Thailand

Registrations and Establishing an Entity

To operate payroll in Thailand, businesses must register with the Revenue Department, Social Security Office, and the Department of Business Development (DBD). Entity options include:

• Limited Company
• Branch Office
• Representative Office

Treaty of Amity

Under the U.S.-Thailand Treaty of Amity, U.S. citizens and businesses receive special privileges, including the ability to hold a majority share in a Thai company and operate without foreign business restrictions, provided certain criteria are met.

Banking

Employers must open a local bank account in Thailand for paying employees and remitting statutory contributions. Typical banking hours are 8:30AM to 3:30PM, Monday to Friday.

Working Week

The standard working week in Thailand is Monday to Friday, with a maximum of 48 hours per week, typically 8 hours per day. Office hours are generally 8:30AM to 5:30PM with a one-hour lunch break.

Employment Law

Annual Leave

Employees are entitled to at least 6 days of paid annual leave after one year of employment. Employers may offer additional leave based on company policy.

Maternity Leave

Female employees are entitled to 98 days of maternity leave, including holidays. The employer pays for the first 45 days, and the remaining 53 days are paid by Social Security, provided the employee has contributed for at least 7 months.

Paternity Leave

Paternity leave is not mandatory under Thai law, but government officials may receive up to 15 days. Some private employers offer discretionary paternity leave.

Sick Leave

Employees are entitled to up to 30 days of paid sick leave per year. A medical certificate is required if the leave exceeds three consecutive days.

National Service

Thailand maintains a conscription system for male citizens aged 21, selected via lottery. Employers must allow conscripts to fulfill military duties without penalty.

Personal Business Leave

Employees are entitled to at least 3 days of paid personal business leave annually.

Other Leave Types

While not required by law, some companies provide compassionate (bereavement), study, or examination leave. Public holiday pay is usually mandated for national holidays.

Tax & Social Security

The Thai tax year runs from 1 January to 31 December.

Individual Income Tax

Thailand has a progressive personal income tax system. Residents are taxed on worldwide income; non-residents are taxed only on Thai-sourced income.

Income Tax Rates (2024):

Social Security Fund (SSF)

Both employers and employees must contribute 5% of wages monthly, capped at THB 750. The fund covers unemployment, illness, disability, and maternity.

Provident Fund / Welfare Fund

Voluntary employer-employee matched fund offered by some companies. Aimed at retirement savings and employee welfare.

Workmen Compensation Fund (WCF)

Employers are required to contribute to this fund to cover workplace accidents. The contribution rate ranges from 0.2% to 1% depending on risk classification.

Monthly Reporting

Employers must submit monthly contributions to:

• Revenue Department (withholding tax)
• Social Security Office
• Workmen Compensation Fund (annually)

Yearly Reporting

Employers must issue withholding tax certificates to employees (Phor Ngor Dor 1) and submit annual tax returns to the Revenue Department.

Payroll

Payroll is typically processed monthly. Itemised payslips are required by law and must be issued on each payday. These can be printed or delivered digitally.

Payroll calculations should account for:

• Unpaid leave deductions
• Overtime (typically 1.5–3x base rate)
• Pro-rated salary for partial months
• Statutory and voluntary deductions (e.g., SSF, provident fund)

Reports

Payroll records must be kept for at least 7 years in case of audit or review.

Payslip Example

New Starts

New employees must be registered with the Social Security Office and Revenue Department within 30 days of hire. Employers must file Form Sor Por Sor 1-03 for new hires.

Leavers

Employers must notify the Social Security Office of employee terminations within 15 days using Form Sor Por Sor 6-09.

Final salary should include:

• Accrued unused leave
• Pro-rated salary
• Severance if applicable (based on length of service)

Statutory severance applies as follows:

• 120 days to <1 year: 30 days’ wages
• 1–3 years: 90 days
• 3–6 years: 180 days
• 6–10 years: 240 days
• 10–20 years: 300 days
• 20+ years: 400 days

Employee Benefits

Common benefits include:

• Medical insurance
• Transport allowance
• Meal vouchers
• Attendance bonuses
• Long-service awards

Expenses

Work-related expenses reimbursed by employers must be documented with receipts. Undocumented reimbursements may be treated as taxable income.

Foreign nationals must secure a Non-Immigrant B visa and a work permit prior to employment.

Application Requirements

• Passport copy
• Visa application form
• Letter of employment
• Company registration and tax documents
• Educational/professional qualifications
• Medical certificate

Employers must also meet expat hiring conditions:

• Maintain a 4:1 ratio of Thai-to-foreign employees
• Have minimum registered capital of THB 2 million per foreign employee

Processing is typically completed within 7–10 working days. Employers must maintain compliance with Thai Immigration rules.

• Treaty of Amity: U.S. companies may qualify for majority ownership privileges.
• Conscription Policy: Male Thai citizens may be called for national service.
• Personal Business Leave: Specific to Thai labour law, minimum 3 days annually.
• Multiple Office Types: Investors may choose between limited companies, branches, or rep offices depending on needs.
• Form Sor Por Sor 1-03 & 6-09: Specific to employee registration and termination.

Further Information

For more information, or assistance with Thailand Tax enquiries please contact: gi@activpayroll.com

About This Payroll and Tax Overview

Please note that this document gives general guidance only and should not be regarded as an authoritative or complete statement of the law, regulations or tax position in any country. You should always seek specific advice for each specific situation. This document should not be relied upon as professional advice and activpayroll accepts no liability for reliance on its contents.