Employer of Record in Thailand (EOR in Thailand)
Last updated
- Capital City
- Bangkok
- Languages
- Thai
- Currency
- Thai Baht (THB)
- Population Size
- Approx. 66.5 million
- Employer Taxes
- 5% – 6.5%
- Employee Costs
- aprox. 5%
- Payroll Frequency
- Monthly
Hire Globally, Pay Locally, Expand Effortlessly
We are your Employer of Record in Thailand, its strategic location in South East Asia and a vibrant economy boosted by infrastructure investment, offers an enticing environment for international businesses ready to take chances. Despite the advantages, the complexities of Thailand’s regulatory framework, including its labor laws and tax regulations, can be a lot for those not prepared for the challenge. However, an Employer of Record (EOR) in Thailand can serve as your local expert, taking on legal responsibility for workers and ensuring a smooth entry into the market and ongoing adherence to all necessary regulations.
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Choosing Between an Employer of Record and Company Incorporation in Thailand
While establishing a subsidiary in Thailand is traditionally seen as the go-to for local expansion, opting for an Employer of Record offers several comparative advantages, such as:
- Speed – The business setup process in Thailand is expedited with an Employer of Record, enabling you to start operations and hire staff much faster. Company incorporation can take several months of planning and documentation, whereas an Employer of Record can make your team operational within weeks.
- Compliance – Both Employer of Records and subsidiaries must comply with Thailand’s tax laws and labor regulations. However, Employer of Records in Thailand have the specialized knowledge to handle these complexities and ensure continuous compliance without the need for in-house experts.
- Cost – For small teams or temporary expansions, Employer of Record services are often more cost-effective than setting up a subsidiary, as you avoid upfront incorporation expenses and ongoing administrative costs.
- Control – While incorporation offers extensive control over HR, finances, and operations, Employer of Records can provide significant control over your workforce while reducing your administrative responsibilities.
PEO/EOR Vs Company Incorporation
The Advantage in Figures
| PEO/EOR | Company Incorporation | |
|---|---|---|
| Price | 80% Less Expensive | |
| Market Entry | 2-5 Days | 6 Months |
| Employee Turnover | Decrease by 14% | |
| Recommendation | 98% of the Current PEO Clients | |
| Administrative Fees | Saves an Average of $450 | |
| Costly Payroll and Compliance Fines | Help Avoid | |
| Company Growth Rate | 7 – 9% | |
| ROI | 27% | |
| Closed During Pandemic | -58% | |
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The Advantages of a Thai Employer of Record
Efficient Setup
Navigate complex tax system and labor laws seamlessly in Thailand. Employer of Record services simplify the setup process, ensuring compliance from day one.
Expert Compliance Management
Thailand’s regulations can be complex, but Employer of Records have the expertise to keep your business compliant with local tax laws, labor rules, and social security contributions.
Minimized Risk and Liability
Acting as your legal employer in Thailand, an Employer of Record reduces your risks associated with employment regulations and ensures compliance.
Focus on Core Business Objectives
Delegate HR tasks like recruitment, payroll processing, and tax management to your Employer of Record in Thailand, freeing up your time to focus on core business activities.
Cost Efficiency
EOR services can be more economical than establishing a local subsidiary, particularly for smaller teams or temporary needs, by avoiding initial incorporation costs and ongoing administrative burdens.
Our EOR in Thailand: How does it work?
We provide a simple setup process to get you started in Thailand as quickly as possible.
- 1
We meet with you to discuss the scope of your project and its details. Based on the requirements provided, we develop a plan best suited to your needs that will also align with your greater company goals and values.
- 2
Through our legal entity, you can hire your staff and begin your day-to-day operations in Thailand.
- 3
We handle all the steps related to the onboarding process. From there, our PEO company takes care of all the necessary legal and administrative responsibilities involved with ongoing HR operations.
- 4
Once onboarded, your staff can immediately begin operations and make the best use of available time and resources.
The Differences Between PEOs and Employer Of Record
When considering a partnership with a PEO in Thailand, you will likely also hear the term EOR (Employer of Record). Typically, the two terms are largely interchangeable based on the kind of services they offer. The main difference between the two is the level of liability taken on by the PEO/EOR and the parties involved in the agreement.
- A PEO provides all HR services to employees on behalf of other companies
- A PEO agreement is made between the PEO and the original company to share the responsibilities for the employee
- An EOR in Thailand legally hires the employee on behalf of the original company and provides all HR services
- An EOR agreement is made between the EOR and the employee on behalf of the original company
In Thailand both services are indistinct according to national regulations, but INS Global can offer any elements of both according to your requirements
INS GUIDES
Check Our Thailand Labor Law Guide
Learn how the Thailand Labor Law Guide is applied in all aspects and situations, from an employer and employee perspective.
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Thailand Labor Law Overview
Employment Contracts In Thailand
Contracts must be in Thai and outline employment terms, including salary, benefits, working hours, termination clauses, and minimum wage requirements. An Employer of Record ensures your contracts comply with Thai law and protect your interests.
The standard working hours in Thailand are 8 hours a day and a maximum of 48 hours a week. The working hours are set out in the Labor Protection Act, which also set out other basic legal protections for employees working in Thailand.
For employees who work in an environment deemed dangerous to their health and safety, their working hours cannot exceed more than 7 hours a day or a maximum of 42 hours a week.
Employees are able to work overtime for a maximum of 36 hours per week. Overtime rates vary according to the specific day:
Regular working hours during a holiday: must be 2 times the employee’s standard hourly rate.
Overtime during a holiday: must be 3 times the employee‘s standard hourly rate.
Types Of Leave
Employees in Thailand who have worked for at least a year are entitled to a minimum of 6 fully paid annual leave days. An employer can grant additional leave days according to the labor contract provisions.
Unless otherwise provided by the employment contract or employee handbook, unused annual leave days may be accumulated. Leave entitlement is provided for in the Labor Protection Act.
There is no limit on sick leave in Thailand. However, only 30 days of paid sick leave are provided for in a calendar year. If an employee has taken more than 3 consecutive sick days, an employer can request the employee to produce a medical certificate.
Female employees can take up to 98 days of maternity leave in Thailand. During that time, the employer is required to provide the employee’s full salary for up to 45 days, whereafter the employee is eligible to receive a lump-sum payment from the social security system, which is equivalent to full pay.
According to the Labor Protection Act, there are no provisions for mandatory paternity leave.
Tax Law in Thailand
The Thailand Revenue code requires personal income tax payments to be made on any income sourced in Thailand from both residents and non-residents. Tax residents in Thailand are also required to make tax contributions on any income that is sourced outside of Thailand.
A person is considered a tax resident in Thailand if they are physically present in Thailand for 180 days or more in a calendar year. The maximum tax rate payable, set at 35%, is applicable to income exceeding 5 million Thai baht.
With social security, both resident and non-resident employees who receive their income from a Thai employer are required to make social security contributions.
The contributions which are made to the Thailand social security fund are made in equal contributions from both employers and employees (5% of the employee’s salary, to a maximum of TBH 750 per month).
Social security contributions are withheld at the source, and payment is made by the employer when an employee receives their income.
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Frequently Asked Questions
Global Employer of Record is an effective solution for companies looking to expand their workforce abroad effortlessly.
This approach allows you to outsource the international hiring process quickly and efficiently, providing access to a global talent pool while still managing payroll compliance in each country.
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