Employees are a key part of your business. There are certain regulations you should be aware of as required by law when hiring an employee in Thailand.
In this article, we’re going to guide you through the regulations you need to know when hiring an employee as a business owner in Thailand.
Recruiting
The most common method for hiring an employee in Thailand is through a job website. Jobsdb, jobtopgun, and workventure are popular job websites. They charge a fixed fee per month per position. I have the most success with Jobsdb but they are also more expensive than other options.
LinkedIn is an appropriate alternative for manager levels and above.
You can also use a recruiter to find you employees. They charge one-and-a-half to two months’ salary as a commission. The commission should be paid after the recruited employee passes probation.
Another effective way to get an employee is to use your personal network. You can give a bonus of THB5,000 to anyone who refers you to a successful candidate.
Probation
The usual probation period in Thailand is three to four months. If an employee has worked for you for 120 days or more, you generally have to pay statutory severance of at least 30 days’ wages if you terminate them without legal cause.
Once your employee passes probation, it’s up to you to give them a raise or not.
Employee Contracts
You should prepare two sets of employee contracts for all employees: one for yourself and the other for your employee. The contracts should be signed by both parties.
The Ministry of Labour in Thailand has a good example of an employee contract.
When hiring Thais, you should have a Thai version of the employee contract.
Salaries
There is no statutory minimum monthly salary for Thai new graduates. Thailand’s legal minimum wage is set as a daily provincial rate, while monthly salaries for new graduates vary by role, location, and qualifications. For some entry-level office roles, employers may budget around THB18,000 to THB23,000, but you should check the current market rate for the position.
However, there’s no definitive way to specify how much salary you should pay your employees.
You can look at job websites and do market research for the salary of the position you’re looking for.
Salaries should be paid at the end of every month. Some companies pay on the 25th. Some companies pay on the last day of the month.
A common way to pay salary in Thailand is for your accountant to prepare payroll through online banking. Then, you can approve each employee’s salary manually.
For larger corporations with a lot of employees, your accountant can send the payroll with your approval to a bank for batch payments.
You should deduct employee Social Security and personal taxes on your employees’ behalf from their salary before paying them.
Social Security
After you set up a business and hire employees, you must register eligible employees with the SSO office for the Social Security program. You need to inform them within 30 days after hiring a new employee. If the employee quits, you have to tell them by the 15th of the following month.
You need to pay SSO contributions on behalf of your employees by the 15th of the following month. The standard contribution is 5% of each employee’s monthly wage, calculated on wages capped at THB17,500, so the usual maximum contribution is THB875 per month from the employer and THB875 per month from the employee.
Working Hours, Public Holidays, and Vacations
The most common work time in Thailand is 40 hours a week, eight hours a day. But it depends on you how you want to manage work hours.
Some company working hours are from 9:00 AM to 6:00 PM with a one-hour lunch break, while other workdays can last from 10:00 AM to 7:00 PM.
It’s required by law to provide a rest break of at least one hour after no more than five consecutive work hours. The number of normal working hours per week must not exceed 48, and lower limits apply to some legally prescribed dangerous work.
At least 13 public holidays, including National Labour Day, must be provided per Thai law. The easiest way to set a holiday is to follow Thai banking holidays.
There are more than 13 public holidays in Thailand every year. You can talk to your employees and let them choose which ones they want to take.
At least six paid vacation days must be provided to an employee who has been working for longer than one year. After that, it depends on you how many paid vacations you want to give your employees.
You can give six days to those who’ve been working for over one year, ten days for those who’ve been working for over two years, and 15 days for those who’ve been working for three years or more.
Overtime
You are required to pay overtime to your employees under the following rates and conditions:
Overtime on normal working days: If an employee works more than normal working hours on a normal working day, you have to pay an overtime rate of at least one-and-a-half times his or her hourly rate.
Overtime on holidays: If an employee works on a weekly holiday, traditional holiday, or annual leave day during normal working hours, holiday work pay rules apply. Monthly-paid employees usually receive at least an additional one times their hourly rate for the hours worked on that holiday, while employees who are not normally entitled to wages on holidays receive at least two times their hourly rate.
For example, if you agreed with your employee beforehand and mention in the contract that you want them to work on Saturday as part of their normal working week, and they still have at least one weekly holiday, those hours are normal working hours, not overtime.
However, if their normal working hours fall on weekdays and they work on a scheduled weekly holiday or public holiday, you have to pay holiday work pay.
If an employee works overtime on a holiday, you have to pay overtime at a rate of at least three times that of the hourly pay rate.
The total number of overtime and holiday work hours must not exceed 36 each week unless an exception under labour rules applies.
Bonuses
Bonuses aren’t required by law. But employees expect bonuses from the companies they work for.
There are two common types of bonuses in Thailand. The amount of bonus you get depends on you.
- Yearly Bonus: Most companies pay a yearly bonus in December or April. Bonuses can be one to two months’ salary, but they can be more or even less.
- Performance bonus. This is given based on employee performance. For example, you can set a goal in each quarter and give a performance bonus if any employee achieves that goal. Bonuses can be THB5,000 per quarter.
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