How To Hire And Pay Employees In Thailand

Hiring in Thailand opens a key strategic location between India and China, which can help your business penetrate the Asian market and unlock new potential. Moreover, the Thai government is supportive of businesses looking to expand and thus the registration process is relatively uncomplicated compared to other ASEAN countries. Thailand is currently ranked 17th in the World Bank’s Ease of Doing Business rankings.

That said, 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.

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 

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

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.

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.

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.

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.

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.

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.

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.

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

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.

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.

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