Employer of Record in Thailand

Hiring employees in Thailand presents several avenues for international businesses looking to expand their operations. While establishing a local entity offers direct control and a permanent presence, this path often involves significant time, cost, and administrative burdens related to registration, legal compliance, and ongoing management. Alternatively, companies might consider engaging individuals as independent contractors, though this approach carries risks of misclassification and potential legal challenges if the relationship resembles employment.

A more streamlined and compliant solution for many foreign companies is to partner with an Employer of Record. This approach allows businesses to quickly and legally hire staff in Thailand without needing to set up their own local legal entity.

Here are the primary options for hiring in Thailand:

• Establishing a local entity: Incorporating a company or branch office in Thailand, which requires navigating local business registration, tax laws, and employment regulations.
• Leveraging an Employer of Record (EOR): Partnering with a third-party service like Rivermate that legally employs your staff in Thailand on your behalf, handling all compliance.
• Hiring independent contractors: Engaging individuals for specific projects or tasks, where they are responsible for their own taxes and benefits. This model requires careful consideration to avoid deemed employment.

How an EOR Works in Thailand

An Employer of Record (EOR) acts as the legal employer for your workforce in Thailand, taking on all associated responsibilities, while you retain full control over day-to-day management and assignments. This arrangement simplifies global expansion significantly.

The EOR takes care of:

• Payroll processing and tax compliance: Ensuring accurate salary payments and adherence to Thai income tax regulations.
• Social security contributions: Managing mandatory contributions to the Thai social security system.
• Labor law compliance: Drafting compliant employment contracts, managing leave, benefits, and navigating termination requirements according to Thai labor laws.
• Benefits administration: Facilitating and managing statutory and supplementary employee benefits.
• Visa and work permit sponsorship: Assisting with the necessary permits for foreign employees to work legally in Thailand.

Benefits for Companies

For businesses looking to quickly and compliantly hire in Thailand without the complexities of establishing a local entity, an EOR offers compelling advantages:

• Rapid market entry: Hire employees in weeks rather than months, accelerating your expansion plans.
• Reduced administrative burden: Outsource complex HR, payroll, and legal compliance tasks to local experts.
• Guaranteed compliance: Minimize legal and financial risks associated with employment laws, taxes, and social security in Thailand.
• Cost-effectiveness: Avoid the significant upfront costs and ongoing expenses of establishing and maintaining a local subsidiary.
• Focus on core business: Free up internal resources to concentrate on strategic growth and operational success.

Rivermate's transparent pricing model eliminates complexity with a single, competitive monthly fee per employee. Unlike traditional PEO providers, our pricing in Thailand includes comprehensive HR support, benefits administration, compliance management, and access to our proprietary dashboard for real-time workforce analytics. No hidden costs, no setup fees—just straightforward pricing that scales with your business needs while ensuring full legal compliance in Thailand.

Thailand's tax system features a progressive income tax structure, with employers responsible for withholding income tax from employees' wages and remitting it monthly to the Revenue Department. Employers must also contribute to social security (SSF) at 5% of employee salaries (capped) and to the Workmen's Compensation Fund, with rates varying by industry. Employees contribute 5% to SSF, which is deductible, and are liable for income tax based on progressive rates up to 35% for income over THB 5 million.

Key employer obligations include calculating and withholding income tax, filing monthly PND.1 returns by the 7th (online) or 15th (manual) of the following month, and filing annual personal and corporate tax returns within specified deadlines. Employee deductions include personal allowances (THB 60,000), spouse (THB 60,000), and child allowances (THB 30,000 per child). Income tax rates for 2025 range from 0% up to 35%, depending on income levels.

Foreign workers' tax residency depends on stay duration (≥180 days), with treaties potentially offering relief. Companies should consider special incentives like BOI privileges and industry-specific regulations, especially regarding profit repatriation and tax treaties.

Thailand's salary landscape varies significantly by industry, role, experience, and location, with Bangkok generally offering higher wages. Typical monthly salaries range from THB 30,000 to THB 180,000, depending on the position, such as Software Engineers earning THB 40,000–120,000 and Data Scientists THB 50,000–150,000. Employers should consider these benchmarks when structuring competitive compensation packages.

Minimum wage laws are province-specific, with daily rates from THB 330 to THB 370 as of 2025. Employers must comply with these minimums to avoid penalties. Common benefits include annual bonuses (often one month’s salary), provident funds, social security contributions, and allowances for transportation, meals, or housing. Salaries are predominantly paid monthly via bank transfer, with payslips required for compliance.

Staying updated on industry trends, skill demands, and regulatory changes is vital for developing a competitive and compliant compensation strategy in Thailand.

Thailand's labor laws mandate minimum leave entitlements for employees, including 6 days of paid annual vacation after one year of service. Unused vacation days can be carried over or paid out upon termination. The country observes approximately 13-16 public holidays annually, with provisions for compensation if these fall on weekends or if employees work on these days, often with double pay.

Employees are entitled to 30 days of paid sick leave per year, requiring medical certification for absences over 3 days. Parental leave includes 98 days of maternity leave, with partial salary coverage during the first 45 days, and 15 days of paternity leave within 30 days of childbirth. Additional leave types such as bereavement, study, sabbatical, and ordination leave may be granted based on company policies.

Thailand's employee benefits are governed by legal mandates and market expectations. Employers must provide mandatory benefits such as social security contributions, workmen's compensation, paid annual leave (minimum 6 days), paid public holidays (13-15 days), sick leave (up to 30 days), maternity leave (98 days), and severance pay, all regulated by respective laws. These ensure basic employee security and compliance is crucial to avoid penalties.

Beyond legal requirements, many companies offer optional benefits to enhance attraction and retention, including private health insurance, provident funds, performance bonuses, allowances (transport, housing, meals), training programs, life insurance, and dental/vision coverage. Private health insurance is especially valued, providing faster, more comprehensive care than public healthcare, with employer-sponsored plans being common.

Retirement benefits include social security pensions, provident funds, government pension funds, and retirement mutual funds, with employer contributions varying by industry. Larger firms and multinationals tend to offer more comprehensive packages, including health, retirement plans, and allowances, while SMEs typically provide fewer benefits but meet mandatory requirements. This mix of benefits helps employers build competitive compensation packages and foster positive work environments.

Employment agreements in Thailand are vital for defining the employer-employee relationship, ensuring legal compliance and clarity. They are typically written, though verbal agreements are valid, and are categorized into fixed-term and indefinite-term contracts. Fixed-term contracts specify a set duration, suitable for temporary roles, while indefinite contracts offer ongoing employment with specific grounds and notice requirements for termination.

Key contract clauses include details on parties, job responsibilities, compensation, working hours, benefits, probation periods, termination conditions, confidentiality, and applicable law. Probation periods usually last 90-119 days, allowing employers to assess suitability with more flexible termination rights during this time. Post-probation, employees generally transition to permanent status.

Confidentiality clauses are enforceable, but non-compete clauses are viewed restrictively by Thai courts, requiring reasonableness in scope and often additional compensation for enforceability. Contract modifications must be in writing and mutually agreed. Termination processes depend on whether the employer or employee initiates, with legal requirements for notice and severance pay based on service length. Employees can terminate with 30 days' notice, and unfair dismissals can be challenged in Thai courts.

Thailand is increasingly adopting remote work, with many companies implementing formal policies by 2025 to attract talent, enhance productivity, and cut costs. The shift is supported by improved technology infrastructure and growing awareness of legal and operational considerations, such as compliance, data security, and employee well-being.

While there is no specific remote work legislation, existing labor laws apply, requiring clear employment contracts, adherence to working hours, social security contributions, and tax regulations. Employers must also ensure safety and well-being, even when employees work remotely.

Key flexible work arrangements include full remote work, hybrid models, and flexible hours, which are becoming more prevalent. Employers should focus on legal compliance, technology infrastructure, and employee support to establish sustainable remote work environments.

Terminating an employee in Thailand requires compliance with the Labor Protection Act, including adherence to notice periods, severance pay, and procedural steps. Employers must provide written notice specifying the reason and effective date, with notice periods varying by length of service (from no notice for less than 120 days to at least 300 days for over 10 years). If immediate termination occurs, salary in lieu of notice must be paid.

Severance pay is mandatory for dismissals without cause, calculated based on the employee’s length of service, with entitlement ranging from 30 days' wages for 120 days to 1 year to 400 days' wages for over 20 years. Grounds for termination with cause include gross misconduct, criminal acts, or abandonment of duty, but must be supported by documented evidence. Employers must follow procedural requirements such as paying all dues, notifying social security, withholding taxes, and maintaining records to ensure lawful termination.

Employers should document all disciplinary actions and seek legal advice to mitigate wrongful dismissal risks, as employees can file claims for unfair termination, potentially leading to reinstatement or compensation.

Thailand is experiencing a notable rise in freelancing and independent contracting, driven by the demand for flexibility and specialized skills. For businesses, understanding the legal and contractual nuances of engaging independent contractors is essential to ensure compliance with Thai labor laws and effective talent management. Proper worker classification is crucial, as misclassification can result in penalties. Key factors distinguishing employees from contractors include control over work, integration into business operations, provision of tools, financial risk, duration of relationship, and payment methods.

Engaging independent contractors requires clear service agreements that outline the scope of work, payment terms, relationship clauses, confidentiality, intellectual property rights, and termination conditions. Intellectual property created by contractors should be assigned to the hiring entity through explicit contract clauses to avoid ownership disputes. Contractors are responsible for their own taxes, including income tax and potential VAT registration if income exceeds THB 1.8 million. Businesses must withhold taxes on payments to contractors and provide withholding tax certificates.

Independent contractors are prevalent in sectors like technology, creative industries, consulting, education, media, and professional services, where specialized skills and project-based work are in demand. These sectors benefit from the flexibility and expertise that contractors provide without the long-term commitment of traditional employment.

Thailand's work permit system in 2025 requires foreign workers to obtain appropriate visas and comply with regulations. The most common visa types include the Non-Immigrant B Visa (initially 90 days, extendable to one year), Business Visa (for employment with sponsorship), Investment Visa (for significant economic investments), BOI Visa (for employees of BOI-promoted companies), and Smart Visa (for highly skilled professionals). Employers play a key role in sponsoring employees and ensuring compliance.

Key data points for visa types are summarized below:

Employers must sponsor foreign employees, prepare necessary documentation, and ensure ongoing compliance to maintain legal work status. The process emphasizes adherence to Thai immigration regulations, making understanding visa types and requirements essential for smooth operations.