Expand your business into Thailand - without an entity
Horizons provides global employment solutions for businesses wanting to hire employees and distribute payroll in Thailand. Through our Thailand PEO and Employer of Record, we manage your company’s payroll, benefits, and expenses in Thailand. Additionally, we oversee HR duties, as well as employment and tax compliance.
Horizons will act as your employees’ Employer of Record, which means you can begin doing business in Thailand without a local entity. This not only allows your business to go to market faster, but also has the potential to save your business thousands in expansion costs.
As the only Thailand PEO with an in-house recruitment team, Horizons will source, hire, and onboard your Thailand workforce. We hire employees in accordance with Thailand’s labor regulations and coordinate all expense claims and benefits payments. Although we act as your employees’ Employer of Record, you still maintain full autonomy and control over all employees.
Our Thailand PEO simplifies your expansion
Horizons enables your business to expand its operations into Thailand – without setting up a legal subsidiary.
Horizons ensures day-to-day guidance to help your business navigate Thailand’s labor laws and regulations. We also provide mandatory monthly payroll requirements, and absorb all local employment liabilities. Partnering with our Thailand PEO is the quickest and most cost-effective way to enter the Thailand market.
Employment & Labor Laws in Thailand
📝 Employment contracts in Thailand
Unlike the majority of countries in Asia, Thailand does not require employers to provide written employment contracts to employees. Despite this, it remains best practice for employers to draft concise, strongly-worded written contracts. This helps to avoid misunderstandings and to clearly establish the rights and responsibilities of employers and employees.
Thailand’s labor laws do not require specific provisions or language be included in an employment agreement. However, a copy of the agreement – written in Thai – must be given to the Department of Employment, in order to issue work permits. Additionally, employers must be prepared for courts in Thailand to uphold the provisions in these agreements.
By partnering with our Thailand PEO, Horizons’ team of local experts can provide assistance for drafting strong employment contracts that are compliant with local regulations.
⏰ Working hours in Thailand
The typical work week in Thailand is 48 hours, with the standard working day being eight hours. In the event that employers and employees agree to different working hours, they are able to do so as long as the total hours do not exceed 48 hours per week. Local employees are entitled to rest periods of at least one hour, after they have continuously worked for five hours.
Employees are also entitled to at least one day off per week. The time between days off cannot exceed six days.
📅 Holidays in Thailand
New Year’s Day
Chinese New Year
Makha Bucha (in lieu)
H.M. King’s Coronation
Visakha Bucha Day
Royal Ploughing Ceremony
H.M. Queen’s Birthday
Asahna Bucha Day (in lieu)
Buddhist Lent (in lieu)
Songkran Substitute Day Holiday
H.M. King’s Birthday
Mother’s Day, H.M. Queen Mother’s Birthday
Songkran Substitute Day
The Passing of King Bhumibol
Thailand Constitution Day
King Bhumibol’s Birthday
New Year’s Eve
🏦 Tax in Thailand
In Thailand, a social security fund is available to all employees. This reduces the financial risk from lost wages that may arise from sickness or injury, pregnancy and child birth, unemployment, and death.
Employers in Thailand are responsible for registering new employees with the social security office. Employers must also inform the social security office of any employee resignations or terminations during scheduled monthly submissions.
For tax purposes, both employers and employees contribute 5%. For a monthly wage of 1,650 THB, the minimum monthly contribution is 83 THB. For a monthly wage of 15,000 THB, the maximum monthly contribution is 750 THB.
If an employee earns less than 15,000 THB a year, they are exempt from taxes. For earnings above this amount, tax rates will range from 5% to 35%. A tax rate of 35% applies to yearly earnings above 4,000,000 THB.
🏥 Health insurance
Thailand has universal healthcare provided through the civil welfare system for public workers. It also has Social Security for private employees (including nationals and expats), and universal coverage for all other Thai nationals. The Social Security fund assigns employees a local hospital where they can receive care at no cost.
Employers may provide supplementary health insurance as an additional benefit to employees. Alternatively, employers can choose to provide their employees with an insurance allowance.
🏖 Vacation leave
After employees have been with a company for one year, they are entitled to at least six days of paid leave each year. Unused leave time can be accumulated and rolled over.
Employers can provide additional annual leave in subsequent years. They can also provide prorated leave to employees with less than one year’s service.
To become more competitive in the marketplace, some employers offer their employees between 10 and 15 day’s paid vacation each year.
😷 Sick leave
In Thailand, sick leave is provided as a separate benefit to annual vacation leave. After employees have been with an employer for one year, they are entitled to one month’s paid sick leave per year. An employer may request an employee to submit a medical certificate if they are sick for more than three consecutive days.
If an employee was injured or became ill at work, sick leave does not have to be used for subsequent days off.
👶 Maternity and paternity leave
Expecting mothers are entitled to three months of paid maternity leave. Employers pay 50% of this leave and the the remaining 50% is paid by the social security system. Maternity leave is paid at full pay.
Paid paternity leave of 15 days is available to state officials or employees whose wives have given birth.
😌 Personal leave
Personal leave can be taken by employees for situations deemed essential by the employer’s work policies in the contract agreement.
👮♂️ National service leave or military leave
Employees in Thailand are also entitled to National Service Leave or Military Leave. This type of leave is available for male employees who meet any of the following criteria:
- They are required for military practice
- They need to confirm their military status
- They are leaving to join the military
National Service Leave provides the same rate of pay to the employee. This type of leave cannot exceed two months.
🏃 Training leave
Employees can take unpaid leave for training purposes or to attend a course or program with a definitive duration. However, employers can refuse to provide training leave if it would negatively affect the business, or if the employee has previously taken leave on three or more occasions for a minimum of one month’s duration.
💊 Sterilization leave
Sterilization leave is provided to employees for family planning purposes. It is available to male and female employees going through a sterilization procedure. The applicable leave period is stated in the employee’s medical certificate.
🤷♂️ Other types of leave
Employees in Thailand may use other types of leave, but these are at the discretion of their employer. Some examples of additional types of employment leave in Thailand include:
- Marriage leave – This type of leave allows a person to miss work in order to participate in their marriage ceremony. It is based on the company’s policy.
- Huji leave – This type of leave is only eligible for Islamic employees and cannot exceed four months.
- Monkhood leave – This type of leave is only eligible for Buddhist men and cannot exceed four months.
- Hospitalization leave – This type of leave allows a worker miss work to assist a hospitalized relative.
- Compassionate leave – This is bereavement leave that is provided to workers who have recently lost a loved one.
💰 Termination and severance
Employers must provide written notice of at least one month before terminating an employee without a specific cause. Alternatively, the employer can pay the employee for the notice period.
Employers are responsible for providing severance payments in the following amounts, based on the length of service:
- 20 days but less than one year’s service – One month’s salary and allowances
- One to three year’s service – Three month’s salary and allowances
- Three to six year’s service – Six month’s salary and allowances
- Six to ten year’s service – 240 day’s salary and allowances
- Ten or more year’s service – 300 day’s salary and allowances
If the employee is terminated for economic reasons, employees with six or more years of continuous service are entitled to receive additional compensation. This compensation is equivalent to 15 day’s wages for every year of employment, up to a maximum payment that is equivalent to 360 day’s wages.
Work for more than 180 days is counted as one full year of service. This payment is made in addition to the severance pay described above.
Navigating employee terminations and handling severance packages can be complicated for companies expanding overseas for the first time. Horizons’ Thailand PEO can mitigate risk for foreign companies and provide guidance through this process.
💳 Thailand compensation and benefits
Thailand compensation laws
There is no universal minimum wage in Thailand. Rather, the minimum wage is determined by the province in which work is conducted. In 2018, Thailand increased its minimum wages by between 5 THB and 22 THB. Minimum wages were increased by as much as 7% in industrialized provinces such as Chonburi and Rayong.
Overtime in Thailand is paid at 1.5x an employee’s base salary on weekdays and 3x an employee’s salary on weekends.
Minimum Wage Country Comparison Chart
(Per month in USD)
Guaranteed benefits in Thailand
There are 13 paid public holidays each year in Thailand. This grants employees a total of 15 paid days off per year. Employees are also entitled to a minimum of six day’s paid vacation time – although many employers offer between 10 and 15 days.
Employees in Thailand are also entitled to different leave types that include:
- National service leave
- Training/exam leave
- Sterilization leave
- Monkhood leave
- Hujj leave
- Compassionate leave
- Marriage leave
- Hospitalization leave
Thailand benefit management
Employers in Thailand should be mindful of supplemental benefits that many employees may expect to receive. Even though Thailand has a universal health care system, a number of employers will offer supplemental health coverage as an added benefit. Many executives and expats in Thailand will request supplemental health and life insurance as part of their benefits.
Employers may also offer their employees a provident fund that encourages retirement savings. Employer contributions to these funds are required to be equal or greater than an employee’s contribution. Employers can provide this benefit through a variety of conditions that include working period, membership, job title, and salary rate.
Benefits and compensation restrictions
The majority of benefit and compensation restrictions will stem from agreements outside of an employment contract. Whilst trade unions and collective bargaining agreements are not the ‘norm’ in Thailand, employers need to ensure they are complying with statutory minimums.