Guide to employment, payroll and benefits in

Thailand

Rivermate offers complete payroll, benefits and compliance services for

Thailand

01. Overview

Last updated: 

August 19, 2021

Currency
Thai Baht
Capital
Bangkok
Ease of doing business
80.1
Language
Thai
Population
69799978
GDP growth
3.91%

02. Grow your team in

Thailand

with Rivermate

Payroll, benefits, taxes, and compliance can be difficult to manage in

Thailand

, particularly if you don't have established local relationships. You can hire employees in

Thailand

effectively, conveniently, and in full compliance with all relevant labor laws using Rivermate's global employment solution. We handle the responsibilities and legal risks associated with foreign employment so you can concentrate on growing your company.

03. Summary

Thailand, formerly known as Siam and now known as the Kingdom of Thailand, is a Southeast Asian republic. With a population of over 66 million people, it is situated in the heart of the Indochinese Peninsula, spanning 513,120 square kilometers. Thailand is bordered on the north by Myanmar and Laos, on the east by Laos and Cambodia, on the south by the Gulf of Thailand and Malaysia, and on the west by the Andaman Sea and Myanmar's southernmost tip. It also has maritime boundaries with Vietnam to the southeast in the Gulf of Thailand, and Indonesia and India to the southwest in the Andaman Sea. Bangkok is the capital and largest city of Thailand. Thailand is a constitutional monarchy and parliamentary democracy on paper; however, it has had numerous coups and periods of military rule in modern history. Tai peoples began migrating from southwestern China to mainland Southeast Asia in the 11th century, with the exonym Siamese making the first recorded mention of their presence in the area in the 12th century. The area was dominated by various Indianized kingdoms such as the Mon kingdoms, the Khmer Empire, and Malay states, which competed with Thai states such as the Kingdoms of Ngoenyang, Sukhothai, Lan Na, and Ayutthaya. A Portuguese diplomatic mission to Ayutthaya, which became a regional force by the end of the 15th century, began recorded European interaction in 1511. During the reign of cosmopolitan Narai, Ayutthaya reached its pinnacle, then gradually declined until it was defeated in the 1767 Burmese–Siamese War. Taksin quickly reunified the divided territory and created the Thonburi Kingdom, which lasted only a few years. Buddha Yodfa Chulaloke, the first king of the new Chakri dynasty, succeeded him in 1782. During the period of Western imperialism in Asia, Siam was the only country in the region to resist being colonized by foreign forces, despite being forced to cede land and trade concessions in unequal treaties. During Chulalongkorn's reign, the Siamese government was centralized and converted into a modern unitary absolute monarchy. Siam sided with the allies in World War I, a political decision to amend the unjust treaties. It became a constitutional monarchy in 1932 and changed its official name to Thailand, which was a satellite of Japan during World War II. In the late 1950s, a military coup led by Field Marshal Sarit Thanarat resurrected the monarchy's traditionally dominant presence in politics. Thailand became a key ally of the United States, and as a member of the SEATO, which failed to prevent further communist advances in Southeast Asia, it played an anti-communist role in the region. Thailand has alternated between democracy and military rule since the mid-1970s, with the exception of a brief era of parliamentary democracy in the mid-1970s.

04. Public holidays

05. Types of leave

Paid time off

An employee who has worked consistently for a year is entitled to six days of yearly vacation. The employee's yearly leave is prorated if he or she works for less than a year. Employers occasionally grant employees more than 6 days of yearly leave on their own initiative. If employees do not use their annual leave vacation within a year, it is carried over and added to the next year's annual leave. However, some businesses refuse to roll over unused annual leave to the following year, canceling it after the current year finishes.

Public holidays

Thailand recognizes sixteen public holidays.

Sick days

Employees are allowed to take up to 30 days of paid sick time per year. If an employee is away for more than three days in a row, the employer has the right to request a doctor's letter confirming the sickness.

Maternity leave

Expectant women who are employed are entitled to a minimum of 98 days of maternity leave. 45 days are paid out of a total of 98 days. The employer's agreement with the pregnant employee determines whether the remaining days are compensated or not.

Paternity leave

The rights that dads of newborn children have differ depending on the industry in which they work. Paternity leave is not available to fathers who work in the private sector. Fathers in the public sector, on the other hand, are entitled to 15 days of paternity leave to care for their newborn children.

Parental leave

There are no statutory regulations regarding paternity leave in Thailand.

Other leave

Work-related injury leave: If an employee requires medical treatment as a result of a work-related injury or occupational illness, the employee's work-related injury leave shall not exceed 12 months. Work-related injury leave may be appropriately extended after certification by the local labor ability certifying committee in the event of significant injury or unusual circumstances.Again, the extension will be limited to 12 months. Employees who are injured are paid 100% of their daily salaries while undergoing medical care. Employers are responsible for the whole cost of employee injury compensation.

06. Employment termination

Termination process

An employment contract may be cancelled by either the employer or the employee at the conclusion of the contract period (if the employment contract is for a specified time). Employers may fire an employee for cause or misconduct without providing notice or paying severance. In any other case, the employer is required to provide notice. The notice time is determined by the employee's pay interval, which may not exceed three months. Severance pay ranges between 30 and 300 days, depending on the duration of employment of the employee.

Notice period

The employee or employer may terminate by giving notice at or before any time of payment that the termination will take effect at the next time of payment. 30 days advance notice is customary, and some employers require a longer notice period of two or three months. Generally, the notice period is specified in the employment contract.

Severance pay

If employees are not terminated for the reasons specified in the preceding section, they are compensated with severance pay in accordance with the following scheme. If the employment period exceeds 120 days but does not exceed a year, the severance pay is equivalent to 30 days' salary. If the employment period is between one and three years, the severance pay is equivalent to 90 days' salary. If the employment period is between three and six years, the severance pay is equivalent to 180 days' salary. If the employment period is between six and ten years, the severance pay is equivalent to 240 days' salary. If the employment period is between 10 and 20 years, the severance pay is equivalent to 300 days' salary. If the employee has worked for the company for more than 20 years, the severance pay is equivalent to 400 days' salary. Employees who have worked for the same employer for less than 120 days are not eligible for the severance payment. Other employees who are not eligible for severance pay are those hired on a fixed-term basis. According to the Labour Protection Act, these employees must have a written contract with a maximum duration of two years. To qualify for such a contract, employees typically complete a special project that is not part of the employer's normal business. Alternatively, the employment must be temporary or seasonal. When an employer notifies employees of their impending termination and requires them to work until the end of the following month, employees can seek alternative employment and resign prior to the specified date. Employers do not pay severance pay to resigned employees in this case.

Probation period

While Thailand does not require a probationary period, Thai law does provide for severance pay for employees who have worked for 120 days or more and are terminated without cause. As a result, many employers in Thailand establish probation periods of up to 119 days in order to avoid paying severance.

07. Working hours

General

The maximum daily work hours are eight, for a total of 48 hours per week. Employees performing hazardous tasks work seven hours per day for a total of forty-two hours per week.


Employees are provided with a one-hour rest period during the workday. They can divide their rest period into segments, with a minimum of 20 minutes and a maximum of an hour. If the employee is performing work where interruptions could jeopardize production or quality, the employer may require the employee to work without breaks. Consent of the employee is required in this case.

Overtime

An employee must consent to overtime and cannot work more than 36 hours per week. Overtime pay is due to employees who work overtime. Overtime pay is 150 percent of their regular rate or 200 percent for holiday work.

08. Minimum wage

General

The daily minimum wage in Thailand varies according to location, ranging from 313THB to 336THB.

09. Employee benefits

General

Thailand provides universal healthcare via three systems: the civil welfare system for government workers, social security for private employees (expats and nationals), and a universal health plan accessible to all other Thai citizens.

Employees are assigned a local hospital where they may get free treatment from the social security fund. The quality of treatment varies across hospitals, and many are overcrowded and lack a customer service approach.

As a supplementary benefit, a company may offer supplemental health insurance to an employee. Most executives and expats seek additional health and life insurance, and a small business may offer a stipend in place of obtaining insurance.

While not required, a provident fund is a popular employer perk that encourages retirement savings. Employer contributions must always be equal to or higher than employee contributions.

Employee contributions are advantageous since they are pre-tax. Employee contributions will be treated as pre-tax savings deposits. The contribution rate should be no less than 2% but no more than 15% of earnings (depending on an agreement between the employer and the trustee). Employer payments will be treated as a subsidy to employees. The benefit offering may be made subject to a variety of criteria, including working time, membership, job title, and pay rate.

In the event of retirement or termination, the Provident Fund's cumulative balance will be paid in a lump payment at the end of the membership period.

10. Why Rivermate as your Employer of Record / PEO?

Establishing an entity in

Thailand

to hire a team takes time, money, and effort. The labor law in

Thailand

has strong worker employment protection, requiring great attention to details and a thorough awareness of local best practices. Rivermate makes expanding into

Thailand

simple and effortless. We can assist you with hiring your preferred talent, managing HR and payroll, and ensuring compliance with local legislation without the hassle of establishing a foreign branch office or subsidiary. Our PEO and Global Employer of Record solutions in

Thailand

give you peace of mind so you can focus on running your business.

Please contact us if you'd like to learn more about how Rivermate can help you hire employees in

Thailand

via our Employer of Record / PEO solution.

Ready to get started? Our friendly staff is ready to assist you with all your questions, let's connect.