Employer of Record Thailand
Our Employer of Record in Thailand service enables clients to hire employees without the need to operate a local legal entity there.
It makes a big difference to develop a new market with your own personnel on the ground. Particularly for functions related to sales & marketing, business development, distributor management, and service & maintenance, our customers are very satisfied using our Thailand Employer of Record Service.
Our customers and their local teams can be free of the distractions of administrative tasks and complex local requirements. So you can fully focus on the development of your core business.
If your local business grows large enough, you can easily transfer the employees to your own subsidiary. It also provides a quick exit strategy if necessary. In addition to Thailand , we offer Employer of Record services in several other countries.
- Employer of Record Thailand – FMC Group’s Approach
- Hiring an Employee
- Income Tax
- Typical Benefits
- Visa for the Employees
- Time off Policies
- Terminating an Employee
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Employer of Record Thailand - FMC Group's Approach
- Quick, flexible, and easy entry into Netherlands in compliance with local employment laws
- Complete control over business development with your own team
- Good option for building up, managing, and supporting your distributors and key accounts by directly observing local developments and adjusting the strategy whenever necessary
- Using our comprehensive recruitment experience for international clients, we can form a local team that fits your corporate culture.
- Focusing on your core business instead of dealing with the time-consuming and complex local administrative tasks
- Allowing for easy market exit if necessary
- Integrating your employees into our team through motivational events and special meetings
EOR Thailand Management & Reporting Flow
Hiring an Employee
Employment Contract – indefinite vs. fixed term
In Thailand, employment contracts can be either oral or written. However, it is generally advisable to have a well-defined, written employment contract in place, preferably in the local language, to ensure that all terms and conditions of employment are clearly spelled out.
This written contract should include details regarding the employee’s compensation, benefits, and termination requirements.
When drafting employment contracts or offer letters in Thailand, it is important to specify the salary and any compensation amounts in the local currency, which is the Thai Baht (THB), rather than using a foreign currency. This ensures clarity and compliance with local regulations.
In Thailand, the duration of the probationary period can be determined through mutual agreement between the employer and the employee. While there is a standard probation period of 90 days, it is possible to extend the probation period to a maximum of 119 days if both parties agree to do so.
It’s important to note that Thai labor law requires employers to provide severance pay to employees who are terminated after 120 days of employment. Therefore, it is advisable for employers to ensure that probationary periods do not exceed 119 days to avoid this obligation.
During the probationary period, employers have the flexibility to assess the employee’s performance and suitability for the position. If an employer decides to terminate an employee during this period, they are generally not required to provide a notice period or severance pay, as long as the termination is within the agreed-upon probationary period
Work Week, Overtime & Maximum Working Hours
In Thailand, employees and employers can agree on normal working hours, but these hours should not exceed 48 hours per week. If employees are required to work beyond their normal hours, those additional hours are considered overtime. It’s important to note that overtime pay is mandatory for employees working beyond their standard hours.
The maximum limit for overtime hours per week is 36 hours. Employees are also entitled to at least one day off per week, and the interval between days off should not exceed six days.
The rate of overtime pay varies depending on when the overtime hours are worked:
- On weekdays, overtime is generally paid at 1.5 times the base salary.
- On weekends (Saturdays and Sundays), overtime is paid at a higher rate of 3 times the base salary.
Employers are obligated to provide overtime compensation to employees as per these rates when employees work beyond their standard working hours.
In Thailand, the individual income tax is calculated based on progressive rates that range from 0% to 35%. The rate applied to an individual’s income depends on their total taxable income for the year. The higher the income, the higher the tax rate applied to that portion of income.
|Tax Rate (%)
|Up to THB – 150,000
|Up to THB – 300,000
|Up to THB – 500,000
|Up to THB – 750,000
|Up to THB – 1,000,000
|Up to THB – 2,000,000
|Up to THB – 4,000,000
|Over THB – 4,000,000
In Thailand, there are various options for employers to provide additional benefits to their employees beyond the mandatory social security coverage. These additional benefits are typically offered to attract and retain talent and may vary from one employer to another. Here are some common non-mandatory employee benefits that employers in Thailand may offer:
- Supplementary Health Insurance: Employers may provide supplementary health insurance plans to their employees, including executives and expatriate workers. These plans can offer additional coverage and benefits beyond the basic healthcare provided by the government’s universal healthcare scheme.
- Life Insurance: Some employers offer life insurance coverage as part of their employee benefits package. This coverage provides financial protection to employees and their families in the event of the employee’s death.
- Provident Fund: Employers can establish provident funds that encourage retirement savings for their employees. Employers may match or contribute to employees’ savings in these funds, which can help employees save for their future retirement.
Visa for the Employees
To work legally in Thailand, foreign employees typically need a work permit, and the process involves cooperation between the employee and the employer
Employment Offer: Foreign employees must secure a job offer from a Thai employer. The employer should provide a formal employment contract detailing the terms and conditions of employment.
Work Permit Application: The work permit application process must be initiated by the employer on behalf of the foreign employee. The employer typically handles the administrative aspects of the application.
Time off Policies
In Thailand, employers are generally required to provide paid public holidays to their employees. The number of public holidays may vary depending on the region and local customs. However, there are typically around 13 paid public holidays (15 days including regional holidays) recognized by the government in Thailand each year.
- New Year’s Day
- MakhaBucha Day
- Chakri Day
- Songkran Day (3 days)
- Labor Day
- Coronation Day
- VisakhaBucha Day
- AsarnhaBucha Day
- Queen’s Birthday
- Chulalongkorn Day (Rama V Day)
- King’s Birthday
- Constitution Day
- New Year’s Eve
In Thailand, if a public holiday falls on a weekend (Saturday or Sunday), it is common practice to observe the holiday on the following workday. This is done to ensure that employees have the opportunity to enjoy the benefits of the holiday and have a day off from work even if the holiday itself falls on a non-working day.
In Thailand, employees are generally entitled to a statutory minimum of 6 paid vacation days per year, and this entitlement typically starts after the completion of the first year of service. However, in practice, many employers, especially those employing professionals or skilled workers, often provide more generous paid vacation benefits.
It’s common for employers to offer 10-15 days of paid vacation per year, which exceeds the statutory minimum requirement. The exact number of paid vacation days can vary from one employer to another and may depend on the employment contract, company policies, and industry standards.
Under Thai labor law, employees are generally entitled to annual sick leave of up to 30 paid working days per year. During this sick leave period, employees continue to receive their regular salary. However, if an employee is absent due to illness for three or more consecutive working days, the employer has the right to request a medical certificate as proof of the illness.
Other Leave Types
In Thailand, various types of leave entitlements may be provided to employees depending on their specific circumstances and the employer’s policies. Some of these leave types include:
- Maternity Leave: Female employees are entitled to up to 98 days of maternity leave. During this period, 45 days are typically paid by the employer, while the remaining 45 days are covered by the social security fund.
- Paternity Leave: As of the information provided, there are no statutory requirements for paternity leave in Thailand. However, some employers may offer paternity leave as part of their benefits package or policies.
- Monkhood Leave: This type of leave is typically available to male employees who wish to enter monkhood temporarily. The duration of this leave may not exceed 120 days.
- Hajj Leave: Hajj leave is typically granted to Muslim employees who intend to make the pilgrimage to Mecca. Similar to monkhood leave, it is often subject to a maximum duration of 120 days.
- National Service Leave: This leave may apply to employees who are required to fulfill mandatory national service or military obligations. The duration and conditions for this leave may vary.
- Training/Exam Leave: Some employers may provide leave for employees to attend training programs or take exams relevant to their job or career development.
- Sterilization Leave: In certain cases, employees may be granted leave for medical procedures, such as sterilization, based on medical necessity or personal choice.
- Marriage Leave: Marriage leave may be offered to employees to celebrate their wedding. The duration of this leave can vary between employers.
- Hospitalization Leave: Employees may be entitled to leave for hospitalization or medical treatment when facing health issues.
Terminating an Employee
In Thailand, employees who have been employed for less than 120 days can be terminated without cause, and there is no obligation for the employer to make severance payments in such cases.
For termination without cause for employees who have been employed for more than 120 days, the employer is generally required to provide written notice of at least one month. Additionally, the employer should make a severance payment to the employee based on the employee’s length of service, as specified in your previous message:
- For employees with service between 120 days and less than 1 year: 30 days of salary and allowances.
- For employees with service between 1 year and less than 3 years: 90 days of salary and allowances.
- For employees with service between 3 years and less than 6 years: 180 days of salary and allowances.
- For employees with service between 6 years and less than 10 years: 240 days of salary and allowances.
- For employees with service of 10 years or more: 300 days of salary and allowances.
- For employees with service of 20 years or more: 400 days of salary and allowances.
Under Thai labor law, when terminating an employment contract without cause for indefinite contracts, employers are generally required to provide advance notice of at least one full payment cycle, which is typically 30 days. However, this notice period can be extended to a longer period, not exceeding 3 months, if specified in the employment contract or work rules. The exact notice period should be in accordance with the terms outlined in the employment agreement or company policies.
Disclaimer: Although we carefully researched and compiled the above information, we do not give any guarantee with respect to the actuality, correctness, and completeness.