Thailand, a newly industrialized economy, is the 4th richest nation in Southeast Asia according to GDP per capita. The country’s economy is largely driven by exports including computers, cars, electrical appliances, rubber, jewelry, footwear, textiles, and fishery products. Thailand has set long-term strategic and economic goals as part of its 20-Year National Strategy (2017-2036) to roll out major reforms that address human capital, economic stability, environmental sustainability, equal economic opportunities, and competitiveness.
Currency: Thai Baht
Principal Language: Thai
Government: Framework of a Constitutional Monarchy
Capital City: Bangkok
Major Cities: Samut Prakan, Nonthaburi, Chon Buri, Nakhon Ratchasima
Written employment contracts are not mandatory in Thailand, but it is advisable to enter into written contracts to avoid any misunderstandings related to the employment terms. The Thai law does not have provisions as to which specific information must be in the contracts. Foreign employees are entitled to have the contracts in English, but a copy in the Thai language must be provided to the Department of Employment for issuing a work permit.
The regular work schedule comprises 8 hours per day and 48 hours in a week. The work schedule cannot be more than 7 hours per day or 42 hours in a week for hazardous work. Employees are entitled to rest periods of at least 1 hour after 5 hours’ continuous work. In case an employer requests overtime work of at least 2 hours, employees are entitled to a rest period of 20 minutes before commencing the overtime work.
Employers may request employees to work overtime only in cases of emergencies or if the nature of assignment requires continuous work. Employees who work overtime on a regular day are entitled to 50% premium over their regular pay, while those who work overtime on holidays are entitled to 100% premium. The total overtime cannot be more than 36 hours in a week.
The following national holidays are observed in Thailand:
- Jan. 1: New Year's Day
- Makha Puja Day
- Chakri Day
- Songkran Festival (Thai New Year)
- May 1: Labor Day
- Coronation Day
- Visakha Puja Day
- Asanha Puja Day
- Aug. 12: Her Majesty the Queen's Birthday
- Oct. 23: Chulalongkorn Day
- Dec. 5: His Majesty the King's Birthday
- Dec. 10: Constitution Day
- Dec. 31: New Year's Eve
In case a holiday falls on a weekend, it is observed on the next working day.
Employees are entitled to at least 6 days’ paid leave annually after completing 1 year of employment. Unused annual leave can be accumulated on a year-to-year basis and employers can grant additional annual leave in subsequent years. Employees who are yet to complete a year of employment may get annual leave on a pro-rata basis.
Employees are entitled to 30 days’ paid sick leave in a year. An employer can ask employees to submit a medical certificate if they are sick for 3 continuous days.
Female employees are entitled to 90 days’ maternity leave out of which 45 days are compensated at full pay while the remaining is paid at full pay by the social security system.
Spouses or partners of employees having a baby are entitled to 52 weeks’ paternity leave. Mostly, employees are entitled to return to their positions at the end of the parental leave. Employers may prefer employees who hold key positions for similar jobs after 6 months. However, reinstating in the earlier position cannot be guaranteed.
Employees are entitled to unpaid personal leave for essential errands according to the employer’s work policies and rules.
Military Service Leave
Employees are entitled to 60 days’ leave in a year for military service.
Employees are entitled to unpaid leave for training or attending a course/program with a definite duration. Employers can refuse training leave if it would adversely affect their business or if an employee has already taken the leave on 3 or more occasions or for 30 days or more.
Pension and Social Security
The fund established under the Social Security Act of 1990 provides benefits for disability, death, sickness or injury, old age, maternity, and unemployment. The government funds the social security system with the contribution equal to 32.75% of wages, along with contributions of 5,184 baht from employees and employer, and an additional employee contribution of 3% of pay.
- Individuals who continue to work for their employer past the age of 60 years, or
- Individuals aged between 15 and 60, or
- Individuals who are not employees but make voluntary contributions.
Employees who have contributed to the Social Security Fund for a minimum 12 months out of the 36 months before having a child are entitled to child benefit of 350 baht per month for each child. If the insured individual becomes disabled or dies, the benefit is provided until the child’s 6th birthday.
The designated beneficiaries of the insured are entitled to death benefits if the insured person dies due to cause unrelated to work and has made contributions for a minimum of 1 month out of the 6 months before death. The survivor benefit, equal to 60% of the deceased’s last monthly salary (up to 15,000 baht) is paid and divided equally among eligible survivors.
Employees who have made contributions for a minimum 3 months out of the 15 months before becoming disabled are entitled to disability benefits.
Injury or Sickness Benefits
Employees who have made contributions for a minimum of 3 months out of the 15 months before treatment for an illness or injury are entitled to sickness or injury benefits.
Eligible maternity benefits include a lump-sum payment equal to 50% of wages and grant of 12,000 baht for the first 2 children.
Individuals who contribute to the fund and have stopped working are entitled to old-age benefits at the age of 55. The benefits consist of a superannuation gratuity (lump-sum payment) or a superannuation pension (monthly pension). The amount of benefits is calculated based on the number of years of contributions.
The workers' compensation scheme is funded by employers’ contributions, which range from 0.2% to 1% of annual payroll depending on the risk tolerance of a business. Employees who suffer a work-related illness or injury are entitled to monthly benefit and compensation for medical expenses from the Compensation Fund.
Medical and Rehabilitation Expenses
Employees who suffer a work-related illness or injury receive medical treatment up to 45,000 baht per illness or injury.
Permanent Partial Disability
Employees who suffer a partial work-related disability receive 60% of their monthly salaries (up to 12,000 baht each month) up to 10 years. The duration of payments is based on the degree of disability.
Permanent Total Disability
Employees who suffer a total work-related disability receive 60% of their monthly salaries (up to 12,000 baht each month) up to 15 years. The duration of payments is based on the degree and type of disability.
The survivors of the deceased, who died due to a work-related illness or injury, are entitled to a pension equal to 60% of the deceased’s last monthly salary. The pension is paid for 8 years and is divided among the employee’s spouse, parents, and children (under the age of 18).
How GPS can Help
With our Global PEO/Employer of Record services, companies can expand into Thailand and hire their employees without having to establish a branch office or subsidiary in Thailand.
- Your candidate is hired via our Thailand PEO. If needed, we can also help you find the right talent in any country with our comprehensive global staffing services.
- Your new employee begins work quickly as we take care of employment contracts, statutory and non-statutory benefits, and running their payroll - all in full compliance with Thailand laws.
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- With no contractor risks, pass on the compliance burden to Global PEO Services.
Spin Off/M&A Support
- Ensure continuity of payroll, benefits and HR support when acquiring or spinning off a business with employees overseas.
24/7 Support in 100+ Countries
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With our Global PEO, you get access to Mihi, our proprietary SaaS solution for time and attendance, vacation, leave management and benefits enrollment and management. Mihi enables clients to have easy access to employee data in real time. It is designed specifically for companies with a global workforce, especially when working in multiple countries with low headcount.
Ready for Growth When You Are
When ready, we can seamlessly transition you from the PEO/EOR model to your own legal entity and provide ongoing international HR, finance, legal, compliance and staffing support. Learn more about our end-to-end international expansion services.