Hire and manage employees in Thailand

Employer of Record (EOR) vs. entity

First, you’ll need to decide between an Employer of Record (EOR) or setting up your own entity—which will be largely dependent on your size, resources, and future expansion plans.

• Legal entity in Thailand. Setting up a legal entity usually entails registering with local authorities, opening a bank account in the country, and consulting with local experts to ensure compliance with Thai labor laws.
• Thai EOR. An EOR service is a third-party service that operates as an employer on a company’s behalf, saving you the hassle of setting up your own entity. Not only do EORs allow you to hire full-time Thai employees, but they also handle all the legal requirements for complying with Thai laws for payroll, contracts, and benefits. EORs also include calculating and withholding taxes, onboarding and managing employees, and running payroll.

Here are some pros and cons to consider:

If you’ve already selected an EOR, you’re ready for the next steps! To continue the hiring process, you’ll need to collect your prospective hire’s information (including full name, identification documents, date of birth, date of hire, contact information, and bank account information) and their Taxpayer Identification Number (TIN). For a full walkthrough on how to hire employees through an EOR in Thailand—and to learn how Rippling can help you hire and onboard them in 90 seconds—check out our guide.

Classifying Thai workers: employees vs. contractors

When you hire employees in Thailand, you want to make sure you’re classifying them correctly—either as independent contractors or employees. Misclassifying Thai employees not only damages your company’s reputation; it can also result in legal consequences. 

Our beginner’s guide to worker classification in Thailand covers the necessary details and helps you avoid any missteps. Here’s an overview of the difference between contractors and employees in Thailand:

Work permits for Thai employees

If your new employees aren’t Thai nationals, they’ll need to have valid work permits to be legally hired. Regardless of the length of time or profession, any foreign employee will need to apply for a work permit—with the exception of diplomats or certain volunteers. 

Thailand has several options available for work visas (the most common being the Non-Immigrant B Visa):

• Non-Immigrant B Visa (Business Visa): This visa is for foreign nationals looking to work or conduct business in Thailand for any period of time.
• IB Visa: This visa is most useful for business owners and investors, looking to invest or expand their operations into Thailand. 
• Board of Investment (BOI) Visa: BOI visas are intended for workers in BOI-promoted companies. 
• Smart Visa: The newest of all the visa types, the Smart Visa targets digital nomads and other skilled professionals in high-demand fields. 

Note: average time for the Department of Employment in the Ministry of Labour to process a work permit application is seven to 30 business days. For a full guide on Thai visa applications, read our primer on work permits for employees in Thailand.

New hire onboarding checklist

A successful onboarding experience begins before your hire’s first day and continues for at least 90 days. Once you’ve verified they’re legally allowed to work in Thailand, you should already be in preparation mode. Be sure to consider Thailand’s cultural nuances and specific employment regulations in the process. 

Here are some tasks you’ll want to include in your new hire checklist: 

Before their first day

• Complete a background check. 
• Send an employment offer letter.
• Enroll them in benefits and social security.
• Prepare a pre-onboarding package to welcome them.
• Set up their workspace equipment. 

On Day 1

• Run a workplace orientation and training session.
• Send a welcome email.
• Introduce your new hire to the team. 
• Provide key contact information. 

During their first 90 days

• Set clear goals. 
• Schedule regular check-ins and provide feedback. 
• Conduct a probationary period review (to finalize their integration into the team). 

Read our new hire onboarding guide for the complete list of onboarding must-haves in Thailand.

What to include in an offer letter in Thailand

Offer letters are a key part of the onboarding process. They make the conditions of employment clear to the prospective employee and help you maintain compliance with Thai labor laws—so you can avoid any unwanted legal consequences. Here’s a basic checklist of what you’ll want to include in a legal employment offer letter in Thailand: 

• Position, job description, start date, and probationary period 
• Working hours (and overtime policies)
• Compensation and benefits 
• Termination policy 
• Confidentiality and non-disclosure agreements (NDA)
• Intellectual property (IP) 
• Workplace health and safety

Learn more about creating and sending employment offer letters in Thailand here. 

NDAs and confidentiality agreements in Thailand

In Thailand, NDAs can be used to safeguard your business interests, but they come with unique nuances under the Thai Commercial and Civil Code. While NDAs are generally considered enforceable by courts (as long as they’re fair and reasonable), there is no explicit legislation that deals with NDAs. 

When drafted appropriately, a Thai NDA can be used to protect the following kinds of information: 

• Trade secrets 
• Intellectual property 
• Customer lists 
• Financial information 
• Business strategies 

For more information on the validity of NDAs, and when they can be used, see our guide to NDAs in Thailand. 

Running background checks on Thai employees

While background checks aren’t mandatory in Thailand, you should be conducting them as part of the pre-employment screening process to protect your company from potential issues down the road. 

You can conduct different kinds of screenings depending on the role you’re hiring for—as long as you have the applicant’s consent. Here are the background checks you’re legally allowed to run in Thailand: 

Paying employees in Thailand

Once you’ve weighed the pros and cons of an EOR vs. setting up your own entity—and made a choice—you’re ready to implement a payroll solution. Here’s what to do next: 

• Select an international payroll solution. 
• Determine your workers’ employment status (contractor or employee). 
• Capture your new hire’s payroll information including name, date of birth, date of hire, contact information, Taxpayer ID Number (TIN), bank account information, and amount to be paid. 
• Input payment amount in Thai Baht (THB) or your local currency (with their written permission).
• Run payroll. 

As the employer, you’ll also be responsible for deducting the correct income tax amount from payroll and submitting it to the Thai Revenue Department on a monthly basis. Learn more about income tax deductions and running payroll in Thailand in our guide. 

Mandatory employee benefits in Thailand

Full-time employees in Thailand are entitled to a range of benefits, most of which are funded by social security contributions. Both employers and employees are required to contribute to social security each month, each paying 5% of an employee’s monthly salary. Here’s a list of the mandatory benefits in Thailand: 

• Pension. Thailand requires a 7% contribution to a social insurance pension scheme for private sector employees. This number is calculated based on the employee’s average salary over the last five years. Both employees and employers contribute 3% and the Thai government contributes another 1% to the scheme. 
• Child allowances. Once a Thai employee has contributed to social security for at least a year, they’re entitled to 600 THB per month for every child under the age of 15 (up to three children). 
• Medical treatment benefits. If a Thai employee is injured outside of work, they’re entitled to half their salary and benefits that help cover medical exams, rehabilitation, hospitalization, and more. 
• Death benefits. The social security program also funds funeral expenses and death allowances for the beneficiaries of an employee. Allowances are calculated based on the deceased employee’s monthly salary and social security contributions they made. 
• Disability. Disability coverage for Thai employees is generally less than 50% of their salary and partially covers various medical exams and expenses. 
• Vacation and leave. Thai employees receive six days of paid time off each year (plus an additional six days after a full year of service). Paid maternity leave is given to new and expectant mothers for 98 days, but they only receive their full salary for the first 45 days. Additionally, employees receive 30 days of sick leave per year. 
• Workers’ compensation. Employers are required to make annual contributions to the Workmans’ Compensation Fund (WCF) to cover lost wages for employees who’ve suffered work-related illness, injury, or death. 
• Unemployment. If a Thai employee is let go after they’ve made at least six months of social security contributions, they’re entitled to unemployment benefits after the eighth day of losing their job.  

While these benefits are just the statutory minimums required in Thailand, you’re welcome to offer supplementary benefits as well. For more on mandatory and supplementary benefits, read our guide to benefits in Thailand.

Managing remote employees’ computers and apps

While remote work has opened doors for talented labor pools around the world, it’s also created unprecedented logistical problems. As an employer, you’re not just keeping track of international labor laws—you’re also shipping equipment globally, and managing and setting up employee devices for your global team.

With Rippling, you have a single place to set up, manage, and disable employee apps (like Slack and Google Workspace). You can also secure employees’ accounts quickly and grant them access to all the tools they need—from any country. 

Our guide gives you the basics of setting up and managing remote employee devices.

Protecting company IP in Thailand

Protecting your intellectual property is a serious consideration when you’re expanding to Thailand. The laws are complex and not every type of IP is overseen by the same government agency. Here are some of the most important points to keep in mind: 

• The Thai Patent Act, Trademark Act, and Copyright Act provide comprehensive protections for intellectual property—administered by the Department of Intellectual Property.
• Trademarks (including service marks, collective marks, and certification marks) must be directly registered with the trademark office (a division of the Ministry of  Commerce). 
• Copyright protection is automatic in Thailand, though you can opt to apply for additional protection through the Copyright Office. 
• It’s the employer’s responsibility to enforce IP agreements. You can file a formal complaint with the Department of Intellectual Property. 

See our guide for a brief overview of IP protections, including IP assignment agreements, in Thailand.  

Complying with Thai labor laws

There are many intricacies to Thai employment regulations, and you want to be sure to master all of them. While this can seem like a tall task, our guide to Thai labor and employment laws can help ease you into the process.

Here’s a quick overview of the most important regulations: 

• Working more than eight hours per day qualifies as overtime. If an employee works more than eight hours per day (or 48 hours per week), they’re eligible for overtime pay. 
• Enforcing employee rest periods and holidays is essential. To uphold the quality of life for Thai employees, labor laws mandate at least one hour of rest for every five consecutive hours of work. Additionally, a weekly holiday (typically on Sundays) is required as well. 
• Companies with 10 or more employees need to create work rules in writing. These rules must be written in the Thai language, presented to the local labor office, and displayed at the place of work. 
• Employees have the right to form unions. This includes collective bargaining, too.

Terminating employees in Thailand

You need to familiarize yourself with every aspect of the hiring process in Thailand, including termination policies. While it’s likely not something you want to be thinking about just as you’re hiring in a new country, it’s important to protect your business from end-to-end. 

Unlike some countries, Thai labor law doesn’t recognize at-will employment—meaning you can only terminate an employee under specific circumstances, which include: 

• Termination during the probationary period. Within the first 119 days of employment (the probation period), an employment contract can be terminated without penalty from either side. 
• Termination for just cause. If an employee commits negligent, violent, or criminal acts, the employer can dismiss the employee with 30 days’ notice. Severance pay is not required in this case. 
• Fixed-term dismissal. For employees on a fixed-term employment contract, severance pay is also not required. Fixed-work employment is only valid for up to two years and can’t be extended past that. 

Thai employees are entitled to notice periods and severance pay (if they’ve worked longer than 120 days for the employer and aren’t being let go for just cause). The Labour Protection Act—effective as of May 2019—sets the rates of severance payment as follows:

Check out our in-depth guide for more details on Thai dismissal policies and termination pay.

Disclaimer: Rippling and its affiliates do not provide tax, legal, or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any related activities or transactions.