Running payroll in Thailand isn’t just about paying salaries on time—it’s about staying compliant with labour laws that protect employees and regulate employer responsibilities. For businesses operating in Thailand, particularly those with expanding teams or foreign management, understanding these laws is essential to avoid penalties and maintain trust with your workforce.
In this guide, we highlight the key Thai labour laws that directly impact payroll and explain how outsourcing payroll services can help businesses stay compliant.
📌 1. The Thailand Labour Protection Act (LPA), Thai Labour Laws
The Labour Protection Act B.E. 2541 (1998) is the core legislation governing employment in Thailand. It regulates:
- Minimum wage
- Overtime and holiday pay
- Working hours and rest periods
- Severance pay and termination rules
- Leave entitlements (e.g. annual leave, sick leave, maternity leave)
💡 Payroll Impact: Employers must calculate pay based on these rules. For example, failing to pay proper overtime or unused leave can result in fines or lawsuits. Payroll providers ensure that the LPA calculates all wage elements.
💰 2. Minimum Wage Regulations
Thailand’s minimum wage varies by province. As of 2024, daily minimum wages range from THB 330–370 depending on location.
💡 Payroll Impact: Employers must stay updated and adjust salaries whenever the minimum wage changes. Outsourcing providers can automate this update across your payroll system.
🧾 3. Social Security Act
Under the Social Security Act B.E. 2533 (1990), employers are required to register their employees and make monthly contributions to the Social Security Fund (SSF). Both employer and employee contribute 5% of the employee’s salary (capped at THB 750 per month).
💡 Payroll Impact: Payroll systems must correctly deduct and match contributions, submit filings, and transfer payments to the SSF by the 15th of each month.
🏥 4. Workmen’s Compensation Act
Employers are required to contribute annually to the Workmen’s Compensation Fund, which supports employees injured on the job.
💡 Payroll Impact: Contributions are based on salary levels and risk category. Payroll teams must classify workers correctly and submit data to the Department of Labour.
🧮 5. Personal Income Tax (PIT) Withholding
Employers must withhold personal income tax (PND.1 form) from employees’ monthly wages and submit it to the Revenue Department.
- Monthly filing: By the 7th (paper) or 15th (electronic) of the following month
- Annual filing: PND.1 Kor and withholding summary report (Form 50 bis) due by the end of February
💡 Payroll Impact: Miscalculating or failing to withhold PIT can result in fines. Outsourced providers ensure that proper tax brackets and exemptions are applied.
🏦 6. Provident Fund (Voluntary but Regulated)
A Provident Fund is a voluntary savings program co-contributed to by employers and employees. If your company has set up one, its management must follow specific rules on:
- Contribution percentages
- Vesting periods
- Fund registration with the SEC
💡 Payroll Impact: Deductions must align with fund policy and be reported accurately in monthly payroll runs.
📅 7. Thailand’s New Employee Welfare Fund (Effective October 2025)
The Employee Welfare Fund will become mandatory as of October 1, 2025. Employers must contribute to workers who are not covered by other funds (e.g., Provident Fund).
- Covers welfare for termination, unemployment, or disability
- Contributions: Both employee and employer contribute 0.25% of the employee’s salary from 1 October 2025, and will increase to 0.5% each from October 2030 onward
- Applies to companies with 10+ employees
💡 Payroll Impact: Employers must adjust payroll systems to track eligibility, deduct contributions, and stay compliant with new filing requirements.
📑 8. Employment Contracts and Payslips
Thai law requires that employees be informed of the wage structure and receive payslips with every payment. While written contracts are not mandatory for all workers, they are strongly recommended to define wage terms.
💡 Payroll Impact: Payroll providers generate compliant payslips and ensure legal documentation of salaries and deductions.
⚠️ What Happens if You Don’t Comply?
Violations of labour law can result in:
- Fines (THB 5,000–400,000 depending on the offence)
- Back payments for underpaid wages or benefits
- Legal claims by employees
- Reputation damage and audits
🤝 How AO Accounting & Advisory Can Help
At AO Accounting & Advisory, we take payroll compliance off your shoulders. Our team of payroll experts and legal advisors ensures that:
- Tax and SSF filings are submitted on time
- All calculations are aligned with current laws
- You are ready for upcoming changes like the Welfare Fund
- Employee records and payslips are fully compliant and auditable
📌 Key Takeaways
| Labour Law Area | Payroll Relevance |
| Labour Protection Act | Overtime, leave, termination pay |
| Minimum Wage | Provincial rate compliance |
| Social Security Act | Monthly contributions, registration |
| Workmen’s Compensation Fund | Annual risk-based contributions |
| PIT Withholding | Monthly and annual income tax filings |
| Provident Fund | Optional, regulated, must follow fund rules |
| Employee Welfare Fund 2025 | New mandatory employer contribution |
| Payslip/Contract Rules | Legal documentation and wage transparency |
FAQs Regarding Payroll Services and Thai Labour Laws
Q: What are the key employer obligations under Thailand’s labour laws?
A: Employers in Thailand must adhere to various laws in Thailand, including the Labour Relations Act and Thailand’s Labour Protection Act. They are responsible for providing fair wages, ensuring safe working conditions, and complying with regulations regarding working hours and termination of employment.
Q: How many working hours are employees in Thailand allowed per week?
A: According to Thailand’s labour laws, the standard working hours are capped at 48 hours a week, typically divided into 8 hours per day, 5 days a week.
Q: What constitutes valid grounds for termination of employment in Thailand?
A: An employer may terminate the employment of an employee for various reasons, including misconduct, redundancy, or failure to perform job duties effectively. However, valid grounds must align with provisions of Thailand’s labour laws to avoid legal issues.
Q: What are the regulations regarding overtime pay in Thailand?
A: Employers must pay overtime compensation for hours worked beyond the standard 48 hours per week or 8 hours per day. Overtime pay is typically calculated at a rate of 1.5 times the employee’s hourly wage.
Q: What is the process for terminating an employee’s employment in Thailand?
A: To terminate employment, employers must provide a valid reason, notify the employee, and adhere to the notice period as outlined in the employment contract and Thailand’s labour protection act. Failure to do so may lead to disputes in the labour court.
Q: Are there special considerations for foreign workers in Thailand?
A: Yes, laws in Thailand for foreigners include specific requirements regarding work permits and compliance with the Ministry of Labour regulations. Employers must ensure that foreign workers possess valid work permits and adhere to labor standards applicable to foreign workers in Thailand.
Q: What payroll taxes must employers in Thailand pay?
A: Employers must pay several payroll taxes, including contributions to the social security system, which provides benefits for employees in Thailand. The Thai government and the Ministry of Labour regulate the rates and contributions.
Q: How do minimum wages in Thailand affect payroll calculations?
A: Minimum wages in Thailand range significantly depending on the region and are essential for employers to consider when calculating wages in Thailand. As of 2023, employers must pay at least the minimum wage to all employees, which varies from province to province.
Q: What is the role of the labour court in employment disputes?
A: The labour court in Thailand plays a crucial role in resolving disputes between employers and employees. It handles cases related to wrongful termination, unpaid wages, and violations of labour laws in Thailand, ensuring fair treatment under the law.
Q: What should employers know about their rights and obligations regarding termination?
A: Employers must understand their rights to terminate employment under specific circumstances while also adhering to legal requirements to avoid potential conflicts. This includes following the correct procedures as outlined in Thailand’s Labour Protection Act and being aware of employees’ rights during the termination process.