ThailandFind out what you need to know about employment laws, regulations, and Employer of Record (EOR) in Thailand.
Looking to hire in Thailand? An EOR can help
If you want to hire in Thailand, an Employer of Record (EOR) service can be invaluable in enabling you to recruit, onboard, and manage employees without the need to set up your own legal entity in the country.
An EOR acts as the official employer for your staff in Thailand taking care of local recruitment, payroll processing, benefits management, and tax compliance—all in line with Thai employment regulations. You’ll retain control over your business operations and employees’ day-to-day activities.
By utilizing an EOR to simplify and automate global employee management, you can sidestep the intricacies of international labor laws and focus on your core business objectives.
How to hire in Thailand
Step 1: Set up an entity or use an EOR
When hiring in Thailand, you can either set up your own business entity or utilize an EOR service.
Establishing a local entity offers greater control over your operations in the long term, but it is often time-consuming, expensive, and complex. You’ll have to register your business with the Thai government, appoint directors, and navigate intricate tax regulations.
The procedure can take several weeks or even months which can delay your hiring plans in Thailand. Additionally, creating an entity means you will be directly responsible for compliance with all local employment laws and regulations.
Using an EOR allows you to bypass the complexities associated with Thai employment laws. You can quickly onboard new talent and automate essential HR functions.
Generally, if you plan to hire a significant number of employees and aim to establish a strong presence in the region, setting up a local entity might be the better option. However, if you prefer a quicker and simpler way to hire in Thailand, an EOR is the better solution.
Step 2: Finding the right EOR
Selecting the wrong EOR can result in compliance issues, unnecessary costs, and a poor experience for your new hires. Here’s what to look for:
- Legal compliance: Ensure the EOR has extensive knowledge of Thailand’s labor laws, employee protections, tax regulations, and benefits. Check their track record and ask about their experience with industry-specific scenarios.
- Customer service: Assess their level of continuous support. For instance, Multiplier provides 24/7 personalized support (no automated systems) and assigns dedicated managers to each account.
- Transparent pricing: Be wary of EOR services with low initial costs but hidden fees or complex pricing structures. Clarify all associated costs upfront before making your decision.
- Total cost of ownership: Sometimes opting for the lowest price isn’t the best strategy, as cheaper solutions can end up costing more if they are ineffective. When selecting an EOR, make sure you are investing in a quality service that fits your budget without compromising on essential features.
Step 3: Employing and onboarding in Thailand
Send over the contract
After identifying the ideal candidate and the right EOR, you’ll need to send a locally compliant employment contract. Multiplier can draft contracts that adhere to Thai law in under five minutes. You can tailor the terms of employment, including job responsibilities, working hours, remuneration, and termination conditions. Then, once the contract is ready, Multiplier will securely send it and obtain the necessary signatures.
Support compensation with competitive benefits
Looking to offer an attractive benefits package? Save time by using a locally managed package through an EOR rather than dealing with dozens of vendors yourself. An EOR can also ensure employees receive the IT equipment they need to start working.
Get all your documents in order
You’ll need to collect the new hire’s tax and banking information. If you’re using an EOR like Multiplier, this data will be automatically gathered to set up payroll. Multiplier will handle all required documentation directly, ensuring a smooth process without the hassle of paperwork.
Onboarding employees in Thailand might seem challenging, but an EOR can make the process straightforward and stress-free.
Step 4: Run payroll for employees based in Thailand
Managing payroll for employees based in Thailand requires careful attention to local tax rates and mandatory contributions. Thailand has a progressive income tax system with rates ranging from 0% to 35%, depending on income levels.
Employers are also responsible for two mandatory contributions: the Social Security Fund (SSF) and the Workmen’s Compensation Fund (WCF).
The SSF is Thailand’s public social security system, designed to provide various benefits to employees, including retirement, unemployment, and healthcare benefits. Employers must contribute a set percentage of an employee’s salary to their SSF account, ensuring employees are financially prepared for retirement and other needs.
The WCF provides compensation for work-related injuries and illnesses. Employers are required to contribute to this fund, which helps cover medical expenses and lost wages for employees who suffer from work-related incidents.
Using an EOR like Multiplier simplifies this process by managing accurate and timely salary payments while handling all local taxes, contributions, and withholdings. With Multiplier’s global payroll solution, you can manage payroll for all your international employees from a single platform, avoiding the need to coordinate with multiple local providers.
Employment laws and regulations in Thailand
Thailand’s employment laws are designed to protect employee rights while providing a framework for fair labor practices. Key aspects include:
- Employment contracts: Employers can use both fixed-term and indefinite-term contracts. While written contracts are not mandatory, they are advisable to prevent legal disputes. These contracts should clearly outline job responsibilities, salary, working hours, and termination conditions.
Working hours and overtime pay: The standard working hours are set at 48 hours per week, with overtime compensation required for additional hours worked. Employees are entitled to at least one hour of rest after five consecutive hours of work. - Minimum wage: Thailand’s minimum wage varies by region, currently ranging from 330 baht to 370. The current minimum wage rates are expected to be reviewed and potentially adjusted again.
- Social Security Fund: Employers must contribute to the Social Security Fund, which covers medical care, disability, and unemployment benefits. Both employers and employees contribute 5% or other set percentages of their monthly salaries.
Employ top talent in Thailand through an EOR
Onboard, pay, and manage all your international employees
Employee benefits and compensation
Thai labor laws stipulate several standard staff benefits, including:
- Annual leave: After one year of service, employees are entitled to at least six days of paid annual leave, which may increase with longer tenure.
- Sick leave: Employees are entitled to up to 30 days of paid sick leave per year. Employers are required to pay wages for these sick days as long as the employee provides a medical certificate for absences longer than three days.
- Parental leave: Thailand offers 98 days of maternity leave, with 45 days paid by the employer. Up to 15 days of paternity leave are also available, though it is generally unpaid.
Employers often enhance these statutory benefits with additional perks to attract and retain top talent. Explore Multiplier’s Global Benefits Administration to provide locally compliant and competitive benefits to your international employees.
Termination and offboarding procedures
When terminating employment in Thailand, employers must navigate regulations concerning notice periods and severance pay. The standard notice period is generally 30 days, although it can vary based on the terms of the employment contract.
Severance pay is mandated by Thai law and is typically calculated based on the employee’s length of service. The severance pay structure is as follows:
- 30 days’ wages for 120 days to less than 1 year of service
- 90 days’ wages for 1 to less than 3 years of service
- 180 days’ wages for 3 to less than 6 years of service
- 240 days’ wages for 6 to less than 10 years of service
- 300 days’ wages for 10 years or more of service
Specific procedures apply in cases of redundancy, such as during company restructuring or economic downturns. Employers may opt to provide notice pay instead of requiring the employee to work through the notice period, but this must be specified in the employment contract.
These processes can be complex and time-consuming, especially for international employers unfamiliar with Thailand’s labor laws. An EOR, such as Multiplier, can significantly simplify this process.
By managing the offboarding procedures, an EOR ensures that all termination activities comply with local regulations and provide a seamless transition for both the employer and the departing employee.
Visa and work permit assistance
Hiring foreign workers in Thailand requires securing the appropriate visas. The type depends on factors such as the nature of the job, the duration of employment, and the nationality of the employee. Here are the main visa categories for working professionals:
- Non-Immigrant B Visa (Business Visa): This visa is suitable for foreign nationals entering Thailand for business purposes, including employment. It is commonly used for skilled workers in specialized fields such as engineering, technology, and management.
- Non-Immigrant IB Visa (Investment and Business Visa): Designed for investors or high-level managers in companies operating in Thailand, this visa facilitates activities related to investment and business operations.
- Non-Immigrant BOI Visa: This visa is specifically for employees of companies promoted by the Board of Investment (BOI) in Thailand. It is suitable for specialized professionals in sectors that the Thai government aims to promote.
- Non-Immigrant O Visa (Dependent/Family Visa): This visa is for family members of foreigners working in Thailand. It allows dependents to stay in the country while the primary visa holder is employed.
- Non-Immigrant ED Visa: For those who wish to study or undergo training in Thailand, this visa allows individuals to stay in the country for educational purposes. While not specifically for employment, it can lead to work opportunities post-study.
Alongside the appropriate visa, foreign workers must obtain a
to legally work in Thailand. To get a work permit, candidates must submit various documents, including the employment contract, a medical certificate, and proof of the employer’s business registration.
Given the complexities of visa applications and renewals, seeking expert assistance is highly recommended. Multiplier offers comprehensive work permit and visa support as part of its Employer of Record (EOR) services. For more information on how we handle global immigration challenges, please visit our Global Immigration page.
Get started with Multiplier’s EOR services
Multiplier’s Employer of Record (EOR) services provide a robust solution for expanding your workforce in Thailand. With Multiplier, you can hire employees without the need to establish a local entity, streamline all HR functions, and ensure an exceptional employee experience.
Our EOR services facilitate a seamless hiring, onboarding, and management process. We handle all aspects of employment, including drafting locally compliant contracts, managing payroll and taxes, and offering a variety of customizable benefits that align with Thai standards. This eliminates compliance challenges and administrative burdens.
Schedule a demo to discover how Multiplier can simplify HR and ensure compliance in Thailand.
