1. Employment Law Foundations

Payroll in Thailand operates within the framework established by the Labour Protection Act B.E. 2541 (1998) and its subsequent amendments. This legislation governs working hours, wages, leave entitlements, severance, and termination rights for both Thai and foreign employees.

Employment Contracts

Employment contracts in Thailand may be fixed-term or indefinite. For most employees in standard roles, indefinite contracts are the norm. Contracts must clearly define salary, working hours, role, and applicable benefits. While contracts are not legally required to be in Thai, Thai-language contracts or bilingual contracts are strongly advisable for local hires — particularly where the employee may need to reference the document for labour dispute purposes.

Working Hours

The statutory maximum working week is generally 48 hours (eight hours per day, six days). In practice, most office-based employers operate a five-day, 40-hour week. Overtime beyond regular hours is compensated at a premium: 1.5 times the hourly rate for overtime on working days, 2 times on rest days, and 3 times on public holidays for hourly-rated employees.

Probation

Thai law does not specify a maximum probationary period, but 119 days is commonly used in practice — because statutory severance rights begin at 120 days of continuous service. Employers should be aware that this practice is well-known and that employment relationships structured to avoid severance obligations through repeated short-term contracts carry legal risk.

Minimum Wage

Thailand operates a province-based daily minimum wage system. In Bangkok and several other provinces, the minimum daily wage in 2026 is approximately THB 400. Rates vary by province depending on cost of living and economic activity. Minimum wage applies equally to Thai and foreign employees — there is no separate floor for expatriates.

2. Personal Income Tax (PIT)

Thailand applies a progressive personal income tax system to employment income. As an employer, your primary obligation is to calculate, withhold, and remit the correct amount of PIT on behalf of each employee every month — and to reconcile and report this annually.

Tax Rates

The 2026 progressive PIT brackets for employment income are:

PND 1 — Monthly Withholding Tax Filing

Employers must file PND 1 — the monthly personal income tax withholding return — with Thailand's Revenue Department by the 7th of the following month for paper submissions, or the 15th for online submissions. Since October 2023, online (e-filing) submission is the required standard for all companies subject to PND 1. Payment of tax withheld accompanies the filing.

PND 1 Kor — Annual Reconciliation

By January 31 each year, employers submit PND 1 Kor — the annual summary of all monthly PND 1 filings. Discrepancies between the sum of monthly filings and the annual total are a frequent trigger for Revenue Department scrutiny. Year-end reconciliation must be built into the payroll process, not treated as a one-off exercise in January.

Section 50 Bis — Form 50 Tawi (Withholding Tax Certificate)

By February 15 each year, every employee must receive their Section 50 Bis withholding tax certificate — known as Form 50 Tawi. This document confirms total income earned and total tax withheld during the prior calendar year. Employees use it to file their personal income tax returns:

• PND 91 — for employees with employment income only
• PND 90 — for employees with income from additional sources

Form 50 Tawi must be accurate and issued on time. It should be in Thai or bilingual format for Thai employees. Late or incorrect issuance is one of the most consistent sources of employee disputes and payroll queries in foreign-operated Thailand payroll — and one of the most avoidable.

3. Social Security Fund (SSF)

Thailand's Social Security Fund (SSF), administered by the Social Security Office (SSO) under the Social Security Act, provides insured employees with coverage across seven benefit areas: sickness, maternity, invalidity, death, child allowance, old age pension, and unemployment.

Who Must Be Registered

Employers must register any employee aged 15 to 60 as an insured person within 30 days of their start date. The obligation applies to all private sector employers with one or more employees. Registration is done through the Social Security Office, and each employee is issued a Social Security number.

Contribution Rates and the 2026 Ceiling Change

Both employer and employee contribute 5% of the employee's monthly salary to the SSF. Contributions are due by the 15th of the following month.

SSF Benefit Coverage

The SSF provides meaningful protections that employees understand and value. Key benefits include sick pay at 50% of wages for up to 90 days per year, maternity benefit at 50% of wages for 90 days, unemployment benefit at 50% of wages for up to 180 days, and an old-age pension for employees who have contributed for at least 180 months.

4. Workmen's Compensation Fund (WCF)

Separate from the SSF, the Workmen's Compensation Fund (WCF) is an employer-only contribution administered by the Department of Labour Protection and Welfare. It covers employees who suffer work-related injury, illness, disability, or death.

The annual WCF contribution rate ranges from 0.2% to 1% of total annual payroll, depending on the risk classification of the business. The annual wage per employee used for calculation is capped at THB 240,000. Employers file and pay the WCF contribution annually, typically in January.

The WCF is one of the most commonly missed filings by foreign companies running Thailand payroll in-house. It does not follow the monthly PND/SSF rhythm, it is filed with a different government department, and it is frequently overlooked — until a workplace injury claim or a Department inspection brings it to attention.

5. Employee Welfare Fund (EWF) — New from October 2026

From October 1, 2026, Thailand introduces a mandatory Employee Welfare Fund for all private sector employers with ten or more employees. This fund — established under the Labour Protection Act but inactive since 1998 — has now been formally activated.

How It Works

Both employer and employee contribute 0.25% of the employee's monthly wages to the EWF, with no salary ceiling. Unlike the SSF, the EWF is a savings-based mechanism: contributions accumulate for each employee and are paid out as a lump sum when employment ends, regardless of the reason for departure (including resignation). The contribution rate increases to 0.5% from October 2031.

Provident Fund Exemption

Employers who already operate a qualifying voluntary Provident Fund (PVD) may apply for exemption from EWF contributions — provided the PVD covers all employees from their first day of employment, applies contribution rates equal to or greater than the EWF minimum, and meets governance requirements. Employers with PVDs that cover only senior staff or employees after a waiting period will not qualify for exemption without restructuring their fund rules.

What this means in practice: For employers without a PVD, October 2026 brings a new payroll deduction, new contribution filings, and new registration obligations. For employers with existing PVDs, a compliance review against the exemption criteria is advisable before the October deadline.

6. Severance Pay

Thailand's Labour Protection Act requires employers to pay statutory severance to employees who are terminated — for any reason other than serious misconduct — and who have completed more than 120 days of continuous service.

Severance is calculated on the last monthly wage rate. It cannot be waived by contract. Notice in lieu of severance (payment in lieu of notice) is separate from this obligation — both may be due simultaneously on termination.

Employers with long-tenured Thai workforces who have not provisioned for this liability regularly face a material unexpected cost when restructuring. Tracking severance accruals as an ongoing payroll obligation — rather than calculating from scratch at the point of termination — is both more accurate and more financially prudent.

7. Statutory Leave Entitlements

Employers in Thailand are required to provide the following statutory leave entitlements:

8. Thailand Payroll Compliance Calendar

Managing Thailand payroll means managing multiple deadlines across multiple government agencies. The following summarises the key recurring obligations:

9. Common Payroll Compliance Mistakes in Thailand

Based on the compliance landscape in Thailand, these are the most common gaps that surface when foreign companies manage their own payroll or use providers without strong in-country capability:

• Outdated SSF ceiling: Still applying the pre-2026 THB 750 cap instead of the updated THB 875, leading to under-contribution and under-withholding.
• WCF not filed: The annual Workmen's Compensation Fund contribution is missed entirely because it falls outside the monthly PND/SSF cycle.
• PND 1 Kor reconciliation gaps: Discrepancies between the twelve monthly PND 1 filings and the annual PND 1 Kor summary — a consistent trigger for Revenue Department scrutiny.
• English-only Form 50 Tawi: Withholding tax certificates issued only in English, which Thai employees cannot use effectively for their personal tax filings.
• Severance not provisioned: No ongoing accrual of severance liability, leading to an unplanned material cost on termination of long-tenured employees.
• EWF not prepared for: No planning for the October 2026 Employee Welfare Fund launch — registration, payroll system updates, and potential PVD exemption assessment all require lead time.
• Provident fund administration gaps: Where PVDs are offered, mismatches between payroll records and provident fund data delay internal and external audits.

10. Managing Thailand Payroll with a Specialist Partner

Thailand's compliance framework is manageable — with the right processes, the right local knowledge, and a provider that stays current with regulatory changes. What creates risk is managing it at arm's length, from a regional hub, without deep in-country expertise.

Promenics provides payroll outsourcing services in Thailand through qualified in-country compliance partners. Our Thailand operation handles the full compliance cycle — monthly tax and SSF filings, WCF, annual reconciliations, Form 50 Tawi in Thai, and provident fund coordination — for foreign companies operating across the Kingdom.

Frequently Asked Questions