Table of Contents
We’re here to help you on your journey to hire, manage and pay.
Employee Benefits and Deductions
In addition to salary and tax obligations, employers in Thailand must provide statutory benefits to employees. These include paid leave, health insurance, and social security contributions, all of which must be accounted for in payroll calculations.
Statutory Leave Entitlements
Thai labor law provides employees with a range of leave entitlements. Employees are entitled to at least six days of paid annual leave per year after completing one year of service. In addition, they are entitled to 30 days of paid sick leave per year, although employers may require a medical certificate for absences of three consecutive days or more.
Female employees are entitled to 98 days of paid maternity leave, with the employer covering 45 days and the remaining 45 days covered by social security. Employers must ensure that leave entitlements are correctly calculated and paid in compliance with labor laws.
Mandatory Health Insurance and Deductions
In Thailand, employees are entitled to public healthcare coverage through their social security contributions. While social security covers basic medical needs, many employers offer additional private health insurance to attract and retain employees. Although not required by law, offering private health insurance can be a valuable benefit for employees.
Employers must also account for other deductions in their payroll systems, including loans, union dues, or other voluntary deductions that may be agreed upon between the employer and employee.
When Non-Compliance May Occur
Failure to comply with payroll regulations in Thailand can lead to serious legal and financial consequences for businesses. Below are common areas where non-compliance may occur and how to avoid them:
Late Salary Payments
Thai labor law mandates that employers pay their employees on time as per the agreed-upon payroll schedule. Delays in salary payments can result in fines, legal disputes, and employee dissatisfaction. Businesses should ensure that their payroll systems are capable of processing payments promptly and accurately.
Missed Social Security Contributions
Employers who miss the deadline for social security contributions may face penalties, including interest charges and fines. It is essential to ensure that contributions are calculated correctly and submitted to the SSO by the required deadline.
Incorrect Tax Reporting
Misreporting or failing to withhold the correct amount of income tax can lead to audits, penalties, and back taxes owed to the Revenue Department. Employers must ensure that they understand the applicable tax rates and apply them correctly when calculating employee payroll.
Non-Compliance with Benefits
Employers who fail to provide statutory benefits, such as paid leave or health insurance, can face employee grievances and legal action. To avoid this, businesses must familiarize themselves with Thailand’s labor laws and ensure that all statutory benefits are provided.
How AYP Can Help
Managing payroll in Thailand requires a deep understanding of local regulations, including salary payments, social security contributions, and tax withholding. AYP offers comprehensive payroll solutions to help businesses navigate these challenges and ensure compliance.
Professional Employer Organisation (PEO) Services
AYP’s PEO services allow businesses to outsource their payroll management, ensuring compliance with Thai labor laws. We handle everything from salary calculations to social security contributions, ensuring that your payroll processes are accurate and compliant.
Employer of Record (EOR) Services
As an Employer of Record, AYP assumes full responsibility for your workforce in Thailand. We manage payroll, statutory benefits, tax reporting, and compliance on your behalf, allowing you to focus on your business operations.
Payroll Outsourcing Management (POM) Services
AYP’s Payroll Outsourcing Management (POM) services offer end-to-end payroll solutions, including salary payments, social security contributions, and tax filing. By outsourcing your payroll to AYP, you can reduce the risk of non-compliance and ensure that your payroll is processed efficiently and accurately.
With AYP’s payroll services, businesses can focus on growth while ensuring compliance with Thailand’s labor laws and payroll regulations.
