The main concern for foreign companies hiring in Thailand is compliance with unfamiliar tax laws, social security contributions and employment regulations. When employing in Thailand, it’s a good idea to partner with a company equipped with the necessary HR know-how to ensure your business operates in line with these important considerations. Here’s what you need to know about Thailand Payroll & Tax.
Understanding Payroll & Tax in Thailand
There are two main types of employee contributions to bear in mind when employing in Thailand: Social Security and Provident Fund.
Social Security contributions in Thailand are 5% for both employers and employees, with submissions due on the 15th of each month. A penalty of 2% applies for delay of submission and remittance to the local authorities.
The Provident Fund is set up voluntarily between employer and employee and allows the employee to save up for their retirement. Contributions to the fund range from 2% to 15% of the employee’s basic salary, with the fund regarded as a benefit to encourage workers to work with the employer for a longer period of time, thus reducing employee turnover.
Income Tax in Thailand
Residents of Thailand, persons living in Thailand for more than 180 cumulative days in the calendar year, are required to pay income tax on their earnings in Thailand. Income in Thailand is taxed on a progressive scale, according to the following rates:
|Amount of Taxable Income (THB)||Tax rate applied|
|150,001 to 300,000||5%|
|300,001 to 500,000||10%|
|500,001 – 750,000||15%|
|750,001 – 1,000,000||20%|
|1,000,001 – 2,000,000||25%|
|2,000,001 – 5,000,000||30%|
|5,000,001 and over||35%|
Our solution to managing payroll in Thailand
We offer a complete payroll solution which covering setting up payroll, ensuring compliance with Thai regulations and monthly submission and remittance of taxes to the local authority so you can have peace of mind when operating in the Thai market. Common questions you may have when employing in a new market such as Thailand may include:
- How do I register my employees with the local tax authorities?
- How do I calculate monthly tax payments for my employees?
- How do I terminate an employee under Thai employment law?
As your payroll administrator in Thailand, we essentially become your HR department in Thailand, relieving you from the need for an internal service within your company. We take into account the following:
- Social security deduction and remittance
- Annual leave management
- Expense and benefit management
- Visa sponsorship (if applicable)
Thailand offers a multitude of opportunities to foreign companies and can be excellent place to start a business in Asia. However, there are numerous complexities involved in hiring and employing in a new market, including administering payroll. As a Global PEO with presence throughout Asia-Pacific, INS Global can simplify your global expansion with our tailored payroll solution. Whether you have a local entity or not, contact us today to learn more about how we can assist you.