Hire employees in Thailand

With a highly skilled workforce combining both local and immigrant talent, Thailand offers international employers an important talent pool. The Digital Skills Index by Salesforce further found Thai workers to be well-prepared for the future and confident in their own skills. 

But before hiring talent in Thailand, global organizations have to be thoroughly acquainted with local laws surrounding labor and employment. While regulations on some aspects of employment are quite loose—for instance with regard to the admissive length of the probation period—others are highly regulated. Here is an overview of the most important employment regulations in Thailand.

Employment agreements in Thailand can be concluded either for a definite or an indefinite period. Although there is no legal requirement for employment contracts to be in writing, it is strongly recommended to put a written agreement in place when hiring employees in Thailand. 

An exception applies to fixed-term contracts which must always be concluded in writing. It is not mandatory to draft up an employment agreement in Thai language, but a bilingual contract should be issued for employees with a low English-proficiency level. Where concluded in writing, the contract should include the following details: 

• Identification of both parties 

• Date of commencement (and employment duration for fixed-term contracts) 

• Job description, duties and responsibilities

• Place of work

• Basic salary as well as other compensation or benefits

• Annual leave

• Termination terms

The contract must be signed by both parties. 

Probation Period

There are no legal regulations with regard to the length of the probation period. But since the law requires employers to provide severance pay to employees who are dismissed after more than 120 days of service, most employers choose a probation period shorter than 4 months.

Working Hours and Breaks

Employees in Thailand should not work more than 8 hours per day and 48 hours per week. After 5 hours of consecutive work, employees are entitled to a 1-hour break, which can also be split into several shorter intervals to be taken throughout the working day. Every employee is further entitled to at least one rest day per week. Two consecutive rest days should not be more than 6 days apart. 

Overtime

If an employee works more than 48 hours per week (or more hours than agreed in his or her employment contract), the additional hours are considered as overtime and must be compensated accordingly. Overtime on a normal workday must be paid at a rate of 150%. On public holidays, vacation days and days off, overtime is to be paid at double rates—triple rates if the work is carried out outside normal working hours. The legal limit for overtime is 36 hours per week, i.e. 6 hours per day. 

The law mandates that employees must be paid at least once a month, which is also the most commonly chosen pay frequency. Wages and salaries are usually paid on the last business day of the month.

Minimum Wage 

Minimum wage rates vary from province to province. Following a raise in October 2022, the current minimum wage rates range from THB 328 per day (provinces of Yala, Pattani, Narathiwat, Nan, and Udon Thani) to THB 354 per day (provinces of Phuket, Chonburi, and Rayong). 

In some cases, minimum pay rates are higher based on the employee’s profession. The authority responsible for setting and adjusting minimum wage rates is the National Wage Committee. Special compensation rules apply to foreign nationals working in Thailand. For these employees, minimum pay is defined according to their nationality. 

Sick Pay

Under Thai labor law, employees are entitled to up to 30 paid sick days per year. During this time, the employee continues to receive his or her normal pay from the employer. In case the employee’s incapacity to work continues for longer than 30 days, he or she can either use any outstanding paid vacation days or take unpaid leave. If the employee’s sickness-related absence from work exceeds a period of 3 days, the employer can ask the employee to provide a medical certificate.

In certain cases, it is also possible to apply for sickness benefits from the state; however, statutory sickness benefits are only paid at a rate of 50% of the employee’s usual salary (capped at THB 15,000 per month) and the payment of such benefits is limited to 90 days each time and a total of 180 days per year. 

Bonuses

There are no legal provisions regarding the payment of an annual bonus or 13th salary, but bonuses can be offered at the discretion of the employer.

Employees and employers in Thailand are subject to the following tax and social security contribution rates (last review February 2023):

Taxes

Employers

20%

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• 20% corporate tax rate

• 7% VAT (reduced from 10% until September 2023)

Employees

up to 35% *

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Income from employment is taxed at progressive rates ranging from 0% to 35%.

Social security

Employers

at least 5%

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• 5% contribution to the national social security fund which covers employees in case of illness, injury, maternity, invalidity, old age and unemployment (capped at THB 750 per month)

• In addition, the employer may be required to contribute to the employee compensation fund for work-related illnesses and injuries. Contribution rates vary depending on the employee’s work risks and can go up to 1% of the employee’s monthly income

• Voluntary contribution to a private pension fund on behalf of the employee 

Employees

5%

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• 5% contribution to the national social security fund which covers employees in case of illness, injury, maternity, invalidity, old age and unemployment (capped at THB 750 per month)

• Voluntary contribution to a private pension fund

Please note that the social security contributions indicated above do not necessarily reflect the actual employment costs. These may differ depending on the employment contract and due to other factors (e.g. 13th and 14th salary, health insurance allowances, accrual for severance pay, etc.).

Annual Leave

After having completed one year of service with their employer, employees are entitled to paid annual leave of no less than 6 days per year. During the first year, the employer can decide to grant paid vacation days on a prorated basis. 

Thailand observes various public holidays which are determined and published by the responsible local authority on an annual basis. Employers are required to choose 13 public holidays from the list of available public holidays for that respective year. The chosen festivities will then be paid days off for the business’s employees. 

Maternity Leave and Paternity Leave

Female employees are entitled to 98 days of maternity leave, of which 45 days are paid by the employer. The following 45 days are paid by the Social Security Office. Under the current legislation, the remaining 8 days are unpaid. 

There is no statutory entitlement to paternity leave for employees in the private sector. Public sector employees, on the other hand, get 15 days of paid paternity leave.

Parental Leave

There are no legal provisions for additional parental leave.

Additional Leave and Benefits

Other types of leave to which employees are entitled include business leave, military service leave, and training and development leave, among others.

Both employee and employer can terminate the employment relationship by giving the other party a written notice. The statutory notice period is generally one month (or one full payroll cycle); however, payment in lieu of notice is possible. Employers are not required to provide a reason for dismissing an employee. 

No notice must be given in case of serious misconduct of the employee. Examples for employee misconduct include criminal offense, serious negligence resulting in damage to the employer, severe violation of the work rules and regulations in place, and unexcused absence from work for more than 3 days in a row. 

Terminated employees whose length of service exceeds 120 days are entitled to severance pay—unless they are dismissed for serious misconduct. The amount of severance pay which must be paid increases with the employee’s length of service.