Hiring in Thailand: Employment Law & Payroll Guide 2026

Overview

Thai employment law is employee-protective and well codified. The core statute is the Labor Protection Act B.E. 2541 (1998), usually shortened to the LPA. It sets minimum standards for working hours, leave, holidays, severance, and termination. Alongside it, the Social Security Act governs mandatory social insurance, and the Civil and Commercial Code covers the underlying employment relationship.

Here is what makes Thailand distinctive for international employers:

• Severance is generous and unavoidable. Statutory severance ranges from 30 to 400 days of wages depending on tenure. You cannot contract out of it.

• Minimum wage is set per province, per day. Rates currently range from THB 337 to THB 400 per day depending on where your employee works.

• 2026 brings real payroll changes. The social security wage ceiling rose on January 1, 2026, and a brand-new Employee Welfare Fund launches on October 1, 2026.

• Foreign hires need both a visa and a work permit. Sponsoring a foreign national typically requires a local entity that meets capital and Thai-staff ratio requirements.

Employers hire in Thailand either by setting up a local entity or by using an Employer of Record (EOR). Both paths are covered later in this guide.

‍

Employment Contracts

Thai law does not require employment contracts to be in writing. A verbal agreement is legally binding. In practice, you should always use a written contract. It protects both parties and is essential for work permit applications, disputes, and internal policy enforcement.

What to include

• Job title, duties, and reporting line

• Salary, pay frequency, and payment method

• Working hours, workplace, and any remote work arrangements

• Probation terms, if any

• Leave entitlements and benefits

• Termination and notice provisions

• Confidentiality and, where appropriate, post-employment restrictions

Contracts can be in English, Thai, or bilingual. If a dispute reaches a Thai labor court, documents will need Thai translations, so bilingual contracts are the practical standard. Any contract term below the LPA minimum is unenforceable, even if the employee signed it.

Probation

Probation is not defined by statute, but there is a magic number: 119 days. Severance rights begin once an employee completes 120 days of service. Most Thai employers therefore set probation at up to 119 days, so a termination during probation avoids severance.  

Note that notice rules still apply during probation, and a probationary employee is otherwise a full employee under the LPA.

Fixed-term contracts

Fixed-term contracts are allowed but tightly restricted. A genuine fixed-term contract that ends automatically without severance is only possible for specific project work outside your normal business, or seasonal work, completed within two years and agreed in writing at the start. In practice, most fixed-term arrangements do not qualify, and severance is still owed when the term ends.  

Two traps to avoid. First, a fixed-term contract cannot contain a clause letting either party terminate early or extend the term. Include one, and the contract loses its fixed-term status. Second, if the employee keeps working after the term ends and you keep paying, the contract converts to an indefinite one.

Work rules

Once you employ 10 or more people, you must prepare written work rules (a company handbook) in Thai covering working days, leave, discipline, complaints, and termination. The rules must be displayed at the workplace and kept on file.

‍

Working Hours and Overtime

• Standard hours: a maximum of 8 hours per day and 48 hours per week. Most office employers run 5-day, 40-hour weeks, but 6-day weeks remain common in manufacturing and retail.

• Hazardous work: capped at 7 hours per day and 42 hours per week.

• Rest breaks: at least 1 hour after no more than 5 consecutive hours of work.

• Weekly rest: at least 1 day off per week, no more than 6 days apart.

• Overtime cap: overtime plus holiday work cannot exceed 36 hours per week. Overtime generally requires the employee’s consent.

Overtime pay rates

‍

The hourly wage for a monthly-salaried employee is calculated as the monthly salary divided by 30, divided by the daily working hours. Certain senior managerial employees with hiring and firing authority are excluded from overtime pay.

‍

Minimum Wage

Thailand has no single national minimum wage. The National Wage Committee sets daily rates by province, reviewed periodically. As of 2026, rates range from THB 337 to THB 400 per day.

• Top tier, THB 400 per day: Bangkok, Phuket, Chonburi, Rayong, Chachoengsao, and Koh Samui (Surat Thani).

• Lowest tier, THB 337 per day: a small group of southern provinces including Narathiwat, Pattani, and Yala.

• Sector rule: since July 1, 2025, the THB 400 rate applies nationwide to certain hotel categories and licensed entertainment venues, regardless of province.

• Skilled-trade minimums: separate, higher daily minimums apply to certified skilled workers in designated occupations (for example, specialist construction trades and jewelry craftsmen), in some cases exceeding THB 600 per day.

A THB 400 daily rate works out to roughly THB 10,400 per month for a 26-day working month. Minimum wage mainly affects manufacturing, hospitality, and entry-level service roles. Professional salaries in Bangkok sit well above it, typically THB 20,000 to 50,000+ per month depending on the role.

Paying below the applicable minimum is a criminal offense, punishable by up to 6 months’ imprisonment, a fine of up to THB 100,000, or both, plus 15% annual interest on the shortfall.

Verify before payroll setup: provincial rates are adjusted periodically, and the government has publicly discussed further increases. Confirm the current rate for your employee’s work province at the time of hiring.

‍

Payroll and Taxes

Salaries are paid in Thai Baht, at least once a month. Payslips are standard practice, and employers must keep payroll records.

Personal income tax (PIT)

Thailand taxes residents on a progressive scale from 0% to 35%. An individual is tax resident if they spend 180 days or more in Thailand in a calendar year. The tax year is the calendar year.

‍

Employees benefit from personal allowances and deductions (for example, a THB 60,000 personal allowance and a 50% employment income deduction capped at THB 100,000), which reduce taxable income before these rates apply.

Employer withholding obligations

• Withhold PIT monthly from each salary payment based on the employee’s projected annual income.

• File form PND.1 and remit withheld tax to the Revenue Department by the 7th of the following month (the 15th if filing electronically).

• File the annual summary (PND.1 Kor) by the end of February each year, and issue withholding tax certificates (50 Tawi) to employees.

Employees then file their own annual return (PND.90 or PND.91) by March 31, or early April if filed online. There is no mandatory 13th-month salary in Thailand, though discretionary annual bonuses are common.

‍

Social Security Contributions

This is the area with the most change in 2026. There are now three statutory schemes to plan for.

Social Security Fund (SSF)

• 5% employer + 5% employee of monthly wages, under Section 33 of the Social Security Act.

• New wage ceiling from January 1, 2026: THB 17,500 per month, up from THB 15,000. The maximum contribution is now THB 875 per month for each party.

• Wage floor: contributions are calculated on a minimum wage base of THB 1,650 per month.

• Further rises are scheduled: the ceiling moves to THB 20,000 in January 2029 and THB 23,000 in January 2032 under the approved phased plan.

• Registration and remittance: register new employees with the Social Security Office (SSO) within 30 days of their start date, and remit contributions by the 15th of the following month. Late payment attracts a surcharge of 2% per month on the unpaid amount.

The 5% each side breaks down by benefit branch: 1.5% for sickness, maternity, disability, and death benefits; 3% for the old-age pension and child allowance; and 0.5% for unemployment insurance. The government adds a further 2.75% on top.  

Section 8 covers what these contributions actually buy your employees.

Workmen’s Compensation Fund (WCF)

The WCF covers work-related injury and illness. It is funded entirely by the employer, at a rate of 0.2% to 1% of annual wages depending on the business’s risk classification, calculated on a wage base capped at THB 240,000 per employee per year and paid annually.  

Injured employees receive compensation of 70% of wages for up to 10 years, alongside medical treatment, rehabilitation, and funeral costs.

Employee Welfare Fund (EWF): new from October 1, 2026

The EWF is a mandatory severance-style savings scheme under the LPA. It was originally due in October 2025 and was postponed by one year. It takes effect on October 1, 2026.

• Who it applies to: private-sector employers with 10 or more employees, including foreign-owned and BOI-registered companies.

• Contribution rate: 0.25% of wages from the employer and 0.25% from the employee, rising to 0.50% each from October 1, 2031.

• No wage ceiling: unlike the SSF, contributions are calculated on the full salary.

• Key exemption: employers that already operate a qualifying registered Provident Fund (with contributions of 2% to 15% of wages) may be exempt. Confirm your fund’s status before October 2026.

• Remittance: pay both shares to the Department of Labour Protection and Welfare by the 15th of the following month.

• Non-compliance: late payment attracts a 5% monthly surcharge. Failing to register, report changes, or filing false information can bring fines of up to THB 10,000 or imprisonment of up to 6 months, and serious violations can expose directors to personal liability.

Illustrative employer cost, Bangkok employee at THB 30,000 per month

‍

Budget roughly 5.5% to 6.5% on top of gross salary for statutory employer costs from late 2026, before any voluntary benefits such as a provident fund or private health insurance.

‍

Leave Entitlements

• Annual leave: a minimum of 6 working days per year after 1 year of service. Most professional employers offer 10 to 15 days. Unused statutory leave must be paid out or carried over by agreement.

• Public holidays: at least 13 paid public holidays per year, which must include National Labour Day (May 1). In practice the government typically announces 16 to 18 holidays each year, sometimes including one-off special holidays, and most employers follow the announced calendar. If a holiday falls on a weekly rest day, the next working day is substituted.

• Sick leave: as long as genuinely needed, with up to 30 days paid by the employer per year. You can ask for a medical certificate from the third consecutive day onward.

• Maternity leave: 98 days per pregnancy, including prenatal visits. The employer pays full wages for 45 days; the SSO pays a maternity cash benefit for eligible employees (see Section 8). Dismissing an employee for pregnancy is prohibited. Pregnant employees also cannot work between 10 PM and 6 AM, work overtime, work on holidays, or perform hazardous work, even with their consent.

• Paternity leave: no statutory entitlement in the private sector. Many employers grant 3 to 5 days as a matter of policy.

• Personal (business) leave: at least 3 paid days per year for necessary personal errands.

• Military service leave: paid leave for military inspection or drills, up to 60 days per year.

• Sterilization leave: paid leave for the period certified by a physician.

• Training leave: unpaid leave for approved training or examinations, subject to conditions.

‍

Employee Benefits

Statutory benefits: what social security actually pays

Employees registered under Section 33 receive eight categories of protection. Employees often ask HR about these, so it helps to know the headline numbers. Amounts reflect the January 2026 reform, which lifted several caps in line with the new wage ceiling.

• Healthcare: free treatment for non-work illness or injury at the employee’s registered hospital, plus dental cover of up to THB 900 per year. Eligibility requires 3 months of contributions in the prior 15.

• Sickness cash benefit: 50% of capped wages (now up to THB 8,750 per month) for extended unpaid sick absence, up to 90 days per episode and 180 days per year.

• Maternity: a THB 15,000 lump-sum childbirth grant per delivery, plus a cash benefit of 50% of capped wages for 90 days (now up to THB 26,250 in total). Fathers registered with the SSO can claim the childbirth grant where the mother is not insured.

• Child allowance: THB 800 per month per child under age 6, for up to 3 children. An increase to THB 1,000 has been approved in principle but was not yet in force at the time of writing.

• Disability: income replacement of 30% to 50% of capped wages depending on severity, for life in severe cases, plus medical and rehabilitation cover.

• Unemployment: 50% of capped wages for up to 180 days if dismissed, or 30% for up to 90 days on resignation or contract expiry. The employee must register with the employment office within 30 days of leaving to preserve the full entitlement.

• Old-age pension: payable from age 55 after 180 months of contributions, at 20% of the average wage over the final 60 months, plus 1.5% for each additional 12 months of contributions. Shorter contribution histories are settled as a lump sum. The minimum pension for a 15-year contributor rose to THB 3,500 per month in January 2026.

• Death: a funeral grant of THB 50,000 plus a survivor lump sum based on contribution history (now up to THB 105,000).

The EWF adds a further lump-sum payout when employment ends (through resignation, termination, retirement, or death) once it launches in October 2026.

Common supplementary benefits

To compete for professional talent, most international employers offer benefits above the statutory floor:

• Provident fund: a voluntary, tax-advantaged retirement savings plan. Employer and employee each contribute 2% to 15% of salary. A registered provident fund can also exempt you from the EWF.

• Private health insurance: group medical cover is a near-universal expectation for office roles, often extended to dependents at senior levels.

• Annual bonus: discretionary, commonly 1 to 2 months of salary in profitable years. Not legally required.

• Allowances: transport, meal, phone, and cost-of-living allowances are common. Be careful: fixed, regularly paid allowances can count as “wages” for severance and overtime calculations.

‍

Termination Requirements

Termination is the highest-risk area of Thai employment law. Plan every exit carefully.

Notice

Thailand ties notice to the wage cycle rather than a fixed number of days. Written notice must be given at or before a wage payment date, taking effect on the following wage payment date. For monthly payroll, that means roughly one month’s notice in practice.  

Notice is not required to exceed 3 months even if pay periods are longer. You can pay in lieu of notice for an immediate exit. Contracts can set longer notice, and the longer of the two applies.

Worked example: your payroll runs on the 26th of each month. To end employment on February 26, you must serve written notice on or before January 26. Miss that date, and the termination cannot take effect until March 26, or you pay wages in lieu for the gap.

Statutory severance pay

Severance is owed on any termination without statutory cause, including redundancy, end of a non-qualifying fixed term, and retirement. It is calculated on the employee’s last wage rate, including fixed regular allowances.

‍

Severance is exempt from personal income tax up to THB 600,000 (subject to conditions), with the excess taxed under special rules.

Termination without severance (statutory cause)

Section 119 of the LPA lets you dismiss without severance only for serious misconduct, such as:

• Dishonesty or an intentional criminal act against the employer

• Intentionally causing the employer damage

• Gross negligence causing serious damage

• Violation of lawful work rules after a prior written warning (or without warning in serious cases)

• Absence for 3 consecutive working days without reasonable cause

• Imprisonment under a final court judgment

The specific ground must be stated in the termination letter. Grounds not cited at the time of dismissal generally cannot be raised later.

Unfair dismissal

Even a procedurally correct termination can be challenged as unfair dismissal in the Labour Court if there was no reasonable and justifiable ground. Courts can order reinstatement or additional damages on top of severance. Document performance issues, give warnings, and keep records.

Other key rules

• Retirement: retirement at the agreed age, or at 60 if none is agreed, counts as termination and triggers full severance.

• Final payments: outstanding wages, severance, pay in lieu of notice, and accrued unused annual leave must be settled promptly; wages and overtime within 3 days of termination.

• Special severance: additional rules apply to workplace relocation and to redundancies caused by new machinery or technology, where long-serving employees can claim extra compensation.

• Protected employees: pregnant employees, employee committee members, and union representatives enjoy extra protection. Terminating an employee committee member requires Labour Court permission.

‍

Hiring Through an Employer of Record (EOR)

To hire employees directly in Thailand, you need a registered local entity, plus registrations with the Revenue Department and the Social Security Office. Foreign ownership adds another layer: the Foreign Business Act restricts many activities, and hiring foreign nationals brings capital and Thai-staff ratio requirements. Entity setup typically takes several weeks to a few months.

An Employer of Record is the alternative. The EOR is the legal employer in Thailand on your behalf. It signs a compliant Thai employment contract, runs payroll, withholds and files taxes, manages SSF, WCF, and EWF contributions, and administers statutory leave and severance. You direct the employee’s day-to-day work.

When an EOR makes sense

• You want to hire in Thailand within days or weeks, not months

• You are testing the market before committing to an entity

• You are hiring a small team where entity costs are hard to justify

• You need someone to own fast-moving compliance changes, such as the 2026 SSF ceiling rise and the EWF launch

When to consider your own entity

• You plan a large, long-term Thai operation

• Your business requires local licenses or invoicing in Thailand

• You want to sponsor many foreign-national visas directly

Many companies start with an EOR like Knit and migrate employees to their own entity once headcount justifies it. Knit supports both models, including EOR hiring in Thailand and payroll support if you later establish your own entity.  

Hiring Foreign Nationals in Thailand

Foreign employees need two things: a Non-Immigrant B visa (or another qualifying visa) and a work permit. Working without a permit carries penalties for both employee and employer.

• Sponsor requirements: as a general rule, the sponsoring company needs THB 2 million in registered capital and 4 Thai employees per foreign hire. BOI-promoted companies enjoy relaxed ratios and a faster digital process.

• Minimum income guidelines: immigration authorities apply monthly income thresholds for visa extensions that vary by nationality, commonly cited between THB 25,000 and THB 50,000 (for example, THB 50,000 for nationals of most Western countries and Japan). Verify the current schedule for your candidate’s nationality before making an offer.

• Special visa routes: the LTR (Long-Term Resident) visa and SMART visa offer work authorization with reduced bureaucracy for highly skilled professionals, executives, and investors in targeted industries, including a flat 17% PIT rate for qualifying LTR professionals.

• Application practicalities: the employer files form WP3 with the Department of Employment to support the visa, and the candidate applies through Thailand’s e-Visa system with proof of funds (THB 20,000 per person, THB 40,000 per family). Budget up to 8 weeks for processing; there is no expedited track. The initial Non-B visa allows a 90-day stay, extendable to 1 year once the work permit is issued, and both are renewed together annually.

• Dependents: a spouse, parents, and unmarried children under 20 can apply for Non-Immigrant O visas tied to the employee’s status.

• Ongoing obligations: foreign employees must complete 90-day address reporting, and permits and visas must be renewed on time. Social security registration applies to foreign employees on the same basis as Thai staff.

Immigration rules and income thresholds change frequently and are applied with local discretion. Confirm current requirements with the Immigration Bureau, the Department of Employment, or qualified local counsel before relying on them.

‍

Frequently Asked Questions

Do I need a local entity to hire in Thailand?

Yes, unless you use an Employer of Record. Direct employment requires a registered Thai entity with tax and social security registrations.

What changed for payroll in 2026?

Two things. From January 1, 2026, the social security wage ceiling rose to THB 17,500 per month, lifting the maximum SSF contribution to THB 875 each for employer and employee. From October 1, 2026, employers with 10 or more employees must contribute to the new Employee Welfare Fund at 0.25% of wages, matched by employees, unless exempt through a qualifying provident fund.

Is a 13th-month salary mandatory?

No. Annual bonuses are common but discretionary unless promised in the contract or established by consistent practice.

How much notice do I need to give to terminate?

Written notice given at or before a wage payment date, effective the next wage payment date. For monthly payroll this is roughly one month. You can pay in lieu of notice.

When is severance not payable?

Only for service under 120 days, genuine qualifying fixed-term contracts, or dismissal for serious misconduct under Section 119 of the LPA, with the ground stated in the termination letter.

Can I put an employee on a 6-month probation?

You can, but it will not help you avoid severance. Severance rights vest at 120 days of service regardless of what the contract calls the period. That is why Thai probation periods are almost always 119 days or less.

Do foreign employees pay Thai social security?

Yes. Foreign employees working legally in Thailand are enrolled in the SSF on the same terms as Thai employees.

What is the standard work week?

Up to 8 hours per day and 48 hours per week, with overtime capped at 36 hours per week. Professional employers typically run 40-hour weeks.

Can I engage someone in Thailand as an independent contractor instead?

Only if the relationship is genuinely independent. Engaging a full-time, exclusively dedicated worker as a contractor risks misclassification. If authorities reclassify the relationship, you face back taxes with penalties and interest, unpaid social security contributions, retroactive statutory benefits, and potential severance exposure.

‍

Have more questions about hiring in Thailand? Ask Knit.

‍

Summary

Thailand rewards employers who get the details right. The fundamentals are straightforward: written bilingual contracts, provincial minimum wage awareness, monthly tax withholding, and social security registration. The pressure points are severance, termination procedure, and the wave of 2026 changes, especially the higher SSF ceiling already in force and the Employee Welfare Fund arriving on October 1, 2026.

If you are hiring your first employees in Thailand, decide early between entity setup and an EOR, budget for statutory employer costs of roughly 5.5% to 6.5% on top of gross salary, and build severance liability into your workforce planning from day one. For complex cases, such as foreign-national sponsorship, restructurings, or disputes, engage qualified Thai counsel. Employment figures in this guide reflect the law as of August 2026; always verify current rates before running payroll.

‍