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SALARY PAYMENT IN Thai baht (THB, ฿)
CONTRACT LANGUAGES Thai / English
PAYROLL TAX 5.2% – 6%
PAYROLL CYCLE Monthly
TIME TO HIRE 12 hours
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The main piece of legislation that outlines rules related to the relationship between an employer and an employee in Thailand the Thai Labor Protection Act (LPA). Within this code is laws that cover the rights and obligations at both a commercial and civil level. The LPA stipulates that an employer must pay wages, overtime pay, holiday pay and other relevant payments as part of a valid employment contract. There are also specific rules to termination, working hours and minimum pay requirements for employers to abide by.
Other pieces of legislation that is also commonly consulted for labor protections, rights or guarantees are the:
All issues and oversight activities related to labor protection are governed and handled by the department of Labor Protection and Welfare, running under the Ministry of Labor and Social Welfare.
Under Section 17 of the LPA, employers are obligated to provide written notice if wanting to terminate an employee from their duties. Notice must be given on the day of or in advance of one wage cycle ending. The standard notice period is one month. Employees are not expected to provide notice unless it is stipulated as part of their employment contract. The standard period of notice for an employee is one month also.
Under Section 118 of the LPA, it is stated that any employee who has worked longer than 120 days with an employer is entitled to a certain amount of severance pay. The total amount of entitlement is based on how long the employee was in service. The thresholds are as follows:
It is possible for employees to organise their severance payment to be paid in lieu if they are not required from the day of notice or they make an arrangement with their employer. There is also a special severance pay allowance under Thai law if an employer does not give an employee sufficient notice of termination.
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The most relevant legal document in Thailand is the Thai Labor Protection Act, otherwise known as the LPA. Employers can also find relevant laws and guidance within the Civil and Commercial Code on contracts, the Labor Relations Act, The Social Security Act 1990 and the Compensations Act 1994.
As Thai labor law prohibits termination without cause before 120 days of employment, it is common practice for employers to set a probationary period up to 119 days. If a probationary period is within the 120-day threshold, the standard notice period of 30 days is expected.
An employee can terminate their contract at any time, regardless of it is during their probationary period or not. It is not mandatory for employees to provide a reason for terminating their contract, but it is recommended to provide a written letter of notice.
If a probationary period last more than 120 days, then an employer is obligated to pay out a minimum of 30 days severance pay to the employee. The employer must give adequate notice to the employee in written form and pay out any other payments that are owed to the employee under the LPA.
