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Hiring in Thailand Read on to find out the employment norms (like taxes, payroll and benefits) and EOR (Employer on Record) norms in Thailand.
Employment Norms in Thailand
Thailand is a culturally rich country in the Asian continent. It has a constitutional monarchy. The country is famous for its ancient temples, monuments, and natural landscape. The scenic landscape attracts thousands of tourists from all over the world. Thailand is known for its ancient cultural heritage. It has a flourishing economy that attracts investors here.
General Information:
- The Thailand currency is Thailand Baht (THB).
- Bangkok is the capital of Thailand.
- Thai is the official language of Thailand. Documentation should be done in the Thai language.
- As of 2022, the GDP of Thailand was reported to be 1849.27 Billion USD.
Labor laws in Thailand cover areas such as wages, working hours, health benefits, social security, etc. It protects employees from any kind of discrimination in the workplace.
Table of Contents
- Agreements
- Onboarding Process
- Visa
- Minimum wage
- Payroll cycle
- Annual bonus
- Health Benefits
- Working Hours and Overtime
- Leaves
- Social Security
- Taxes for Employers
- Taxes for Employees
- Probation
- Termination
- Severance Pay
- Employees or Contractors
- Final Words
AgreementsOnboarding ProcessVisaMinimum wagePayroll cycleAnnual bonusHealth BenefitsWorking Hours and OvertimeLeavesSocial SecurityTaxes for EmployersTaxes for EmployeesProbationTerminationSeverance PayEmployees or ContractorsFinal Words
Agreements
The agreement can be in oral or written format. If requested, the written agreement must be in Thai or any other translated language. Thailand has two types of agreements:
- Indefinite or open-term agreement: If an employment agreement isn't assigned otherwise, it is regarded as a permanent employment contract. A permanent employment agreement may specify either full or part-time work. Employees with this contract often receive all types of statutory perks and rights.
- Fixed-term agreement: This type of agreement in Thailand must not be prematurely terminated. Fixed-term employment offers employment security along with the advantages that a permanent employment contract could have to offer.
Onboarding Process
The hiring process in Thailand is as follows:
- A job description is prepared by the HR teams. They collaborate with the unit that has a job vacancy.
- The description is then uploaded on the company's official website along with other platforms like LinkedIn.
- Some companies may even publish job vacancies in local newspapers. The advertisement can remain active for a couple of days to a week.
- Candidates apply for the job by proving their eligibility. They are further shortlisted based on rounds of screenings and interviews.
- Final shortlisted candidates then negotiate their terms and conditions with the employer. After the mutual agreement, the candidate is hired as an employee.
Visa
Thailand has 3 main types of Visas:
- Short-term visa: Visas that are valid for 30 days (single entry) and 90 days (multiple entries) duration are under this category. This type of visa includes a tourist visa, a medical visa, and a project visa.
- Long-term visa: The long-term visa is issued for up to 10 years. This type of visa includes purposes like employment, entry, business, and research. It can be extended for 1 year.
- Transit visa:Visas extended as a permit to travelers for crossing the country. It is issued for 15 days. This visa can be granted on arrival as well.
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Minimum wage
- The minimum wage in Thailand varies regionally. It is usually fixed at 331 THB to 336 THB per day.
Payroll cycle
The payroll cycle in Thailand is monthly.
Annual bonus
There is no compulsion or mandatory provision of providing an annual bonus or 13th-month pay in Thailand.
Health Benefits
- The health and safety of the employee are the responsibility of the employer. Employers have to maintain healthy working conditions.
- Employees are also required to disclose their health issues if any.
Working Hours and Overtime
- Work hours:An employee is expected to work about 8 hours per day. The standard work hour in Thailand must not exceed 40 hours per week
- Break: Employees are entitled to an unpaid lunch break of 1 hour between consecutive working hours.
- Overtime: Overtime in Thailand is taken voluntarily. Overtime must not exceed 36 hours per week. The employer pays 150% of the regular wage for overtime done on a normal day and 200% for overtime done on a holiday.
Leaves
Sick Leave
- An employee is entitled to 30 days of paid sick leaves in Thailand. An employee receives a 100% salary for their sick leaves from the employer.
Maternity leaves
- A pregnant female employee is entitled to 98 days of paid maternity leave in Thailand. The first 45 days are paid by the employer and the rest by the social security fund
Paternity leaves
- Government employees get 15 days of paternity leaves in Thailand but there isn't any provision for paternity leaves for private employees.
Annual leaves
- Employees are entitled to 6 days of paid annual leave after completing one year of employment.
Other leaves
- Business leave- 3 days of business leaves per year, which is fully paid by the employer.
- Military service leaves- 60 days of military leave is given to the employee if they need to undergo the training.
- Sterilization leaves: Paid sterilization leaves are given to employees who want to undergo the sterilization process. The procedure should be verified by the medical practitioner.
- Education leaves: Employees can avail the of unpaid education leaves, if they want to take any skill assessment programs mandated by the government or some training that is related to their work.
Public Holidays (for the Calendar year 2023)
- New Year's Day (1st January)
- New Year holiday (2 Jan)
- Makha Bucha day (6 Mar)
- Chakri day (6 Apr)
- Songkran New year Thai water festival (13-15 Apr)
- Labor day (1 May)
- Coronation day (4 May)
- Vishaka Bucha day/ Birthday of HM Queen Suthida (3 & 5 Jun)
- Birthday of HM King Maha Vajiralongkorn (28 Jul)
- Asahna Bucha day (1 Aug)
- Birthday of the HM Queen Sirikit The Queen Mother (12 & 14 Aug)
- HM King Bhumibol Adulyadej Memorial day (13 Oct)
- Chulalongkorn day (23 Oct)
- National day/ King Bhumibol Birthday Commemoration day (5 Dec)
- Constitution day (10 &12 Dec)
- New Year's eve (31 Dec)
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Taxes for Employers
- Pension contribution - 3%
- Health insurance - 1.5%
- Unemployment insurance - 0.5%
- Work injury insurance contribution - 0.2% - 1%
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Taxes for Employees
- Pension contribution - 3%
- Health insurance - 1.5%
- Unemployment insurance - 0.5%
An employee has to pay a range of income taxes according to the annual income:
- 0 to 150,000 THB - 0%
- 150,001 to 300,000 THB - 5%
- 300,001 to 500,000 THB - 10%
- 500,001 to 750,000 THB - 15%
- 750,001 to 1,000,000 THB - 20%
- 1,000,001 to 2,000,000 THB - 25%
- 2,000,001 to 5,000,000 THB - 30%
- Over 5,000,000 THB - 35%
Probation
The probationary period in Thailand is of up to 4 months. It must not extend more than that.
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Termination
The following scenarios can result in the employment relationship being terminated:
- Resignation by the employee
- Retirement age
- Expiration or non-renewal of the job contract;
- Employee dismissal for grave wrongdoing (such as theft, fraud, etc.);
- Collective dismissal for financial reasons (such as bankruptcy, restructuring, etc.).
The employee must get a notice period of 30 days before the termination. The termination letter must state a valid reason for the termination.
Severance Pay
Severance pay in Thailand is based on the tenure of the employee. It follows:
- 30 days pay - for a tenure of 120 days to 364 days
- 90 days pay - for a tenure of 1 year to 2 years
- 180 days pay - for a tenure of 3 years to 5 years
- 240 days pay - for a tenure of 6 years to 9 years
- 300 days pay - a tenure of less than 20 years
- 400 days pay - for a tenure of 20 years and more than 20 years
Employees or Contractors
- The company pays a duty of payment of overhead surcharges if found guilty.
- The company has to pay all the related interests and sanctions on the behalf of a misclassified employee
Final Words
The Kingdom of Thailand is a flourishing economy. Its developing infrastructure is alluring to investors. The country has a medium rank in the 'ease of doing business' index. It has employment rules that protect employees from discrimination and misclassifications. Thailand is a suitable place for corporates looking for expanding their business outreach.
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