Payroll taxes in Thailand that are of key importance to employers include Personal Income Tax withholding, Social Security contributions, and Workmen's Compensation Fund contributions. Learn more about the processes for setting up payroll, calculating taxes, submitting payments compliantly, and adhering to due dates in Thailand.
Capital City
Bangkok
Currency
Thai Bhat
(
฿
)
Timezone
ICT
(
GMT +7
)
Payroll
Monthly
Employment Cost
5% - 10%
Managing payroll taxes in Thailand requires attention to several key components that affect both employers and employees. Whether you're a small business owner or part of a larger enterprise, understanding Thailand's tax regulations is essential for compliance and efficient operations. Employers in Thailand need to be aware of various tax obligations, including personal income tax withholding, social security contributions, and provident fund contributions. Non-compliance can result in significant penalties, including fines of up to THB 20,000, potential imprisonment, and strained relationships with both employees and authorities.
This article aims to guide you through the key aspects of Thailand's payroll taxes, including calculation methods, filing deadlines, and proper procedures, helping you navigate the complexities of the Thai tax system regardless of your business size or location.
1 January - 31 December is the 12-month accounting period that businesses in Thailand use for financial and tax reporting purposes.
The payroll cycle in Thailand is usually monthly, with employees being paid on or before the last day of the month.
As of 1 January 2025, the minimum wage rate in Thailand ranges from THB 337 to THB 400 per day, depending on the province.
The wage differences reflect economic conditions and cost of living variations across provinces.
There are no specific legal provisions mandating the payment of an annual bonus or a 13th salary. However, employers have the flexibility to offer bonuses at their discretion.
Payroll calculation in Thailand involves several components that affect the final salary amount employees receive. The process typically begins with the gross salary as specified in the employment contract. From this amount, employers must deduct mandatory contributions including:
The calculation must account for any additional earnings such as overtime pay (150% for weekdays, 300% for holidays), bonuses, and allowances. After all deductions, the net salary is paid, typically on the last working day of the month in Thai Baht.
Thailand's payroll tax system consists of several distinct components, each with its own regulations and compliance requirements. Employers operating in Thailand must understand and adhere to these various tax obligations to avoid penalties and ensure proper employee compensation. The main types of payroll taxes in Thailand include personal income tax withholding, social security contributions, and provident fund contributions.
Personal Income Tax (PIT) in Thailand operates on a progressive tax system with rates from 0% to 35%. Employers must withhold this tax from employee salaries based on projected annual income. The first THB 150,000 is tax-exempt, and tax increases through seven brackets, peaking at 35% for income over THB 5,000,000. PIT must be submitted to the Revenue Department using form PND.1 by the 7th of the following month, or by the 15th if filed online. Late or inaccurate filings may incur fines and 1.5% monthly surcharges on unpaid tax.
Employers and employees each contribute 5% of the employee’s monthly salary to the Social Security Fund, capped at THB 750 per person. Contributions are based on a salary range of THB 1,650 to THB 15,000 and fund benefits like healthcare (1.5%), pension (3%), and unemployment insurance (0.5%). Employers must register workers and remit contributions using form Sor.Por.Sor. 1-10 by the 15th of the following month. Non-compliance can result in fines of up to THB 20,000, daily penalties of 2%, or even imprisonment.
This is an employer-only contribution between 0.2% and 1% of payroll, based on the company’s risk classification. It funds compensation for work-related injuries, illnesses, or death. Employers must register with the Social Security Office and pay contributions alongside monthly social security filings. Penalties for non-compliance include fines and legal action.
Businesses must first register with the Department of Business Development to obtain a company registration number. Then, register with the Revenue Department for a tax ID and as a withholding tax agent. Employers with at least one employee must also register with the Social Security Office. Foreign employees require work permits from the Ministry of Labor. Documentation includes company registration, director ID, and employee details.
Choosing the right payroll system ensures compliance and efficiency. Employers can opt for manual processing, in-house software, or outsourced services. Consider compliance, integration, and automation capabilities.
Employers must collect employee forms, ID (Thai or passport), tax ID, bank details, and work permits (for foreigners). Additional info includes dependent allowances or deductions. This data should be securely stored and regularly updated in payroll systems.
Accurate time tracking is essential. Methods include biometric scanners, time cards, or manual logs. Thai law requires recordkeeping for two years. These records support payroll accuracy and compliance with labor inspections.
Employers calculate gross salary, including overtime and bonuses. Mandatory deductions include 5% social security (up to THB 750) and PIT. Voluntary deductions like provident funds (2–15%) may apply. Payroll software or professionals ensure accuracy and legal compliance.
Payslips must show employee name, pay period, gross and net pay, deductions, and allowances. Companies may issue physical or electronic payslips, which must be retained for two years under Thai law.
Submit PND.1 to the Revenue Department by the 7th (or 15th online). Social Security contributions must be reported with Sor.Por.Sor. 1-10 by the 15th. Provident fund reports follow the fund's schedule. Use online or in-person methods. Timeliness avoids penalties.
Most salaries are paid monthly, typically on the last working day. Bank transfers are preferred, though cash or checks are allowed. Thai Baht is the required currency. Some employers offer bi-monthly advances.
Employers must retain tax records and proof of payment for at least seven years.
Understanding the tax obligations for both employers and employees is crucial when operating in Thailand's business landscape. This section explains how taxes and statutory fees affect payroll and individual earnings in Thailand.
Employer payroll contributions are generally estimated at an additional 5%- 10% on top of the employee salary in Thailand.
In Thailand, the typical estimation for employee payroll contributions cost is around 5%.
In Thailand, the income tax system operates on a 'Pay As You Earn' basis, with individual income tax rates ranging from 0% to 35%. The calculation of income tax follows a progressive rate structure as follows:
Thailand offers the National Pension Fund and Provident Fund for employees. To be eligible for an old-age pension, individuals must be aged 60 or older and have made contributions for a minimum of 180 months. here is no legal requirement in Thailand that mandates all companies, regardless of size, to establish a provident fund. The decision to set up a provident fund is left to the discretion of the company.
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Global employers operating in Thailand often encounter unique payroll challenges that can affect compliance and efficiency, like navigating evolving tax laws and managing employee data. With a need for real-time accuracy, modern organizations must develop strategies to overcome these challenges effectively. Below, we explore some of the most common payroll hurdles and provide actionable solutions to streamline payroll processes in Thailand.
Maintaining accurate global payroll reports is often challenging due to currency exchange complexities, data integration issues, and the need to keep employee information up-to-date – including tax information, hours worked, leave balances, and any changes in salary or job status. Generating accurate reports is easy with a comprehensive payroll automation tool that consolidates fragmented data sources, and can keep track of employee payments and deductions.
In Thailand, tax laws and compliance regulations can change frequently, presenting a significant challenge for global employers. Monitoring updates to federal, state, and local tax codes is crucial to avoid non-compliance and costly penalties, but requires significant time and resources. Partnering with local experts or a reputable global HR platform is an effective way to maintain compliance. These services can help employers stay compliant with evolving regulations while freeing up time for more strategic work.
Managing payroll across multiple vendors often leads to fragmented data and inefficiencies, making it difficult to consolidate analytics. These challenges can hinder decision-making, especially when trying to gain a clear view of workforce costs and trends. To address this, organizations can invest in a centralized payroll management system that unifies data from multiple vendors. A consolidated platform simplifies payroll tracking, ensures data accuracy, and provides actionable insights into payroll expenditures.
Global companies are prone to using multiple HR or payroll systems across regions, which can easily lead to fragmented payroll data, increasing the risk of delays and errors in employee compensation. To combat this, seamless integration between payroll and other systems is critical.
Payroll management systems that connect with existing HR and financial platforms can help streamline workflows by reducing manual inputs and ensuring that all departments operate with up-to-date, accurate information. In turn, this helps guarantee on-time, accurate payroll, boosting employee satisfaction.
A global payroll management platform is a software solution designed to streamline and automate the payroll processes for organizations with employees across multiple countries. It helps ensure accurate and timely payment while maintaining compliance with legal and regulatory requirements in Thailand.
Expanding globally is an exciting milestone for any company, but it comes coupled with complex payroll challenges. It doesn’t have to be complicated. At Playroll, our easy-to-implement global payroll management software combines automation with hands-on support to make global payroll truly simple. Here's how Playroll helps:
Disclaimer
THIS CONTENT IS FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE LEGAL OR TAX ADVICE. You should always consult with and rely on your own legal and/or tax advisor(s). Playroll does not provide legal or tax advice. The information is general and not tailored to a specific company or workforce and does not reflect Playroll’s product delivery in any given jurisdiction. Playroll makes no representations or warranties concerning the accuracy, completeness, or timeliness of this information and shall have no liability arising out of or in connection with it, including any loss caused by use of, or reliance on, the information.
ABOUT THE AUTHOR
Milani Notshe
Milani is a seasoned research and content specialist at Playroll, a leading Employer Of Record (EOR) provider. Backed by a strong background in Politics, Philosophy and Economics, she specializes in identifying emerging compliance and global HR trends to keep employers up to date on the global employment landscape.
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Payroll taxes are based on gross salary. PIT is applied progressively (0–35%) with the first THB 150,000 exempt. Social security is 5% of monthly salary, capped at THB 750. Workmen’s Compensation is 0.2–1% of payroll, and provident funds range from 2–15% if applicable.
Options include in-house payroll management, local outsourcing providers, international payroll systems with Thai compliance features, or a hybrid approach. Small businesses may start with manual methods; larger firms often choose software or services for efficiency and compliance.
These include gross salary, overtime, benefits, statutory and voluntary deductions, compliance with tax and labor laws, recordkeeping, and issuing payslips. Accurate and timely processing is essential for avoiding legal issues.
For employees: 0–35% PIT, 5% social security, and optional provident fund. For employers: 5% social security, 0.2–1% Workmen’s Compensation, and optional provident fund matching.
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