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Hiring in Thailand
When hiring, negotiating, and doing business in Thailand, it’s helpful to have a good understanding of the country’s business culture, which places a strong emphasis on respect. When negotiating the terms of an employment contract with employees in Thailand, keep the following in mind.
Employment contracts in Thailand
In Thailand, employment contracts can be oral or written, but it’s best practice to put a strong, written contract in place, which clearly states the terms of the employee’s compensation, benefits, and termination requirements. An offer letter and employment contract in Thailand should always state the salary and any compensation amounts in Thailand baht (THB) rather than another currency.
Working hours in Thailand
In Thailand, employees and employers can agree on a working schedule as long as it does not exceed 48 hours a week. Overtime cannot exceed 36 hours a week. On weekdays, the overtime is 1.5 times the worker’s base salary. On weekends, it is 3 times the base salary. In cases where employees, particularly those in leadership and executive positions, are not eligible for standard overtime, they are entitled to double their salary as overtime payment.
Employees have the right to a minimum of 1 rest day per week, and the interval between rest days must not exceed 6 days.
Holidays in Thailand
By law, employers must provide at least 13 paid public holidays per year. The number of holidays can vary each year, so companies usually follow the national holidays announced publicly by the Bank of Thailand, which may include:
- New Year’s Day
- National Labor Day
- Makha Bucha Day
- Chakri Day
- Songkran, which lasts for three days
- Labor Day
- Coronation Day
- Visakha Bucha Day
- Asarnha Bucha Day
- H.M. Queen’s Birthday
- H.M. King’s Birthday
- H.M Queen Mother’s Birthday
- Chulalongkorn Day
- King Bhumibol’s Birthday
- Constitution Day
- New Year’s Eve
If the holiday falls on a rest day, the following workday will be granted as a public holiday.
Vacation days in Thailand
Employees are entitled to a statutory minimum of 6 vacation days per year after the first year of service. However, in practice, many employers provide 10-15 days of paid vacation per year. After completing a year of service, employees’ vacation entitlement is determined by the terms agreed upon with their employer. An employee’s leave entitlement can be carried over.
Thailand sick leave
Under Thailand’s labor law, employees are entitled to annual paid sick leave of up to 30 paid working days per year. If an employee is out for 3 or more consecutive days, the employer has the right to request a medical certificate. If the employee was injured or became ill at work, the days out cannot be deemed sick leave.
Maternity and paternity leave in Thailand
In addition to sick days, pregnant employees are entitled to up to 98 days of maternity leave. Employers pay for 45 days, and the social security fund pays for another 45 days. 8 days are unpaid, although the employer can choose to pay for these days.
There are no statutory requirements for leave for non-birthing parents.
Other leave entitlements in Thailand
Employees in Thailand are entitled to national service leave, training/exam leave, and sterilization leave for family planning. Employees are entitled to national service leave for military practice, to check military status, and to join the military. The wages for military leave are the same as normal work, and the leave cannot exceed 60 days per year. Training/exam leave is for when employees take a training course related to their career or take an examination held by the government. Sterilization leave is available for employees who go through a sterilization procedure. It is a paid leave, and the leave period is stated in the employee’s medical certificate.
Any other form of leave is at the discretion of the employer. Below is a list of additional forms of leave in Thailand:
- Monkhood leave: This leave type is only eligible for Buddhists and should not be over 120 days.
- Hajj leave: This leave type is only eligible for Muslims and should not be over 120 days.
- Compassionate leave: This leave type is based on the company’s policy.
- Marriage leave: This leave type is based on the company’s policy.
- Hospitalization leave: This leave type is based on the company’s policy.
Health insurance in Thailand
Thailand has universal healthcare that is provided through 3 systems:
- The civil welfare system for civil servants
- Social security for private employees, expats, and nationals
- A universal health scheme available to all other nationals
The social security fund assigns each employee a local hospital where they can receive care at no charge. Since the quality of care varies depending on the hospital, some employers may provide supplementary health insurance.
Thailand supplementary benefits
While not mandatory, a provident fund is a common employment benefit to promote retirement savings. If an employer offers a provident fund, their contributions must always be equal to or greater than the employee contribution. Employee contributions are pre-tax. The contribution rate should be no less than 2% but no more than 15% of wages.
The exact rate depends on the agreement between the employer and the trustee. An employer’s contributions subsidize the employee’s. Employers can offer this benefit under several conditions, such as working time, membership, job title, or salary rate. The cumulative balance of the provident fund is paid in a lump sum at the term of membership in the case of retirement or termination.
Bonuses
A 13th-month salary or annual bonus is not required but is the market norm in Thailand.
Termination and severance in Thailand
Employers may include a probation period of no more than 19 days in the employment contract. During the probationary period, an employer may terminate the employment relationship without paying severance.
For termination without cause, employers must give written notice of no less than 1 month and issue a severance payment according to the employee’s length of service:
- If the employee worked more than 19 days but less than 1 year, they are entitled to 30 days of salary and allowances.
- If the employee worked between 1 and 3 years, they are entitled to 90 days of salary and allowances.
- If the employee worked between 3 and 6 years, they are entitled to 180 days of salary and allowances.
- If the employee worked between 6 and 10 years, they are entitled to 240 days of salary and allowances.
- If the employee worked more than 10 years, they are entitled to 300 days of salary and allowances.
- If the employee worked more than 20 years, they are entitled to 400 days of salary and allowances.
In addition, employers may wish to pay out the notice period rather than having the employee work the notice period.
When terminating for economic reasons, employees with at least 6 years of continuous service shall also receive a special compensation equal to 15 days’ wages for every year of employment, with a maximum amount equal to 360 days’ wages. With respect to this additional payment, a span of work of more than 180 days counts as 1 full year of service.
Paying taxes in Thailand
A social security fund is available to all employees and reduces the cost for medical care, child allowance, and loss of wages due to sickness, pregnancy, death, invalidity, old age, and unemployment. Employers are responsible for registering new employees with the social security office. Employers are also responsible for reporting terminations and resignations in a monthly submission. The submission deadline is the 15th of the following month.
Employers and employees both contribute 5% to the social security fund, with a minimum monthly contribution of THB 83 for a wage of THB 1,650, and a maximum monthly contribution of THB 750 for a wage of THB 15,000.
If a worker makes less than THB 15,000 a year, they are exempt from income taxes. After that, income taxes range from 5% to 35% for an annual salary of THB 4,000,000 and above.
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