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There is much more than just salary to factor in when considering employee costs. Companies will need to plan for compliance, legal requirements, social security contributions and more to ensure that they comply with Thailand’s labour law and that employees receive any compensation they are entitled to.
This guide will explain the costs involved in maintaining employees in Thailand.
- Employers must contribute 5% of the employee’s salary to the Social Security Fund each month
- The minimum wage in Thailand is based on the province and ranges from 354 THB to 328 THB
- Employees who work overtime must be paid 1.5 times, two times or three times the base pay depending on whether they work outside of their regular work hours or are required to work on a holiday
- Employees are entitled to paid annual leave, sick leave, maternity leave and military service leave
- Employees who are terminated must be paid severance based on the years they have been working for the company. The rate of severance pay ranges from 30 days to 400 days.
Several factors are considered to determine the minimum wage, including the cost of living, inflation rate, labour productivity growth rate and other macro and microeconomic aspects. The new minimum wage for employees in Thailand ranges from 1 October 2022 are 354 THB to 328 THB, depending on the province.
The daily minimum wage in Thailand is as follows:
|Daily minimum wage (THB)
|Chonburi, Phuket, Rayong
|Bangkok, Nonthaburi, Nakhon Pathom, Pathum Thani, Samut Prakan, Samut Sakhon
|Phra Nakhon Si Ayutthaya
|Chiang Mai, Khon Kaen, Krabi, Lopburi, Saraburi, Nong Khai, Prachin Buri, Phangna, Nakorn Ratchasima, Trat, Suphan Buri, Songkhla, Surat Thani, Ubon Rachathani
|Chanthaburi, Kalasin, Mukdahan, Sakon Nakhon, Samut Songkhram, Nakhon Nayok
|Ang Thong, Kanchanaburi, Bung Kan, Chai Nat, Loei, Buriram, Nakhon Phanom, Phayao, Surin, Roe Et, Phattalung, Nakhon Sawan, Prachuap Kiri Khan, Phitsanulok, Sa Kaeo, Petchburi, Uttaradit, Yasothon
|Amnat Charoen, Chiang Rai, Chumpon, Chaiyaphum, Kampaeng Phet, Mae Hong Son, Sisaket, Nong Bua Lamphu, Lampang, Lamphun, Mahasarakham, Sing Buri, Satun, Phrae, Sukothai, Ratchaburi, Tak, Nakhon Si Thammarat, Sisaket, Ranong, Phichit, Uthai Thani
|Narathiwat, Nan, Pattani, Yala and Udon Thani
Minimum wage for foreign employees
The prescribed minimum income for foreign employees varies based on the employee’s nationality.
|Minimum wage/month (THB)
|Europe (including the United Kingdom), Australia, Canada, Japan and the United States of America
|Hong Kong, Malaysia, South Korea, Singapore and Taiwan
|China, India, Indonesia, the Middle East and the Philippines
|Africa, Cambodia, Laos, Myanmar and Vietnam
Employees who work more than their regular work hours must be paid 150% of the employee’s hourly compensation. Up to eight hours of work during a holiday or day off are paid at a base rate of 200%, and any additional hours worked during a holiday or day off are paid at a rate of 300% of the base hourly rate.
Paid leave entitlement
Employees in Thailand are entitled to paid leaves after completing one year of service. The following are examples of leaves that are provided to employees:
An employee who has worked continuously for one full year shall be entitled to an annual vacation of not less than six working days and get his basic pay at a rate equal to normal working days. For those who have worked for less than one year, the employer may grant the employee an annual vacation on a pro-rata basis.
Employees in Thailand are entitled to 30 days of paid sick leave each year. When an employee uses three or more days of sick leave, the employer can ask for a medical certificate.
In 2019, the length of maternity leave was expanded to 98 paid days instead of 90 days. The 98 days include day-offs for prenatal doctor visits. The days of maternity leave shall include holidays that occur during the leave.
The employer pays the employee the full amount of her salary during the first 45 days of leave. The second half of the leave is paid 50% by social security.
Military service leave
Male employees are entitled to leave for military service for inspection, military drilling or for readiness testing and get their basic pay at a rate equal to normal working days during the leave but not exceeding 60 days.
Social security contributions
Both the employer and employee are required to contribute to the Social Security Fund (SSF), and the current contribution rate is 5% of the employee’s salary. The minimum salary to be calculated is 1,650 THB, and the maximum is 15,000 THB; therefore, the minimum contribution is 83 THB, and the maximum is 750 THB. Even though an employee’s salary exceeds 15,000 THB, the maximum contribution will be 750 THB.
A total of 10% of the salary is paid to the SSF by the employer. Each new employee must be registered into the social fund within 30 days after they start working for the company. If an employee leaves the company, he/she should be deregistered from the social fund within 15 days of the employment termination.
Social security in Thailand covers the following benefits:
- Child benefits
- Death benefits
- Disability benefits
- Injury or sickness benefits
- Maternity benefits
- Old-age benefits
- Unemployment benefits
The new Labour Protection Act (No.7) B.E. 2562 (2019) became effective on 5 May 2019. The Labour Protection Act increased the number of days of the wage for terminating an employee with an employment period of 20 years or more.
The rates of severance pay are as follows:
|Rate of severance pay
|120 days but less than one year
|One year but less than three years
|Three years but less than six years
|Six years but less than 10 years
|10 years but less than 20 years
|20 years or more
How Acclime can help with your HR needs
Understanding the exact employee costs is crucial for business owners in order to accurately estimate and allocate budgets for their operations. It’s important to keep in mind that employee costs go beyond just salary and include additional expenses such as healthcare contributions, social security contributions, paid leave entitlement, and severance pay. By taking all of these factors into account, business owners can make informed decisions and effectively manage their finances.
Acclime provides professional HR services, including PEO, payroll & HR administration. Work with an in-country expert to seamlessly pay and maintain your staff without having to handle any time-consuming administration tasks. Contact us if you need any assistance with employment and HR needs. We are ready to help.
Acclime is Asia’s premier tech-enabled professional services firm. We provide formation, accounting, tax, HR and advisory services, focusing on delivering high-quality outsourcing and consulting services to our local and international clients in Thailand and beyond.