
An employee must consent to overtime and cannot exceed 36 weekly. Employees working overtime are entitled to overtime pay. Overtime pay is 1.5 times their normal rate or 2 times the rate for work on holidays.
Social security includes contributions to funds for sickness, maternity, disability, death, child allowance, and unemployment. Employers and employees contribute 5% of workers wages.
There are several types of pension in Thailand available to those who qualify for one of them. When people turn 55, they may receive a non-contributory pension, also called a subsistence allowance for the elderly. The non-contributory pension is paid to people over 55 who do not have any other income. This pension is paid by the Ministry of Interior. The amount people receive per month is low: only 500 THB.
Another pension is paid out of the Social Security fund. It is available at the age of 55 with at least 180 months of contribution. One necessary condition of receiving the pension is to cease employment. If the pensioner resumes working, the pension is suspended until the termination of the employment. This pension is 20 percent of the insured person’s average monthly wage in the last 60 months prior to retirement. The minimum monthly earnings used to calculate benefits are 1,650 THB. The maximum monthly earnings used to calculate benefits are 15,000 THB. Payment can be made monthly or as a lump amount.
Thai people may also contribute to the Provident fund, a voluntary savings scheme for retirement. Establishing the Provident fund is mandatory for companies listed on stock-exchange. Contributions are made both by employees and employers. Employees pay between 2 percent and 15 percent of their salary. Employers match the percentage paid by employees. Contributions larger than 15 percent must be approved by the Ministry of Finance. Like the Social Security Fund pension, this type of the pension can be paid in instalments or in one lump sum.
If by their retirement, insured people had more than 180 months of contributions, they can receive an old-age pension increment. That is, their old-age pension becomes increased by 1.5 percent of their average monthly wage in the last 60 months for each 12-month period of contributions exceeding 180 months.
There is also a pension for central government officials covered by the Government Pension fund (GPF). The GPF is a defined contribution scheme. All new governmental employees must join the Government Pension Fund as contributing members. They pay 3 percent of their salary. Employers also pay 3 percent. Governmental employees who had worked under a different, old defined benefit scheme is compensated by their employers. The latter pay additional 2 percent of salary for contributing and non-contributing employees. The GPF contributions are exempt from tax up to 300,000 THB annually. When employees retire, they do not pay taxes on their benefits.
Employees in the formal sector pay retirement savings scheme titled the National Pension Fund (NPF). This scheme operates with individual accounts on a specified contribution basis: employees and employers contribute 3 percent each within the first five years. After the 6th year, their contribution increases to 4 percent. After the 11th year, it climbs to 6 percent. Neither employees nor employers pay taxes on their contributions.
Public health services are funded in Thailand by the Department of Medical Services. It also funds hospitals in the country. Whereas medical and health services in Thailand are of good quality, public hospitals are often overcrowded, which motivates some people to seek help in private hospitals.
There are two types of health insurance in Thailand: public and private. Thai people who work and pay taxes are eligible to the government funded healthcare. Employees pay 5 percent of their wages to social security taxes, 1.5 percent of which is contributed towards medical insurance. The government and the employer also pay 1.5 percent. Employees contributing to this fund for at least 3 months during the last 15 months are entitled to free medical care.
There are also several private insurances in Thailand. They have been developed for the Thai market and are sold only in Thailand. Coverage limits of these insurance plans are considerably lower. Some of them offer inpatient costs of 2,000 THB per day. With such insurances, a doctor visit might cost 1,500 THB.
Unemployment in Thailand is managed by the Social Security office. Both the employee and the employer contribute 0.5 percent of the monthly salary. Thai government also contributes 0.25 percent to the social security program. Self-employed people do not receive unemployment benefits.
The rate of the unemployment benefit is based on the employee’s highest 3 months earnings in the last nine months. It is paid at 50 percent of the average daily rate. If the employee resigns voluntarily, he or she will receive 30 percent of salary up to ninety days within one year calculated according to the maximum amount of contributions. The amount is capped, however, at 15,000 THB. In that case when the unemployed person applies for the unemployment benefits repeatedly within one year, he or she will not receive it for longer than 180 days in total.
Employees start receiving unemployment benefits only after 8 days of unemployment. The duration of the payment of the benefits vary from 13 to 39 weeks within 12 months. Other conditions also apply. To claim the unemployment benefits, applicants must have contributed to the program for at least 6 months during the 15 months before losing their job. Unemployed people must also register at the State Unemployment Office within 30 days of their unemployment. To qualify for the unemployment benefits, they should not reject job training or decline a suitable job offer. If employees are fired from their work for misconduct, they are usually not eligible to receive unemployment money.
Employed expectant mothers are granted a minimum of 98 days of maternity leave. 45 days out of these 98 days are paid. Whether the remaining days are paid for or not depends on the employer’s agreement with the pregnant employee.
The rights enjoyed by fathers of newborn babies vary depending on the sector in which they work. Fathers working in the private sector receive no paternity leave. The public sector, by contrast, gives fathers 15 days of paternity leave to take care of their newborn babies.
No Statutory Regulation
Work related injury leave: If the employee needs to receive a medical treatment due to work-related injury or occupational disease, his or her work-related injury leave should not exceed more than 12 months. In case of serious injury or special circumstances, the work-related injury leave may be appropriately extended upon the confirmation by municipal labour ability certifying committee.
Yet again the extension shall not exceed 12 months. Injured employees are paid 100% of their daily wages while they receive the required medical treatment. Employers bear the full brunt of payments for employees’ injury compensation.
When employers want to discharge the employee, they are required to give them one month notice in advance of termination. Yet in those cases when employees are discharged for a reason connected with their behaviour or performance, employers are not expected to warn them in advance. Among these reasons are the following:
- Dishonesty at workplace or criminal offence against the employer.
- Harming the employer intentionally;
- Violating work rules or orders, provided a written warning has already been issued.
- Neglecting duties and, in so doing, causing harm to the employer.
- Being imprisoned.
When employees are discharged for misbehaviour, they are not paid severance money either.
If employers suspend their business temporary for a cause other than a force majeure, they pay to the employee 50 percent of the daily wage he or she received before the suspension of the business. The payment is given to the employee for the whole period his or her services are not required.
he employee or employer can terminate by giving notice at or before any time of payment to take effect at the following time of payment. 30 days advanced notice is common, and some ask for a longer 2 or 3-month notice period. As a rule, the duration of the notice period is stipulated in the employment contract.
If employees are not dismissed for the reasons mentioned in the section above, they are paid severance according to the following scheme:
Period of Employment
Amount of Severance Pay
More than 120 days but less than 1 year
30 days salary
At least 1 year but less than 3 years
90 days salary
At least 3 years but less than 6 years
180 days salary
At least 6 years but less than 10 years
240 days salary
10 years but less than 20 years
300 days salary
20 years or more
400 days salary
Employees working for less than 120 days for the same employer are not eligible to receive the severance payment. Other employees who do not qualify for severance payment are those who are hired for a fixed duration. As specified in the Labour Protection Act, these employees must have a written contract of no more than 2 years duration. To receive such a contract, employees usually do a special project not in the normal course of the employer’s business. Or it must be temporary or seasonal employment.
When the employer announces termination and requires employees to work until the end of the following month, employees can find other employment and resign before the specified date. If this is the case, employers do not pay severance payment to the resigned employee.
7% standard rate.