Engage In Thailand

Table of Contents

About Thailand

Capital City

Bangkok

Population

As of March 2024, the estimated population of Thailand is 71,801,279 people.

Currency

The currency in Thailand is the Thai Baht (THB). The currency symbol is ฿.

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Overview

Thailand, a vibrant country in the center of mainland Southeast Asia, offers a captivating blend of ancient traditions and modern developments. With a land area of approximately 514,000 square kilometers, this diverse nation boasts a stunning coastline along the Gulf of Thailand and the Andaman Sea, encompassing numerous islands that dot the pristine waters. The heart of Thailand lies in its bustling capital, Bangkok, a metropolis known for its rich cultural heritage, bustling markets, and majestic temples. Home to a multi-ethnic population of around 64.1 million, Thailand showcases a unique fusion of traditions, languages, and cuisines. Thai, the national and official language, adds to the cultural tapestry, while English is widely spoken and understood. The tropical climate of Thailand provides three distinct seasons, allowing visitors to enjoy the country’s natural wonders, be it the lush forests of the north, the fertile plains in the central region, or the picturesque coastlines in the south. As a constitutional monarchy, Thailand has a rich history, having never been colonized by European powers. Today, it embraces parliamentary democracy, although the military has played a significant role throughout its political landscape. With its captivating landscapes, warm hospitality, and cultural treasures, Thailand is an intriguing destination for travelers seeking a unique and enriching experience.

Employment Relationship

Permanent Employment

Thailand's labor law does not define what it means to be a permanent employee. However, employers are not permitted to hire employees on a fixed-term contract for tasks of a permanent nature. Employment contracts are typically established for a  fixed period that is mutually agreed upon and expire upon completion of said employment period. If a contract does not specify a termination date, it is considered to be of an indefinite period.  Where the period is not specified in the contract of employment, an employer or an employee may terminate the contract by giving advance notice in writing to the other party at or before any due date of wage payment in order to take effect on the following due date of wage payment. The advance notice need not be longer than three months. In addition, a probationary employment contract is deemed to be an indefinite contract of employment for notice purposes.

Fixed-Term or Specific-Purpose Contracts

In Thailand, employment under a fixed-term contract is allowed in the following circumstances: the employment occurs either for a specific project that is not part of the normal business or trade activities of the employer and requires a fixed start and end date, the work is occasional and has a definite end date, or the work is seasonal, and the employment occurs during the work season in question. Work under a fixed-term contract must be completed within a period not exceeding 2 years. The employer must sign a contract with the employee at the beginning of the employment period. If a contract of employment reaches its expiry date, and the employee continues working without objection from their employer, this shall be taken as confirmation that a new employment contract has been established.

Temporary Employment Contratcs

The Labour Protection Act of Thailand does not directly address the issue of temporary work agency employment. However, it does state that companies who hire an individual (and not an employment agency) to recruit other individuals for work, and the work is part of a manufacturing process or business operations under the company's responsibility, then the company will be deemed as the employer of those workers. If the recruited workers perform work in the same manner as employees under a regular employment contract, the workers must receive the same benefits as the employees under contract.  

Probationary Period

Thailand's employment law does not mandate a probationary period.  In practice, an employee becomes eligible for severance pay after working for 120 days, so many businesses consider the maximum probationary period to be 119 days.  The only reference to a probationary period in Thailand's Labour Protection Act is a provision that states that "a probationary contract shall also be deemed as an indefinite period contract of employment." However, this does not mean that a probationary employee is given the same employment protections as a regular, permanent employee.

Working Hours

Thailand's labor law states that a normal working day lasts 8 hours and cannot exceed 9 hours. The total normal working hours per week cannot exceed 42 hours. In instances where the employer and employee have arranged overtime work, the additional work cannot exceed 9 hours daily and 48 hours weekly.

Holidays / PTO

Statutory Holidays

1 January: New Year’s Day; Full moon, 3rd Thai lunar month (February): Magha Puja; 6 April: Chakri Memorial Day; 13–15 April: Songkran Festival; 5 May: Coronation Day; May arbitrary date: Royal Ploughing Ceremony and Farmer’s Day; Full moon, 6th Thai lunar month (May): Vesak; Full moon, 8th Thai lunar month (July): Asalha Puja; First waning moon, 8th Thai lunar month (July): Beginning of Vassa; 12 August: The Queen Sirikit’s Birthday; 23 October: King Chulalongkorn Day; 5 December: King Bhumibol Adulyadej’s Birthday Anniversary; 10 December; Constitution Day; 31 December: New Year’s Eve.

Paid Annual Leave

Thailand's labor law provides that an employee is entitled to annual leave of at least 6 days after working for an uninterrupted period of 1 year with the same employer. Employees are paid at their normal wage rate for the duration of annual leave. The employer must fix the days of leave in advance for the employee or conclude an agreement with the employee regarding the days of leave. The employer and the employee may agree in advance to accumulate any annual leave that has not yet been taken in a year and postpone it to following years. The employer can choose to provide annual leave on a pro-rata basis for employees who have not completed 1 year of service. If employees' contract is terminated by the employer before, they must be paid for the unused annual leave for the year.    

Sick Leave

Under Thailand's employment law, employees are entitled to 30 days of sick leave per year. An employee can take up to 2 consecutive days of sick leave without explanation. If the sick leave period is 3 days or more, the employer can require that the employee produce a certificate from a physician or medical establishment. The law states that employees who do not provide a certificate must give an explanation to the employer. During an employee's sick leave, the employer must remunerate the employee at their regular pay rate. Employees must be remunerated in the same method as they normally would when working. Employees are entitled to paid sick leave beyond 3 days if they provide a medical certificate.

Maternity Leave

In Thailand, pregnant employees are entitled to maternity leave of no more than 98 days for each pregnancy. Any maternity leave taken includes holidays that occur during the period of leave. Employers are obligated to pay normal wages to a female employee during the first 45 days of the maternity leave period. An employer is prohibited from requiring a pregnant employee to work between 10:00 PM and 6:00 AM, to work overtime, or to work on holidays. If a pregnant employee works in an executive position, in academic work, in clerical work, or in work relating to finance or accounting, the employer may require the employee to work overtime provided that there is no effect on the employee's health and the employee gives prior consent on each occasion.

Paternity Leave

Thailand's labor law does not contain any provision regarding paternity leave in the private sector. Government sector employees may receive paid paternity leave of up to 15 consecutive working days, to be taken within 90 days after birth. Any paternity leave that an employer wishes to grant to an employee is arranged through private negotiations. There is no government-mandated paternity leave provision.

Termination of Employment

Notice Period

The labor law of Thailand states that where a date of termination is provided in the employment contract, the employer need not give advance notice of dismissal. Where no period of time is specified in the contract of employment, the employer or the employee may terminate the employment contract by providing advance notice in writing to the other party on or before the due date of wage payment for the termination to take effect on the following due date of wage payment. For example, for employees paid on the 5th of each month, notice on or before April 5th is required for termination to be effective on May 5. The advance notice need not be longer than 3 months. In addition, a probationary employment contract is deemed to be an indefinite contract of employment for notice purposes. An employer is permitted to pay the wages due to the employee during the notice period and immediately dismiss the employee.

Severance Benefits

Thailand's labor law mandates the payment of severance benefits to dismissed employees as follows: If the employee has continuously been employed with the employer for more than 120 days, but less than 1 year, they will be entitled to a payment equal to 30 days of wages. If the employee has continuously been employed with the employer for more than 1 year but less than 3 years, they will be entitled to a payment equal to 90 days of wages. If the employee has continuously been employed with the employer for more than 3 years, but less than 6 years, they will be entitled to a payment equal to 180 days of wages. If the employee has continuously been employed with the employer for more than 6 years, but less than ten years, they will be entitled to a payment equal to 240 days of wages. If the employee has continuously been employed with the employer for 10 or more years, they will be entitled to a payment equal to 300 days of wages.

Social Security

Pension

In Thailand, the Social Security Fund provides retirement benefits to insured employees at the age of 55 years if they have paid at least 180 months' contributions. Employees may choose to receive the benefits in the form of monthly pensions or lump-sum superannuation gratuity. The monthly pension is calculated as 20% of the average monthly salary in the last 60 months before retirement, plus 1.5% per year of contributions beyond 180 months. Insured persons who have paid less than 180 contributions are eligible to receive all the contributions paid in a lump sum.  Contributions are made by both employees and employers.  

Dependents/Survivors Benefit

The Social Security Fund of Thailand provides benefits to survivors in case of death of an insured person that is not caused by a work-related accident or disease, provided that the deceased had paid contributions for at least 1 month during the 6 months before their death. Survivors of the deceased employee may include their spouse, children, or parents. The following benefits are paid to survivors: Funeral expenses up to THB 50,000 (Thai baht)  Survivors benefits equivalent to 2 months' of the employee's wages if they had paid contributions for 36 months to less than 120 months or 6 months' wages if they had paid contributions for more than 120 months In case of death that is due to a work-related accident or disease, employers are also obligated to pay monthly pensions to survivors. In this case, the pension paid is 70% of the employee's monthly wages for up to ten years.

Invalidity Benefit

The Social Security Fund of Thailand provides life and disability benefits to the insured persons who have paid contributions for at least three months in the 15 months before the onset of disability, provided that the reasons for disability are not work-related. The disability benefits consist of medical expenses, rehabilitation expenses, transportation expenses, and pension.  The benefits received in case of permanent disability are equal to 50% of the wages received by the employee, for a lifetime. For other disabilities, the amount of pension depends on the degree of disability and loss of earnings. In case of disability caused by a work-related accident or disease, employees are entitled to a pension. For a temporary disability, 70% of the monthly wages of the employee is paid for up to one year. For permanent disability, 70% of the monthly wages of the employee is paid for a lifetime.

Taxation of Compensation and Benefits

Personal Income Tax

In Thailand, a resident is defined as an individual who has resided in the country for a continuous period or periods aggregating to 180 days or more in any tax year. A resident is liable to pay tax on all their global income, while non-residents are only subject to taxation on income from sources in Thailand. The tax year is the same as the calendar year and runs from January 1 through December 31. The rates in Thailand's progressive income tax system range from 0% – 35%.

Immigration

Types of Visas

Thailand's Ministry of the Interior issued ministerial laws defining visa types, some of which are issued only to diplomatic or official passport holders. In contrast, others are issued to persons wishing to enter and temporarily stay in Thailand or to individuals wishing to enter and take up residence in the kingdom. The different visa types entitle their holders to different rights concerning the length of stay in Thailand, and visa fees vary according to visa type. General visa categories are as follows: Non-quota immigrant visas Transit visas Non-immigrant visas Tourist visas Courtesy visas Official visas Diplomatic visas Long-term resident visas

Work Permit

Foreigners are required to obtain a work permit issued by the Director-General of Labor to work in Thailand. An employer who wants to hire a foreigner as their employee has to apply for the permit and pay the fees. Foreigners entering Thailand to work must have already obtained a non-immigrant visa to apply for a work permit. The permit is then issued within seven business days of receipt of the application. The work permit should specify the work location, work period, nature of the work, and the employer's details. The permit is granted for two years or the job's duration in the case of temporary work. The permit can be renewed for a period of two years, but the consecutive period of work cannot exceed four years. The worker is required to keep the permit at the place of work. If it is lost or damaged, a new permit can be issued by applying within 15 days of the loss.

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