Labor Laws and Regulations
Contract
There are two main types of employment contracts
Fixed-Term Employment Contracts (Definite Term)
Permanent Employment Contracts (Indefinite Term)
Common to both Fixed-Term Employment Contracts (Definite Term) and Permanent Employment Contracts (Indefinite Term)
Language
No explicit legal requirement in the Labour Protection Act that mandates employment contracts to be in Thai language. Best practices and legal considerations strongly suggest that employment contracts should ideally be in Thai, or at least include a Thai version, especially if the employee is Thai. It is common and considered best practice for companies in Thailand, especially those employing both Thai and foreign nationals, to use bilingual employment contracts.
If a bilingual contract is used and there are discrepancies between the Thai and foreign language versions, the Thai language version is likely to prevail in legal interpretations within Thailand.
Employment contracts in Thailand can be written or verbal. However, written contracts are strongly recommended to clearly outline the terms and conditions of employment and prevent disputes.
Mandatory terms
Thai labor law, primarily the Labour Protection Act, B.E. 2541 (1998), requires certain terms or information to be provided to employees, and while not all are explicitly mandated as “contract terms,” they are essential elements of the employment relationship and often included in contracts for clarity and compliance.
Key elements include:
- Parties to the Contract: Identification of employer and employee.
- Job Title and Nature of Work: Description of the position and duties.
- Wage Rate and Payment: Specify the wage or salary, payment frequency, method, and deductions (if any).
- Working Hours: Define normal working hours, rest periods, and overtime conditions, in line with legal limits.
- Holidays and Leave: Mention annual leave, sick leave, and public holidays, as per legal entitlements.
- Probation Period (if applicable): Duration of the probation period, if any.
- Termination of Employment: Notice periods for termination by either party, severance pay conditions as per law.
- Place of Work: Location of employment.
- Date of Employment Commencement: Start date of employment.
- Welfare and Benefits: Outline any additional benefits beyond statutory requirements (e.g., health insurance, bonuses).
- Work Rules and Regulations: While workplace rules are separate, contracts may reference the employee’s obligation to adhere to them. (Work rules themselves have mandatory content requirements and must be in Thai).
Specific for Fixed-Term Employment Contracts (Definite Term)
Mandatory terms
Cannot include a probation period.
Minimum contract duration
Not specified.
Maximum contract duration
Total duration of a fixed-term contract, including any extensions or renewals, cannot exceed two years. Thai law restricts the use of successive fixed-term contracts for the same employee.
Probation
Not allowed.
Type of work
These contracts are typically intended for specific types of work that are:
- Seasonal: Jobs that are dependent on seasons.
- Temporary tasks: Work for a specific project or task with a defined duration.
- Project-based: Work related to special projects outside the regular business of the employer.
- Work with a predetermined schedule: Jobs that have a set start and end date.
Specific for Permanent Employment Contracts (Indefinite Term)
Probation
The maximum probation period allowed for new employees in Thailand is 119 days.
While there’s no minimum duration mandated, many employers utilize the full 119-day period to assess new hires. After 120 days of employment, employees become eligible for severance pay, which is why the probation period is often capped at 119 days. No specific legal requirements or mandatory procedures for formally confirming an employee after a probationary period.
Confirmation After Probation - What Happens Legally?
- Automatic Transition: Thai labor law doesn’t stipulate a formal “confirmation” process. If an employer does not terminate the employee within the 119-day probationary period, the employee automatically becomes a regular employee under Thai Labor Law once this period expires.
- No Legal “Confirmation” Procedure: There’s no legal requirement to issue a confirmation letter or conduct a specific procedure to formally confirm an employee after probation. The expiry of the probationary period itself, without termination, effectively signifies the employee’s transition to regular employment status.
- Severance and Notice Periods: Once the 119 days are over, the employee becomes protected under Thai Labor Law. This means that standard severance pay liabilities and notice periods for termination automatically come into effect.
Written Notification (if terminating): If the decision is to terminate the employee, it’s advisable to notify the employee in writing before the end of the probationary period. This should state the reason for termination, referencing performance or suitability issues.
Confirmation Letter (Optional but Recommended): Although not legally required, some employers choose to issue a confirmation letter to employees who successfully complete their probation. This letter can formally acknowledge their successful completion of probation and their transition to regular employee status. This is a good HR practice to boost employee morale and provide clarity, even if it’s not a legal necessity.
Minimum wage
Thailand has a daily minimum wage that varies by province. These rates are reviewed and adjusted periodically by the government. It’s crucial to check the current minimum wage for the specific province where the employee is working.
Thailand’s minimum wage law, effective since January 1, 2025, has established new daily wage rates across all provinces. The minimum wage now ranges from 337 baht to 400 baht per day, depending on the location.
See full list: https://www.pkfthailand.asia/wp-content/uploads/2025/01/Minimum-Wage-for-2025.pdf
E.g. Bangkok Metropolis: 372 THB per day, increased to 400 THB per day effective 1 July 2025.
Working hours
Normal working hours
The standard working week in Thailand is 48 hours, typically 8 hours per day for 6 days a week. For certain types of work deemed hazardous, the standard is 42 hours per week.
Rest Days
Employees are entitled to at least one rest day per week, and daily rest breaks.
Overtime
Work exceeding standard hours is considered overtime and requires payment at premium rates.
| Weekdays Overtime | At least 1.5 times the regular hourly rate |
|---|---|
| Holiday Overtime | At least 3 times the regular hourly rate |
| Rest Day Work | If working on a weekly rest day, employees are entitled to at least double the regular daily wage for work performed during normal working hours, and at least triple for overtime on a rest day |
Overtime Work on Normal Working Days
- Definition of Overtime: Work performed beyond the regular working hours on a normal working day. Normal working hours are typically defined as no more than 8 hours per day, or 48 hours per week for general industries.
- Overtime Rate: For each hour of overtime work on a normal working day, employees are entitled to at least 1.5 times their normal hourly wage rate.
Calculation: Hourly Normal Wage Rate x 1.5 x Number of Overtime Hours Worked
Overtime Work on Holidays
- Work on Weekly Holidays (Rest Days):
- If an employee is required to work on their weekly holiday, they are entitled to double their normal hourly wage rate for each hour worked.
- Calculation: Hourly Normal Wage Rate x 2 x Number of Hours Worked on Weekly Holiday
- If an employee is required to work on their weekly holiday, they are entitled to double their normal hourly wage rate for each hour worked.
- Work on Public Holidays (Traditional Holidays):
- For working during normal working hours on a public holiday, employees should receive an additional day’s wage as holiday pay on top of their regular daily wage, meaning they effectively get paid double their normal daily wage for working on a public holiday during regular hours.
- If the work extends beyond the regular working hours on a public holiday (overtime on a holiday), employees are entitled to 3 times their normal hourly wage rate for each overtime hour. This is in addition to the double pay for working on the holiday during regular hours.
- Calculation for Overtime on Public Holiday (beyond regular hours): Hourly Normal Wage Rate x 3 x Number of Overtime Hours Worked on Public Holiday.
- Total pay for working beyond regular hours on a Public Holiday: (Normal Daily Wage for Holiday Work) + (Hourly Normal Wage Rate x 3 x Number of Overtime Hours Worked).
How to Calculate Hourly Normal Wage Rate
To calculate overtime pay, you first need to determine the employee’s “hourly normal wage rate.” This is generally calculated as follows:
- Monthly Salary Basis: Monthly Salary / Normal Monthly Working Hours
- Normal Monthly Working Hours are usually based on the standard weekly working hours (e.g., 48 hours per week) and the typical number of working days in a month.
Example (Illustrative)
Let’s assume an employee has a monthly normal wage of THB 15,000 and normal working hours are 8 hours per day, 6 days a week.
- Hourly Normal Wage Rate: THB 15,000 / (approximately 208 hours per month, assuming 26 working days) = THB 72.12 per hour (approximately).
- Overtime on Normal Working Day (2 hours): THB 72.12 x 1.5 x 2 = THB 216.36
- Work on Weekly Holiday (8 hours): THB 72.12 x 2 x 8 = THB 1,153.92
- Overtime on Public Holiday (2 hours beyond regular hours): THB 72.12 x 3 x 2 = THB 432.72 (This is in addition to the regular daily wage for holiday work).
Public holidays and annual leaves
Official public holidays
Thailand has gazetted public holidays, and employees are entitled to paid holidays. If an employee is required to work on a public holiday, they are entitled to holiday pay at the rates mentioned above for holiday overtime.
Working on Public Holidays: If an employer requires an employee to work on a public holiday, the employee is entitled to:
- Holiday work pays at a rate of at least double the normal daily wage for each working hour on a public holiday.
- Or, the employer can provide compensatory time off on another working day in addition to paying the normal daily wage for the public holiday.
Substitution of Public Holidays: Employers and employees can agree to substitute a public holiday for another day, other than weekly rest days or annual leave.
Annual paid leave
Employees who have worked continuously for one year are entitled to a minimum of 6 working days of paid annual leave. Employers may offer more generous annual leave policies.
Unused annual leave cannot be forfeited and must be carried forward to the next year. This is explicitly stated as essential for employers to note to avoid compliance mistakes.
Personal Business Leave
Employees are entitled to take leave for necessary business, vocational training, or examinations related to their work. Minimum of 3 days. The law does not specify if this leave is paid or unpaid, often depending on company policy.
Sick leave
Sick leave
The Labour Protection Act does not limit the number of sick leave days an employee can take in a year. Employees are entitled to paid sick leave of up to 30 working days per year. A medical certificate may be required for sick leave of 3 or more consecutive days. For sick leave exceeding 30 working days in a year, employers are not legally obligated to pay wages, unless the employment contract or company policy specifies otherwise.
Maternity / paternity leave
Paid maternity leave
Female employees are entitled to 120 days of maternity leave, including public holidays. This includes 98 days of leave for childbirth and an additional 22 days for prenatal or postnatal medical care.
Employers are required to pay for up to 45 days of maternity leave, while the remaining days may be covered by the Social Security Fund.
As of March 1, 2024, the Labour Protection Act (Amendment) B.E. 2566 (2023) extended maternity leave from 90 to 120 days and mandated full pay for the entire leave period. The current payment structure is as follows:
- Employers are responsible for providing 100% of the employee’s regular salary for the first 45 days of maternity leave.
- The Social Security Office covers the remaining days, paying employees 50% of their regular salary
Protection: Employers cannot terminate a female employee due to pregnancy or within a year after childbirth unless there is a justifiable reason unrelated to the pregnancy.
Paternity leave
Public Sector: Male government employees are entitled to 15 days of paid paternity leave after the birth of a child.
Private Sector: There is no mandatory paternity leave for private-sector employees under Thai labor law. However, some companies may provide paternity leave as part of their internal policies.
Family leave
Sterilization Leave
Paid leave both for male and female*
Training Leave
Unpaid leave for training or skill development**
Military Service Leave
Male employees are entitled to paid leave for military service inspection, readiness testing, or military drilling maximum 60 days per year
*The duration is as prescribed by a qualified medical practitioner. **The employer can deny this leave under certain conditions, such as if it would negatively affect business operations.
Termination
Common to both Fixed-Term Employment Contracts (Definite Term) and Permanent Employment Contracts (Indefinite Term)
Mutual Termination Agreement
Exemptions from Severance Pay: Severance pay is not required in cases of:
- Fixed-term employment contracts ending naturally.
- Termination for “just cause” such as serious misconduct, negligence, or violation of work rules.
- Employee resignation.
Reasons of dismissal related to individual employees
Valid Reasons for Termination of Permanent Contract:
-
Repeated Misconduct or Violation of Company Rules
Persistent behavior contrary to company rules or policies, especially after warnings, can justify termination.
-
Dishonesty
Acts of fraud, theft, or any form of deception are clear grounds for ending employment.
-
Failure to Perform Duties
Consistent underperformance or neglect of duties, particularly after formal warnings, can lead to termination.
-
Negligent Acts Causing Serious Damage
Committing negligent acts that cause significant harm or risk to the employer’s business or property.
-
Intentional Damage to Employer’s Property
Willfully causing damage to the employer or its property.
-
Violation of Lawful and Equitable Orders
Violating lawful and equitable company orders or regulations, especially after a prior written warning.
-
Unjustified Absence
Neglecting duties for three consecutive workdays without a reasonable cause, whether or not a holiday intervenes.
-
Criminal Conviction
Being sentenced to imprisonment by a final court judgment.
-
Other Statutory Causes
Any other reason specifically recognized by law as a valid ground for termination.
Reasons of dismissal related to business
-
Redundancy or Restructuring
Termination is permitted if the employer needs to reduce staff due to business restructuring, changes in technology, production processes, or for economic reasons.
-
Liquidation or Closure of Business
If the employer closes down the business, terminates operations, or goes into liquidation, this is considered a valid business reason for termination.
-
Other Operational Necessities
Other legitimate business needs may also be considered valid, provided the employer can demonstrate that the termination is not discriminatory or arbitrary.
Prohibits employment termination due to the following reasons
Union Membership or Activities
- Under Section 49 of the Labour Relations Act B.E. 2518, employers are prohibited from terminating employees for joining, forming, or participating in labor unions, collective bargaining, or other union-related activities.
- Termination based on union involvement is considered unfair dismissal and is strictly forbidden.
Whistleblowing
- Dismissal as retaliation for reporting illegal activities or wrongdoing by the employer is not permitted and is considered unfair.
Discrimination
- Termination based on race, gender, religion, age, disability, or other discriminatory grounds is prohibited under general principles of Thai labour law and may be considered wrongful or unfair dismissal.
Pregnancy
- Terminating an employee because of pregnancy is not allowed and is considered discriminatory and unfair.
Employee Committee Members
- Members of the Employee Committee have special protections; their dismissal requires a court order and cannot be made at the employer’s discretion.
Termination benefits for employee resignation
Accrued Wages and Overtime
- Employers must pay all unpaid wages, overtime, and holiday pay up to the last day of work.
- Payment must be made within three days of termination.
Unused Annual Leave
- Employees are entitled to compensation for any unused annual leave.
- This is calculated based on the employee’s daily wage and the number of unused leave days.
Social Security and Other Contributions
- Employers must notify the Social Security Office of the termination and ensure all social security contributions are up to date.
- Starting October 2025: For companies with at least 10 employees, additional Employee Welfare Fund contributions may apply unless the employer already provides a provident fund or similar assistance.
Unemployment Insurance
- If the employee is eligible (at least 6 months of contributions within the last 15 months), they may claim unemployment benefits from the government after resignation.
- Employees who voluntarily resign may receive 30% of their wages for up to 90 days, with a maximum of 180 days per calendar year.
- Eligibility requires at least 6 months of social security contributions within the last 15 months and monthly registration with the government employment office.
Termination of employment notification
For termination, employers are generally required to provide advance written notice to employees, with the notice period depending on the wage payment period (e.g., if wages are paid monthly, one payment period’s notice is required).
Wages in Lieu of Notice: If an employer terminates employment immediately without providing the required notice period, they must pay wages in lieu of notice.
Unpaid Leave and Wages: Employers are generally not obligated to pay wages during unpaid leave, except for legally mandated paid leave like annual leave, sick leave, and maternity leave.
Right to object to the termination
Right to Challenge Unfair or Wrongful Termination
- Employees who believe they have been terminated without a valid statutory cause or for prohibited reasons (such as union activity, pregnancy, or discrimination) can file a claim with the Labour Court for unfair or wrongful dismissal.
- Thai law does not precisely define “unfair/wrongful dismissal,” so the court evaluates each case individually, considering the circumstances and the employer’s justification.
Right to Statutory Payments
- If termination is without statutory cause, employees are entitled to severance pay, payment in lieu of notice, and other statutory benefits.
- Employees can file a claim if these payments are not provided.
Right to Reinstatement or Compensation
- If the Labour Court finds the termination wrongful or unfair, it may order:
- Reinstatement of the employee under the same conditions as before the dismissal; or
- Compensation for unfair/wrongful dismissal, the amount of which is determined by the court based on the circumstances.
Right to Due Process
- Employers must provide clear reasons for termination and, in most cases, must issue a written termination notice.
- If the termination is for cause (e.g., misconduct), the employer must specify the reason in the termination letter or at the time of termination; otherwise, they cannot later claim statutory cause against the employee.
No Requirement to File with Labour Inspector First
- Employees can file a claim directly with the Labour Court without first lodging a complaint with the Labour Inspector.
Specific for Fixed-Term Employment Contracts (Definite Term)
Natural Termination
Fixed term employment typically ends when:
- The contract period expires
- The specified work is completed
- A certain event or situation stated in the agreement occurs
Unilateral Termination
Early termination
The contract generally cannot be terminated before the end date unless there is a serious breach by either party. If the employer terminates early without cause, it may be considered a breach of contract, and the employee may be entitled to damages or compensation.
No Automatic Right to Resign Early
- Unless the contract specifically includes a clause permitting the employee to resign before the end of the agreed term, the employee is generally not entitled to terminate the contract early simply by resigning.
- If the employee unilaterally terminates the contract without contractual right or cause, this may be considered a breach of contract, and the employer could potentially claim damages or refuse to pay wages for the remainder of the contract period, depending on the circumstances and court interpretation.
Termination benefits for termination by employer
Severance pay
If the contract ends at the agreed date, severance pay is not required. However, if the employer terminates the contract early without just cause, severance pay may be owed based on the employee’s length of service.
Specific for Permanent Employment Contracts (Indefinite Term)
Unilateral Termination
Termination by employer
-
The employer may terminate for cause (misconduct, poor performance, etc.) or without cause (business reasons, redundancy, etc.)
-
If the employee is terminated for serious misconduct (e.g., dishonesty, gross negligence, criminal acts), no severance pay is required. The employer must provide evidence of the misconduct and follow due process.
Written notice: All terminations must be in writing, and the reason for termination should be clearly stated.
Due process: For termination with cause, employers must follow a fair process, including investigation and documentation.
Redundancy or Restructuring
If the termination is due to redundancy, restructuring, or changes in technology or production processes, the employer must notify the labour inspector at least 60 days prior to the termination date.
The notification must include:
- The date of termination
- The reason for termination
- The names of all affected employees
Failure to notify within the required timeframe may result in a fine of up to THB 20,000, which may also apply to directors or authorized personnel involved in the termination.
Ordinary unilateral termination (not due to redundancy/restructuring): Only notification to the Social Security Office is required for Thai employees.
Termination by employee: The employee may resign with proper notice.
Termination benefits for termination by employer
Employees who are terminated without “just cause” (as defined by law) are entitled to severance pay based on their length of service. The severance pay rates are defined in the Labour Protection Act and increase with years of service.
Severance pay: Employees who have worked for 120 days or more are entitled to severance pay if terminated without cause. Severance pay is calculated based on the employee’s length of service:
| Length of Service | Severance Pay |
|---|---|
| 120 days – <1 year | 30 days’ wages |
| 1 year – <3 years | 90 days’ wages |
| 3 years – <6 years | 180 days’ wages |
| 6 years – <10 years | 240 days’ wages |
| 10 years – <20 years | 300 days’ wages |
| 20 years or more | 400 days’ wages |
Payroll and Statutory Contributions
Payroll
Payment
Wages must be paid at least monthly, unless otherwise agreed upon and not less frequent than once a month. Payment should be made in Thai Baht.
Wages typically consist of a basic salary, overtime pay, holiday pay, and other taxable allowances and benefits. The basic salary must meet or exceed the applicable minimum wage.
Wages are typically paid in cash, cheque, or bank transfer. Bank transfer is increasingly common and recommended for record-keeping.
Payslip
Employers are legally obligated to provide employees with pay slips each pay period, detailing gross salary, deductions (taxes, social security, provident fund), and net salary.
Record Keeping
Employers are required to maintain accurate payroll records for compliance and audit purposes, typically for at least 3 years.
Wage deduction
Permissible deductions are limited and regulated by the Labour Protection Act. Common deductions include:
Social Security Fund (employee contribution)
Provident Fund (employee contribution, if applicable)
Income Tax (Withholding Tax) - calculated based on progressive tax rates
Court-ordered deductions (e.g., debt repayment)
Union dues (with employee consent)
Late payment
Thai labor law mandates that employers pay their employees on time as per the agreed-upon payroll schedule. Delays in salary payments can result in fines ranging from 5,000 to 50,000 baht, depending on the number of affected employees.
13th month bonus
The 13th month pay is not mandatory in Thailand. Employee benefits are based on what employers indicate in employment contracts.
Income tax obligations from employers
Personal Income Tax (Withholding Tax)
Taxable Income: Income tax is calculated on an employee’s taxable income, which includes salary, wages, allowances, bonuses, and other taxable benefits.
Allowances and Deductions: Taxable income is reduced by certain allowances and deductions, including:
- Personal Allowance: A standard deduction for each taxpayer (e.g., THB 60,000 per year).
- Spouse Allowance: Allowance for a legally married spouse (if applicable).
- Child Allowance: Allowance per child (up to three children).
- Social Security Contributions: Employee’s contributions to the Social Security Fund are tax-deductible.
- Provident Fund Contributions: Employee’s contributions to a registered provident fund are tax-deductible (within limits).
- Insurance Premiums: Health and life insurance premiums (within limits).
- Retirement Savings Funds (RMF, SSF): Contributions to approved retirement and savings funds (within limits).
- Donations: Donations to approved charities (within limits).
Progressive Tax Rates: Thailand uses a progressive income tax rate system based on annual taxable income brackets.
Monthly Withholding: Employers are required to calculate and withhold income tax monthly from employee salaries based on their estimated annual income and applicable deductions and allowances. The Revenue Department provides guidelines and tax tables to assist with this calculation.
Payment date
Withholding Tax (PND.1 Form): File Form PND.1 (Pajak Ngod. 1) monthly to report and remit withheld income tax to the Revenue Department. The deadline is generally the 7th or 15th of the following month depending on the filing method (paper or e-filing). Payment is made along with filing, often electronically.
Annual Tax Reconciliation (PND.1 Kor Form): File Form PND.1 Kor (Pajak Ngod. 1 Kor) annually with the Revenue Department to reconcile the total income tax withheld for each employee throughout the year. Also, provide Form 50 Bis to each employee as a withholding tax certificate by the end of February each year.
Recommended Record Retention Period
Generally, it is recommended to retain payroll and tax records for at least 5 years in Thailand, although specific regulations might advise longer retention periods for certain documents.
Mandatory benefits and social security
Social Security Fund (SSF)
Employers and employees are required to contribute to the Social Security Fund. The SSF provides benefits for:
- Sickness and maternity
- Disability
- Death
- Child allowance
- Old-age pension
- Unemployment (voluntary contribution for employees who resigned or contract ended)
Thailand’s Social Security Fund (SSF) operates under a tripartite contribution model involving the government, employers, and employees.
Contribution Rates and Allocation
The SSF categorizes contributions into three benefit types, each with distinct rates for stakeholders:
Injury, Sickness, Disability, Death, and Child Delivery Benefits
| Government contribution | 1.5% of wages |
| Employer contribution | 1.5% of wages |
| Employee contribution | 1.5% of wages |
Child Welfare and Old-Age Benefits
| Government contribution | 1% of wages |
| Employer contribution | 3% of wages |
| Employee contribution | 3% of wages |
Unemployment Benefits
| Government contribution | 0.25% of wages |
| Employer contribution | 0.5% of wages |
| Employee contribution | 0.5% of wages |
Total Contributions
| Government | 2.75% |
| Employer | 5% |
| Employee | 5% |
These rates apply to wages up to a statutory ceiling, which has remained unchanged at 15,000 baht per month since 1991. For employees earning above this threshold, contributions are capped at 750 baht/month for employers and employees, and 412.50 baht/month for the government.
Wage Ceiling Reforms (2026–2032)
To address inflation and align benefits with economic realities, Thailand will implement a three-phase increase to the SSF wage ceiling:
Phase 1: January 2026–December 2028
- New ceiling: 17,500 baht/month
- Maximum contribution: 875 baht/month (employer/employee)
Phase 2: January 2029–December 2031
- New ceiling: 20,000 baht/month
- Maximum contribution: 1,000 baht/month (employer/employee)
Phase 3: January 2032 Onward
- New ceiling: 23,000 baht/month
- Maximum contribution: 1,150 baht/month (employer/employee)
Payment Deadlines and Penalties
Employers must remit SSF contributions by the 15th day of the following month. For example, contributions for January 2025 are due by February 15, 2025. Failure to meet this deadline incurs a 2% monthly surcharge on unpaid amounts, compounded until settled.
Workmen’s Compensation Fund (WCF)
Thailand’s Workmen’s Compensation Fund (WCF) is a mandatory program for most employers, designed to provide compensation, medical care, and support to employees who suffer work-related injuries, illnesses, disabilities, or death. Here are the key details about the WCF, including contribution rates, salary cap, deadlines, and related information:
Contribution Rates
- Rate Range: Employers are required to contribute annually at rates ranging from 0.2% to 1% of their employees’ wages.
- Determining Factors: The exact rate within this range depends on the risk classification of the employer’s business sector. Higher-risk industries pay higher rates. For the fifth year and beyond, the rate may also be adjusted based on the employer’s claims experience and loss history.
- Who Pays: Only employers contribute to the WCF; employees and the government do not make payments to this fund
Salary Cap
- Maximum Insurable Wage: The annual wage per employee used to calculate the WCF contribution is capped at THB 240,000.
- Scope: This cap includes all forms of payment to the employee, such as base salary, overtime, holiday pay, and bonuses
Payment Deadline
- Annual Payment: Employers must pay the WCF contribution annually.
- Specific Deadline: The law does not specify a single strict deadline for all employers, but generally, the Social Security Office expects payment within a reasonable period after the start of the fiscal or calendar year. Employers should check with the Social Security Office for the exact due date each year, as it may be subject to regulatory adjustment or notification.
- Late Payment: Late payments may result in penalties or surcharges, but specific penalty rates for the WCF are not widely detailed in public sources. However, for social security contributions, late payments are typically subject to a 2% monthly surcharge; similar principles may apply to WCF, but confirmation from the Social Security Office is recommended
Provident Fund (Optional but Common)
While not legally mandatory for all employers, establishing a Provident Fund is common practice, especially in larger companies. This is a voluntary savings scheme where both employees and employers contribute, providing retirement savings and other benefits.
Contribution Rates
- Employee Contribution: Between 2% and 15% of monthly salary, as agreed in the fund’s regulations.
- Employer Contribution: Typically at least equal to the employee’s contribution, but the exact rate is set by the fund’s articles and can be higher if agreed upon. The employer’s contribution is often matched to the employee’s rate, but both are subject to a maximum of 15% of salary for each party.
- Flexibility: Employers and employees may negotiate higher rates (above 15%) with approval from the Minister.
- Tax Deductibility: Employee contributions are tax-deductible up to a combined limit of 500,000 baht per year when aggregated with other retirement and savings funds (e.g., SSF, RMF). Employer contributions are deductible as an expense up to 15% of each employee’s salary.
Salary Cap
- No Statutory Salary Cap: There is no official salary cap for contributions under the Provident Fund Act. Contributions are calculated as a percentage of the employee’s actual salary, up to the agreed percentage limit (2%–15%).
- Tax Cap: The annual tax deduction for employee contributions (when combined with other funds) is capped at 500,000 baht.
- Employer Deduction Cap: Employer contributions are deductible as a business expense up to 15% of each employee’s salary.
Payment Deadline
- Remittance Deadline: Employers must remit both employee and employer contributions to the fund within three business days after paying wages.
- Penalty for Late Payment: If remittance is delayed, the employer must pay a surcharge of 5% per month on the delayed amount
Recommended Record Retention Period
Generally, it is recommended to retain payroll and tax records for at least 5 years in Thailand, although specific regulations might advise longer retention periods for certain documents.
