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Hiring Your First Employee in Thailand

There are many things you’ll need to know before you move ahead with hiring in Thailand, but here are our top 3 points to cover first:

Employment in Thailand

Employer and Employee Social Security in Thailand

Both employer and employee contribute 5% up to a maximum of 750 Baht per month.

Tax in Thailand

Tax Rates in Thailand

The personal income tax rate in Thailand is 0-35%, depending on income level.

Corporate Tax in Thailand

The corporate tax rate in Thailand is 20% of taxable profit.

Payroll in Thailand

Social Security Registration in Thailand

All employers and employees (unless exempt) must register with the social security system to make contributions and receive benefits.

13th/14th month bonus in Thailand

There are no mandatory 13th and 14th month bonuses in Thailand.

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It’s going to be hard to employ someone remotely. Here’s what else you should be worried about:

The risk of non-compliance is very high, especially when employing in a new country like Thailand

Employing in an unfamiliar country like Thailand can be overwhelming. The burden and risk of non-compliance is all on you and your company and you need to be careful when navigating the employment and tax laws of Thailand. The information you’re looking at may be inaccurate, outdated or in another language. The consequences of non-compliance in Thailand are far too high to not invest time and money in thoroughly understanding Thailand’s jurisdiction.

Involving tax and immigration providers early is the number 1 most preferred method to manage compliance risks for companies, with 72% stating that they are focusing on outsourcing these services early on in the assignment.

There are many hidden costs that you may have overlooked

When employing in Thailand, it is highly likely that you may fail to factor in some costs involved while estimating a budget for the assignment. Usually, these costs occur during the course of employment and tend to be country-specific. They are often unpredictable and unavoidable resulting in the assignment being far more expensive than the business intended it to be. Hiring just one employee in Thailand doesn’t justify the effort and cost it takes for a company to learn everything from scratch about employing in Thailand.

Outsourcing services is the most preferred way for global mobility professionals to contain costs with 71% stating that they have already made outsourcing changes in an effort to maximise cost savings. Unsurprisingly, outsourcing is preferred over reducing the number of assignments/transfers or improving in-house administrative processes as a method to save costs.

These considerations are common when hiring an employee in any new country. In our years of experience employing in Thailand we have helped our clients with several other problems specific to Thailand. Here’re a few examples:

Other Issues Our Clients Have Encountered When Employing in Thailand

Provident Funds in Thailand

In addition to social security contributions, there is a voluntary pension contribution to a Provident Fund. The employee can contribute between 5-15% of monthly wage, and that must be matched by the employer.

Annual and Sick Leave in Thailand

Employees are entitled to 6 days annual leave plus 13 public holidays, and 30 days of paid sick leave per year.

Severance Pay in Thailand

Employees with 4-12 months of service are entitled to 30-days pay as severance upon termination. These amounts increase with more years of service.

The Employer of Record Solution

As you can see from this overview, the process of hiring even one employee in Thailand can be a real challenge for any HR department. This is why the Shield GEO Employer of Record (EOR) solution is a cost-effective and simple way to address your payroll, tax and immigration requirements. The EOR becomes the legal employer of your worker in Thailand, with a registered entity that is already in place and prepared to take care of your employment needs.

Our team members can offer personal service, quick communication and the expertise of our regional partners to ensure that our EOR service is delivered seamlessly to support your staff assignments.

Here is a quick summary of what you can expect from your Shield GEO regional account manager:

  • A single point of contact for all employee or HR issues and questions
  • Assistance with meeting Thailand’s requirements for the employment contract
  • Obtaining visas and work permits sponsored by our Thailand EOR
  • Full compliance with Thai payroll, immigration and employment laws
  • Monthly payroll and employment administration

For a HR department located in the home country, the Shield GEO team becomes a local, dedicated resource to handle every aspect of your employee assignments. This allows you to focus on supporting your staff’s project and performance needs, while we take care of the multiple employment administration tasks for you.

 Need more information about employing in a new country? Learn more about:

 

 

Looking to hire an employee in Thailand? Get in touch.

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