Global Hiring Guide: Thailand

Thailand offers immense potential for global expansion. The country boasts a stable business environment and a skilled workforce with expertise across various fields, including digital marketing, software development, and IT. It’s no wonder Thailand’s employment rate at 2023 was as high as 99%, and the country’s economy grew from 1.6% in the first quarter to 2.3% in the second quarter of 2024, as McKinsey reports.

However, while Thailand's labor market is replete with opportunities, navigating the local employment landscape presents challenges. Salary expectations, cultural nuances, compliance requirements, and competition for top talent are crucial factors HR teams must face for successful recruitment in Thailand.

In this guide, we explore the intricacies of hiring foreign workers in Thailand, covering key details like taxation, labor laws, and how to manage your workforce properly.

Understanding the Thai Labor Market

For efficient recruitment in Thailand, you must understand these aspects of the Thai labor market:

Labor laws

The Labour Protection Act B.E. 2541 (1998) and its subsequent amendments govern recruitment in Thailand, protecting employees from unfavorable working conditions. It covers stringent regulations regarding employment contracts, working hours, work permits, overtime, salaries, and benefits administration. Understanding these laws is crucial to achieving compliance and preventing legal issues during employment in Thailand. 

Minimum wage

Thailand minimum wage differs across provinces. At the moment, the daily minimum wage ranges from 328 baht (US $9.10) in the provinces of Narathiwat, Yala and Pattani to 354 baht (US $9.80) in the provinces of Phuket, Rayong and Chonburi. However, the Thai government has announced plans to increase the daily minimum wage to 400 baht from October 2024. 

Working hours

During recruitment in Thailand, the working hours are 48 hours per week. That is, eight hours daily, six days a week. However, for hazardous jobs, the maximum working hours are seven hours per day and 42 hours per week. Thai employees are also entitled to one hour of rest after every five working hours and one day off weekly. 

Any extra working hours beyond the standard eight on a regular workday must be compensated at 150% of the employee’s hourly wage. Overtime cannot exceed 36 hours per week; the compensation depends on the days the employee works overtime. 

For instance, work of up to eight hours during a holiday or rest day is paid at 200% of the regular hourly rate, and any extra hours worked during a public holiday are compensated at 300% of the standard hourly rate.

Social security

Employers must register their employees with the Workmen Compensation and Social Security Fund (SSF), which covers employees during retirement, unemployment, injury, illness, maternity and paternity leave, disability, and death.

As part of Thailand’s payroll requirements, employees and employers must contribute 5% of their income (capped at 875 baht per month) to the Social Security Fund on the 15th of the following month. 

When hiring new employees during recruitment in Thailand, register them if they’ve never gotten a social security card. If the new hire already has a Social Security card, the law still requires you to submit the list of insured persons who join your company to the Social Security office.

Process for Recruitment in Thailand

Recruitment in Thailand first begins with setting up a legal entity and registering with local authorities or hiring an employer of record in Thailand to employ workers on your company’s behalf. Generally, it involves sharing job descriptions on recruitment channels, screening applicants, and offering the best candidate a job:

Job description

Every recruitment in Thailand begins by identifying the need for a new hire. This involves creating a clear job description that spells out the required skills, qualifications, and responsibilities for the role. Additionally, include your competitive salary in the description, as it helps attract and convince the best candidates to apply.

Recruitment channels

Once you’ve created or updated the job description for employment in Thailand, post it on job boards, such as  JobsDB.com, Jobthai.com, Indeed, and JobTopGun. Posting on these job boards during recruitment in Thailand is sometimes free or charged per post.

Besides job boards, employers use other channels to reach potential candidates when hiring foreign workers in Thailand. These include social media such as LinkedIn and Facebook, recruitment agencies, and partnering with universities.

Learn more: 10 Key Metrics to Measure in Your Recruitment Process

Screening and selection

Sift through resumes, cover letters, and answers to questions depending on the application specifications for employment in Thailand. This is essential to determine the candidates who meet the qualifications and experience requirements of the role. Also, screening interviews should be scheduled online, in-person, or via phone calls to assess their communication skills, work experience, salary expectations, and suitability for the role.

Job offers

Once you've selected a candidate, send them an offer letter covering vital employment in Thailand, including work hours, salary, and benefits. Candidates may negotiate for higher pay, additional benefits, or flexible working conditions if they aren’t satisfied with your offer.

Onboarding and Compliance for Hiring Foreign Workers in Thailand

Proper employee onboarding and compliance are vital to successful employment in Thailand. They make hiring foreign workers in Thailand seamless and compliant.

Employment contracts

Thailand’s employment legislation allows for fixed-term and permanent contracts, whether verbal or written. The contract must abide by the Labor Protection Act and specify employment terms, including job scope, working hours, start dates, compensation, benefits, rest days, notice periods, and termination policies. Drafting these agreements in Thai and English will help avoid misinterpretation during recruitment in Thailand.

Although preparing an employment contract is not compulsory for recruitment in Thailand, it protects both the employee and employer from potential legal disputes. In such cases, the Thai legal system often favors the employee if a clearly defined contract is not in place.

Work permits

Hiring foreign workers in Thailand requires securing them a valid visa (Non-Immigrant ‘B’ or Business Visa) and a work permit Thailand. To apply for a work permit, the following documents must be submitted to the Immigration Bureau and Department of Employment:

• Work permit application form
• Six photographs
• Original education certificates
• Work records and certificates of employment from previous employers
• A recent medical certificate from a recognized hospital in Thailand to prove the applicant doesn’t suffer from drug addiction, alcoholism, mental illnesses, leprosy, tuberculosis, elephantiasis, and syphilis.
• Letter of employment from the company
• Commercial Registration Department certificate showing the name of the company’s managing director, its objectives, and registered capital
• Shareholder’s list certified by the Commercial Registration Department
• VAT certificate
• Social Security payment filing
• Financial statements and tax returns from the company

After submitting the documents, the work permit will be issued within seven working days.

Social security registration

Register local and foreign employees legally employed in Thailand with the social security office after recruitment in Thailand. Both employers and employees must contribute 5% of their income to the Social Security Fund monthly.

Induction training

During recruitment in Thailand, new hires should go through the onboarding process, which includes a thorough orientation and training about your company culture, policies, tools, and processes. The training should also cover their job expectations, responsibilities, and performance metrics. This induction helps new employees settle into their roles and align with company goals.

Read next: Which Employee Onboarding Software is Right for Your Team?

Managing Your Workforce

Below, we explore how to properly manage your workforce and achieve successful recruitment in Thailand:

Thailand payroll and benefits

After onboarding your employees for employment in Thailand, set up Thailand payroll and prepare monthly payslips in Thai Baht. Choose a payroll system compliant with labor laws and your company policy, then assign workers Tax Identification Numbers (TIN) and withhold tax, insurance contributions, and other mandatory deductions.

Thai employee benefits include health insurance, pension and child allowance, unemployment insurance, and workmen’s compensation.

Leave management 

During employment in Thailand, Thai employees who have worked continuously for a year are entitled to six days of annual leave. However, some competitive employers offer workers 10 to 15 days of paid vacation yearly. Depending on the employer and employee agreement, employees can accumulate or carry their leave forward. 

Besides annual leave, Thai employees are legally entitled to other types of leave, including:

• Public holidays: Thai workers are entitled to at least 13 mandatory public holidays each year. 
• Maternity leave: Employment in Thailand offers pregnant workers 98 days of maternity leave. The employer pays for the first 45 days while the government pays for the remaining period through the social security fund at 50% of the regular salary rate.
• Paternity leave: Thai government employees are entitled to 15 days of paid paternity leave each year during recruitment in Thailand. However, private employees don’t have provisions for paternity leave.
• Sick leave: Employees are entitled to 30 paid sick days each year for recruitment in Thailand. The employee must show a medical certificate if the leave exceeds three days.

Additional resources: HR’s Guide to Employee Leave Management

Performance management

Employment in Thailand requires monitoring and reviewing employee performance to ensure they are meeting expectations. This involves setting goals, evaluating performance, conducting annual or mid-year reviews, giving continuous feedback, and offering mentorship and training. These activities boost employee productivity and improve performance in the long run.

Read next: 6 Tips for Managers to Improve Your Next Employee Work Review

Employee relations

It’s one thing to hire workers. It’s another to ensure your workforce remains satisfied throughout their stay in your company. That’s where employee relations become imperative. They help create and maintain a positive working relationship between your company and its workers during recruitment in Thailand. Establishing working employee relations inspires employee engagement, work-life balance, and loyalty.

Compliance

Ensure every team member understands and complies with Thai employment regulations, including fair compensation, proper working hours, taxation, data protection, intellectual property rights, annual auditing, and employee benefits. Compliance ensures smooth operations and prevents legal issues during employment in Thailand.

Taxes and Contributions

Employment in Thailand also involves paying taxes. The corporate tax rate is 20% of the employee’s salary. Understanding the tax obligations of both employers and employees is crucial when hiring foreign workers in Thailand. 

Employer obligations

Enroll them in benefits and social security contributions

During recruitment in Thailand, register local and foreign workers in the benefits packages and social security contributions. As an employer, you must deduct social security from the employee’s salary each month and submit it to the Social Security office by the 15th of the following month. For instance, all contributions for October must be paid by November 15th.

Provident fund contributions (PF)

The Provident Fund is a voluntary retirement savings plan that offers financial cushion to retired employees. Contributions typically range from 2% to 15% of an employee’s salary. Employers are expected to make deductions on employees’ behalf. Though not compulsory, setting up a Provident Fund helps attract and retain employees, providing additional monetary support upon retirement.

Tax compliance

Withholding and remitting employee income tax is mandatory for compliance during employment in Thailand. For a successful taxation, ensure the following:

• Payroll processing: Using HR software eliminates payroll errors and ensures accuracy throughout the payroll process. These tools automate deductions, provide correct calculations, track work hours, and simplify your payroll workflow.  
• Record keeping: Proper record keeping is essential when handling Thailand payroll and taxation. It prevents employee disputes, inaccurate calculations, and legal penalties. Proper documentation also proves the accuracy and timeliness of tax filings during audits or inspections by government authorities and promotes transparency among teams. Your tax records should contain employee information, salary, payment dates, allowances, benefits, and authorized deductions. 
• Tax filing: During recruitment in Thailand, tax filing typically runs from 1 January to 31 March of the following year. If you earned income in 2024, you must file your tax return by 31 March 2025. Filing late can incur legal penalties and fines. You can file your tax return online via the Revenue Department’s e-filing system, the RD Smart Tax mobile app, or paper forms.

Failure to comply with these regulations can result in penalties and interest on unpaid taxes and contributions.

Employee obligations

Income tax

Thailand operates a progressive income tax system with tax rates ranging from 0% to 35%, depending on income levels. 

Considering the applicable tax rates, employers and payroll managers must calculate and deduct income taxes from employee earnings. The withheld tax must be remitted to the Revenue Department by the 7th of the following month with proper documentation and reporting.

Read next: Understanding Income Tax in Thailand

Social security contributions

Workers on employment in Thailand must contribute to the Social Security Fund by paying 5% of their income on the 15th of every month. This fund covers them during unemployment, retirement, health issues, disability, maternity and paternity leave, or death.

Provident fund contributions

Employees can also contribute to a provident fund. It’s an excellent way to save for retirement and lower tax bills simultaneously.

Optimize Your Thailand Hiring Strategy Today

When it comes to recruitment in Thailand, it requires meticulous attention to legal regulations and thorough documentation. You should strive to minimize human error by leveraging automation to ensure accuracy and compliance.

Omni’s suite of features makes the hiring process efficient and compliant. With secure and centralized employee records, HR teams can swiftly access employment contracts and essential documents that support the requirements for hiring foreign workers in Thailand.

For leave management, our time off management capabilities allows managers to approve leave applications on the go, and keep track of who’s in and out of the office with at-a-glance scheduling. Our employee self-service portal allows employees to submit their employee time off request, which automatically routes to the appropriate manager thanks to customizable approval workflows. With automated calculations, employees and managers can easily view leave balances in real-time, and track how many vacation days they have left without having to go through HR.  

When it comes time for payroll and tax processing, Omni offers a comprehensive payroll solution tailored to Thailand’s specific requirements. With features like support for Thai baht and automated tax calculations, Omni can help HR teams simplify their payroll processing and ensure compliance with ease.

Book a demo with our team today to learn more about how Omni can simplify your recruitment in Thailand.

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