There are specific rules in Thailand depending on whether your company employs residents or non-residents. The key concerns for a company that needs to comply with tax laws in Thailand are net taxable income, social security contribution, value added tax (VAT), corporate income tax, specific business tax (SBT), and property tax. Moreover, international treaties to avoid double taxation, international social security agreements, free trade agreements and special tax regimes for specific industries or sectors can make an indirect impact on a company’s tax environment.
A remote payroll in Thailand is where a foreign company, i.e. a non-resident company, payrolls a resident employee in Thailand. As per the Thailand Revenue Department a foreign company is defined as
-A company that carries out business functions in Thailand but is registered under a foreign law
-A company that does not carry on business operations in Thailand but derives income from Thailand
Thus a non-resident company is permitted to process payroll for Thailand residents who are on its payroll. Another option for a non-resident company to payroll its employees in Thailand would be to use a fully outsourced service like a GEO or PEO which will employ and payroll the staff on their behalf.
In some cases, a company will register their business in Thailand under one of the forms available but prefer to have another company administer its payroll. This can be accomplished through a payroll provider. It is important to note that the company, as the Employer of Record, is still fully responsible for compliance with employment, immigration, tax and payroll regulations. But the payroll calculations, payments and filings can all be outsourced to the payroll provider.
Larger companies with a commitment to Thailand may wish to run their own local payroll for all employees, foreign and local. In order to accomplish this, they will have to complete incorporation, register the business and then hire the necessary staff. There will be a need for in country human resources personnel who have the background needed to manage a Thai payroll, and can fulfill all tax, withholding, and payroll requirements.
This approach carries significant cost and requires some knowledge of local employment and payroll regulations. The company will need a local accounting firm and potentially legal counsel to ensure full compliance with Thai employment laws.
Companies can outsource the employment and payroll of their staff in Thailand to a GEO, like Shield GEO. This is possible for both foreign workers and Thailand nationals. This is the easiest, fastest and safest way to payroll staff in Thailand.
Shield GEO manages all aspects of payroll for workers in Thailand, including taxes, withholding, social security payments and other statutory requirements. Shield GEO becomes the Employer of Record and employs the staff on behalf of the client.
Staff are paid monthly with tax and social security deducted at source and paid to local authorities. Shield GEO will invoice the client monthly in advance of the payroll date. The invoice consists of the Total Cost of Employment (Base salary + Employers Statutory Contributions + Additional statutory contributions) and a Management Fee. Shield GEO provides the employees with payslips.
Read more about outsourced payroll and employment through Shield GEO.
(Thai: บาท, sign: ฿; code: THB)
|Social Security Registration ?||
An employer needs to register an employee as the “insured person” who starts working at the age of fifteen to sixty years old in the enterprise with 1 or more employees with the social security office within 30 days from the start of work.
|Documentation Required for New Employees ?||
Employment contracts and labour relations are governed by the Labour Protection Act, the Labour Relations Act, the Civil and Commercial Code, and the Labour Procedure Act. New employees in Thailand whether local or foreign are governed by the Labour Protection Acts B.E.2541 (A.D.1998).
|Corporate Income Tax ?||
Companies in Thailand are generally taxed at 20%. Branch corporate income tax rate is also 20%. However, corporate tax rates may vary as follows.
|Income Tax Rate ?||
|Sales Tax ?||
Current Value Added Tax (VAT) rate is 7%.
Business entities with an annual turnover exceeding 1.8 million Baht per annum is legally obligated to pay VAT.
|Withholding Tax ?||
Certain income types paid to companies can be subject to withholding tax at the point of source.
Such withholding tax rates on pre-specified categories of income are as follows.
Service and professional fees
|Employee Social Security (EE SS)||
Employees are obligated to contribute 5% of employee salary upto a maximum of 750 Baht per month. An employee is obligated to contribute between 2%-15% of the employee’s monthly wage to the Social Security Fund (SSF).
|Employer Social Security (ER SS)||
Employers are obligated to contribute 5% of employee salary upto a maximum of 750 Baht per month. An employer is obligated to contribute between 2%-15% of the employee’s monthly wage to the Social Security Fund (SSF). This contribution should match the contribution made by the employee.
|Payment Mode ?||
Manual/soft copy by cheque or online.
|Frequency of Salary Payment ?||
12 monthly pay periods.
|Invoice / Payslips required ?||
Available monthly as pdf.
|Minimum Wage ?||
Annual (US$) 3,012
|Time Off Work ?||
An employee is entitled to a minimum of 6 days of annual leave after working consecutively for one full year. For an employee who has not completed one year of service, the employer may provide an annual leave on a pro-rate basis.
|Medical Leave ?||
An employee is entitled to take sick leave with 30 days of paid sick leave per year. An employer may request a medical certificate if an employee is absent for three consecutive days. Days on which the employee cannot work because of injury or illness caused by work shall not be deemed sick leave.