An Employer of Record (EOR) in Thailand acts as the legal employer for workers, handling payroll, benefits, and other employment tasks on behalf of the actual employer. Also known as a Global PEO, it simplifies hiring without the need for entity setup.
Discover the key considerations and essential details you should be aware of before you hire your remote team in Thailand.
On this page: Employment Contracts | Employment Laws | Social Security | Personal Income Tax | Employee Benefits in Thailand | Employment Types
Employment Contracts in Thailand
In Thailand, employment agreements are grounded in the principle of the freedom of contract. This means that employees and employers can freely negotiate agreements where services are exchanged for remuneration, provided the activity doesn't violate public order or morals.
There are two primary types of employment agreements. The "contract for work" applies to workers hired as independent contractors for specific jobs. On the other hand, the "contract of services" represents the conventional employee-employer relationship. While a "contract of services" may bring increased regulation and liability for the employer, Thai labor law generally safeguards all employment arrangements against potential abuses by employers.
To ensure compliance, employers must meet the minimum requirements outlined in the Labor Protection Act and ministerial regulations.
Work-From-Home Arrangements in Thailand: A Legal Framework
Enacted on 19 March 2023 and effective from 18 April 2023, Thailand's Labour Protection Act (No. 8) B.E. 2566 introduces Section 23/1, addressing work-from-home arrangements. Employment contracts can now formally include agreements specifying periods, working hours, rest time, and more. This ensures transparency and adherence to labor regulations, granting employees the right to disconnect after regular hours and equal benefits for both on-site and remote workers.
Employer Responsibilities and Additional Notes
Employers now bear the responsibility, as per employment contracts, to ensure the well-being of remote staff, providing necessary equipment and adhering to data protection regulations. This law applies selectively to employees capable of effectively working from home. Guidelines from the Department of Labour Protection and Welfare offer further clarity on the law's implementation, marking a significant stride in worker protection in the context of work-from-home arrangements in Thailand.
Employment Laws in Thailand
In Thailand, the legal landscape for employers navigating employment laws involves several crucial aspects.
- Minimum Wages: The minimum wage in Bangkok, revised from January 1, 2024, is THB 363.00 per day. Monthly, the minimum salary in Bangkok is THB 10,890. This revision is applicable to various provinces in Thailand.
- Payroll Cycle: Generally, the payroll cycle in Thailand is monthly, with employees receiving their salaries on the last working day of the month. However, some companies may adopt alternative schedules based on internal policies and agreements.
- 13th Month Pay: Unlike in some countries, the 13th month pay cycle is not mandatory in Thailand.
- Working Hours: The normal working time should not exceed eight hours per day and forty-eight hours per week, with exceptions for certain hazardous jobs. Employers and employees must agree on the specifics.
- Overtime: Thai labor law mandates rest periods during work and stipulates overtime pay at 150% of the hourly rate for extra hours. Overtime during holidays is compensated at 300% of the hourly rate.
- Probation Period: The probation period can last up to 119 days, and it's not mandatory. During this period, neither the employer nor the employee is legally obligated to give notice before termination.
- Notice Period: After probation, the minimum notice period is 30 days in writing, with the employment contract potentially specifying a longer notice period. Termination with cause may exempt employers from notice requirements.
- Employee Records: Employers with 10 or more regular employees must establish written rules and regulations in Thai, display them on the premises, and submit a copy to the Department of Labor Protection and Welfare.
- Termination and Severance Pay: Severance pay varies based on the employment period, ranging from 30 days’ wages for at least 120 days to 400 days’ wages for twenty years or more.
Employment Period
Severance Pay
120 days to < 1 year
30 days' wages
1 year to < 3 years
90 days' wages
3 years to < 6 years
180 days' wages
6 years to < 10 years
240 days' wages
10 years to < 20 years
300 days' wages
20 years or more
400 days' wages
Personal Income Tax in Thailand
Thailand's personal income tax system operates on a progressive scale tied to income levels. Income sources such as salaries, wages, pensions, investments, rental income, and business profits are all considered in the taxable income calculation. Capital gains are included in this computation. The tax rates progressively increase, ranging from exemption for income up to 150,000 THB to a 35% tax rate for income exceeding 5,000,000 THB.
Tax Rates:
- Up to 150,000 THB: Exempt from tax.
- 150,001 - 300,000 THB: 5% tax rate.
- 300,001 - 500,000 THB: 10% tax rate.
- 500,001 - 750,000 THB: 15% tax rate.
- 750,001 - 1,000,000 THB: 20% tax rate.
- 1,000,001 - 2,000,000 THB: 25% tax rate.
- 2,000,001 - 5,000,000 THB: 30% tax rate.
- Over 5,000,000 THB: 35% tax rate.
Various deductions and allowances exist, providing relief for taxpayers. Personal allowances cover the taxpayer, their spouse, and dependent children. Employment expenses, with a standard deduction of 50% of salary (up to 100,000 THB), and deductions for medical expenses and specific donations contribute to reducing the taxable income.
Filing tax returns is an annual requirement, generally due by March 31st of the following year. Electronic filing is encouraged, and withholding tax by employers helps alleviate immediate tax burdens. Distinctions exist in the tax treatment of residents and non-residents, with the latter taxed only on income earned within Thailand. Furthermore, international tax treaties may influence the overall tax liability for individuals.
Employee Benefits in Thailand
Annual Leave:
Employees in Thailand enjoy a minimum of 30 calendar days of annual leave per year. This leave can be accrued and used throughout the year, offering flexibility for employees to schedule time off as needed. Many companies allow for variations in scheduling to accommodate individual preferences.
Sick Leave:
Workers are entitled to up to 30 working days of sick leave per year. For illnesses extending beyond three days, a doctor's certificate may be required. This provision ensures that employees can take the necessary time to recover without compromising their financial stability.
Maternity/Paternity Leave:
Mothers in Thailand are granted up to 16 weeks of paid maternity leave, which can be taken both before and after childbirth. Fathers, on the other hand, receive 4 weeks of paid paternity leave. This can be taken at any time within the first year after the child's birth and can be shared with the mother.
Family Leave:
Employees are entitled to up to 15 days of family leave per year. This can be utilized for caring for sick family members or attending funerals, recognizing the importance of supporting employees during challenging personal times.
National Holidays:
Thailand observes 13 official national holidays, which are considered paid leave days for most employees. These holidays contribute to the overall leave entitlement, providing designated breaks throughout the year.
Optional Leave (Subject to Company Policy):
- Compassionate Leave: Typically ranging from 3-5 days, this leave is for attending funerals or grieving the loss of a loved one.
- Marriage Leave: Some companies offer 3-5 days of paid leave for employees getting married.
- Study Leave: Educational leave may be granted to employees pursuing further education, with the number of days and specific conditions varying.
- Sabbatical Leave: Though usually unpaid, some companies may offer partial salary continuation for extended leave periods focused on personal or professional development.
Additional Points:
- Some companies may offer extra paid leave days based on seniority or performance.
- Employees can accumulate unused annual leave, up to a specified limit set by the company.
- Employers are obliged to pay employees their regular salary during paid leave periods.
- Specific leave policies and procedures may vary depending on the company and industry.
Employment Types in Thailand
Employee
In Thailand, employment contracts are referred to as "hire of services" contracts. It is an agreement where an individual (the employee) agrees to provide services to another person or entity (the employer) in exchange for remuneration. Employment can be on a full-time or part-time basis, and it can have a definite or indefinite duration. Employees are entitled to various protections and rights under the Labor Protection Act and the Labor Relations Act.
Independent Contractor
An independent contractor in Thailand is engaged through a "hire of work" contract. This type of contract involves a person (the contractor) undertaking specific work for a recipient of services, who agrees to pay remuneration upon completion of the work. Unlike employees, independent contractors have more independence and are not entitled to the same employment rights and protections provided by the Labor Protection Act and the Labor Relations Act.
Agency Worker
According to the Labor Protection Act, when an employer engages a third party to recruit workers for specific tasks that are part of the employer's manufacturing process or business operations, the employer becomes the joint employer of the workers. The employer assumes responsibility for the workers' rights and benefits, regardless of whether they directly supervise the work or handle wage payments. The workers have the right to claim benefits from both the employer and the third party. However, the employer can seek reimbursement from the third party if there is an agreement in place.
These different employment types in Thailand carry specific implications and obligations for both employers and workers. Understanding the distinctions is crucial to ensure compliance with labor laws and to protect the rights of employees and contractors.
Thailand Overview
| Overview | |
| Continent | Asia |
| Country | Thailand |
| Capital | Bangkok |
| Time zone | UTC+07:00 (THA) |
| Total Time zones | 1 |
| Working hours per week | 40 |
| Working week | Monday–Friday |
| Typical hours worked | 8 |
| Personal Tax filing deadline | 31st Mar |
| Financial Year | 1 October – 30 September |
| Date format | dd/mm/yyyy |
| Currency | Thai Bhat (THB) |
| VAT | the standard rate is 7% |
In Thailand, leveraging the services of an Employer of Record (EOR) is pivotal for businesses venturing into the local employment landscape. The EOR takes charge of intricate compliance matters, manages payroll intricacies, and handles administrative intricacies, freeing up companies to focus on their core objectives without getting bogged down by regulatory complexities. This collaborative approach ensures that employees are brought on board with contracts aligning with Thailand's labor laws and practices. As the Thai business environment evolves, the role of an EOR becomes increasingly vital, offering businesses a streamlined entry and growth path in Thailand while maintaining compliance and fostering a conducive work environment.
EOR Thailand | EOR Vietnam | EOR Indonesia | EOR Malaysia | EOR Singapore
Social Security in Thailand
In Thailand, the social security system is mandatory for formal sector employees, covering healthcare, pensions, and more. Here's a concise overview:
Contribution Rates:
Contribution Base:
Benefits Covered:
Contributions are due by the 15th of the following month. Social security registration is mandatory for Thai companies and foreign workers legally employed in Thailand, offering them equal entitlement to benefits.