Thailand is a country in southeast Asia, bordered by Myanmar, Laos, Cambodia, and the Gulf of Thailand. Thailand has periodically alternated between democracy and military rule, and has a newly industrialized economy.

The country also functions as an anchor economy for the neighboring developing economies of Laos, Myanmar, and Cambodia. Known for its temples, floating markets, biodiversity, and incredible street food, Thailand is a great place for remote workers.

Types of Contracts

Common types of employment contracts in Thailand are Permanent Employment and Fixed-Term contracts.

Permanent contract: The contract is open-ended.

• The contract can be terminated during the probation period without needing severance pay.

Fixed term contract

• It has a duration of 2 years;
• Has no probation period;
• Terminates at its specified time without the need for serving notice;
• The contract cannot be extended.

Job Title Restrictions

There are job title restrictions when hiring in Thailand under employer of record services.

Working Hours

Working hours are set at 8 hours per day or a maximum of 48 hours per week.

The maximum amount of overtime permitted is capped at 36 hours per week. Overtime pay for work performed from Monday to Saturday is at least 150% of the regular rate.

Overtime performed on a Sunday or public holiday is paid at 200% of the regular rate (Sunday or  public holiday work is paid at a minimum of 2 times the normal hourly rate.)

Minimum Wage

The minimum wage in Thailand is varies by province. In 2024 it ranges between 330 and 370 Thai Baht per day.

Probation Period

Probation periods are not mandatory, common practice is between 90 and 119 days.

• An employee whose contract is terminated during the probation for no just cause is entitled to severance pay.
• The amount of severance pay is calculated based on the length of service and the employee's salary.

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Taxes & Local Employment Costs

Employee Taxes

Employees pay Income Tax and contribute towards Social Security.

Income Tax: Employees pay income tax only on income derived from Thailand. The income tax ranges between 0% for salaries less than 150 000 THB to 35% for salaries above 5 million THB per annum.

Social Security: Employees contribute to the Social Security system 5% of their monthly wages, with a maximum contribution of 750 Thai Baht per month.

Employer Taxes & Contributions

Taxes: Employers may be subject to taxes, levies, or contributions that are location or industry specific.

Social Security Contributions: Employers contribute to the social security system to provide coverage for benefits such as medical benefits, disability benefits, maternity benefits, and survivor benefits.

The contribution rate is 5% of the employee's monthly wages, up to a maximum of 750 Thai Baht per month.

Annual Leave

Employees in Thailand are entitled to at least 6 days' annual leave.

An employee is entitled to compensation for unused leave at the termination of a contract.

There are no laws regulating the accrual or pro-ration of leave entitlements and paying cash in lieu of leave. Practices are based on the employer’s company policy.

• If the annual leave is not taken in the calendar year, it can be rolled over to the next year.
• Unused leave can be cashed out.
• Unpaid leave (leave without pay) can be taken if the employee goes into a negative balance.

Sick Leave

Employees are entitled to up to 30 days of annual sick leave paid by the employer. If an employee takes 3 days or more of sick leave, an employer can request a medical certificate.

Maternity Leave

Women employees have a right to 90 days of maternity leave. The employer covers expenses for 45 days, while social security covers the remaining 45 days.

Paternity Leave

There is no mandatory Paternity Leave in Thailand.

Other Leave

Additional leave categories are offered at the discretion of the employer.

Public Holidays

There are 13 public holiday days per year, which varies yearly according to government policy.

If a public holiday falls on the weekend, the next working day is a holiday.

Notice Period

The employer must give 1 payroll cycle notice to terminate a contract with or without cause.

Cash in lieu of notice is acceptable.

An employee can be terminated with cause without notice and compensation where the employee has committed serious misconduct or significantly violated the terms of their employment contract.

During probation, the employer can terminate an employee with no notice or compensation.

There is no requirement for an employee to give notice when terminating a contract with or without cause, standard practice is 1 payroll cycle.

Severance Pay

Statutory payments at the end of a contract of employment include:

• Social Security contributions;
• Severance pay if the termination was without cause and an employee has worked for 120 days or more.

The amount of severance pay is based on the duration of service as illustrated:

• 120 days-12 months = 30 days of wages
• 1-3 years = 90 days of wages
• 3-6 years = 180 days of wages
• 6-10 years = 240 days of wages
• 10+ years = 300 days of wages

All unused leave is paid if an employee has been terminated without cause.

If an employee has been terminated with cause, the employer is obliged to pay accumulated unused leave excluding that accumulated in the current year.

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