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Compliance
Published:
January 13, 2026
Last updated:
January 13, 2026
For regional HR leaders expanding into Thailand, understanding the country's employment law framework is essential for compliant hiring and payroll management. Thailand represents a strategic APAC market with competitive labor costs, growing manufacturing and service sectors, strategic mainland Southeast Asia location, and favorable Board of Investment (BOI) incentives. However, employment regulations require attention to contract requirements, wage compliance, and particularly complex foreign worker regulations.
Organizations managing employees across several APAC markets benefit from Thailand's relatively straightforward employment framework. However, specific areas require attention: foreign worker minimum salaries varying by nationality and BOI status, provincial minimum wage differences, and proper work permit documentation.
Thailand's employment relationships are primarily governed by the Labour Protection Act B.E. 2541 (1998), establishing minimum labor standards and employee protections.
Regulatory oversight: Department of Labour Protection and Welfare under Ministry of Labour conducts enforcement and inspections; Labour Courts adjudicate disputes.
Key legislation:
Regulatory bodies: Ministry of Labour (policy and enforcement), Labour Courts (disputes), Social Security Office (social security administration), Immigration Bureau (work permits).
Employment contracts can be oral or written, but written contracts strongly advised.
Recommended provisions: Employee/employer identification, job title and duties, work location, employment start date and duration (fixed-term vs. indefinite), working hours and rest periods, wage structure, leave entitlements, probation period (typically 119 days maximum to avoid severance obligations), notice periods, severance provisions, social security coverage.
Foreign worker contracts: Must align with work permit job types, meet minimum salary thresholds, and be available for immigration inspection.
For organizations hiring in Thailand, using comprehensive written contracts and ensuring foreign worker contracts comply with work permit conditions prevents disputes.
Legal limits: Maximum 8 hours per day, 48 hours per week for most industries.
Rest periods: Minimum 1-hour break for work exceeding 5 hours daily.
Weekly rest day: Minimum 1 rest day per week.
Overtime compensation:
Example: Employee earning THB 30,000/month (THB 156/hour) works 5 hours ordinary overtime, 4 hours rest day:
Work hour documentation: Maintain attendance records and overtime logs for inspection.
Penalties: Fines up to THB 100,000 for violations.
2025 minimum wage: THB 400 per day in many provinces. Some provinces may have different rates (verify current provincial rates).
Payment frequency: At least once monthly (or more frequently as agreed).
Payslip requirements: Must issue payslips when requested by employee showing basic salary, allowances, overtime, deductions, net salary.
Permitted: Social security employee contributions (5% up to THB 15,000 ceiling), income tax withholding, court orders, employee-agreed deductions (loans, damages) subject to limits.
Prohibited: Arbitrary or excessive deductions.
Record retention: Wage and time records maintained minimum 2 years.
Penalties: Fines up to THB 100,000 for underpayment or unlawful deductions.
Explore payroll compliance across APAC markets.
Thailand's Social Security Fund provides sickness, maternity, disability, death, unemployment, and retirement benefits.
Contribution rates:
Contribution ceiling: Maximum insurable salary THB 15,000/month (max contribution THB 750 + THB 750 = THB 1,500 total).
Example - THB 30,000/month employee:
Registration deadline: Within 30 days of employment.
Contribution remittance: By 15th of following month.
Foreign nationals require work permits before employment.
Prohibited occupations: 39 occupations reserved for Thai nationals (manual labor, agriculture, retail sales, tour guiding, accounting, law practice, etc.).
For BOI-promoted companies:
For non-BOI companies:
Note: Requirements vary by company type (BOI vs. non-BOI), position, and nationality. Verify current requirements.
Submit work permit applications to Ministry of Labour/Immigration Bureau with business documents, job description, candidate credentials, employment contract meeting minimum salary, company financials.
Work permit validity: Typically 1-2 years (cannot exceed visa validity). Renew before expiration.
Reporting requirements: Report employment changes, termination, address changes within specified timeframes (typically 15 days).
Job assignment restrictions: Foreign workers may only perform duties specified in work permit.
Thai-to-foreign worker ratios: Some categories require minimum Thai employee ratios (e.g., 4 Thai per 1 foreign for general permits).
Illegal employment: Fines THB 10,000 to THB 100,000 per illegal worker, potential imprisonment, business license suspension; foreign worker faces fines, detention, deportation, entry bans.
For organizations establishing Thailand operations with expatriate staff, budgeting adequate time (2-3 months) for work permit processing and ensuring salary packages meet thresholds prevents serious legal exposure.
Employer-initiated termination permitted for: Serious misconduct, willful disobedience, criminal acts, gross negligence, absence without valid reason 3+ consecutive days, imprisonment, business closure, operational changes, downsizing.
Notice requirements: Advance notice or payment in lieu (typically 1 month per contract).
Eligibility: Employees terminated by employer (except serious misconduct) entitled to severance based on tenure.
Calculation:
Example: Employee with 8 years earning THB 30,000/month terminated for redundancy:
Probation exception: Employees terminated during first 119 days not entitled to severance. Many employers use 119-day probation to assess fit before obligations begin.
If found unlawful: compensation equal to wages employee would have received if contract continued (up to maximum based on tenure), plus potentially severance pay.
Learn more about employee termination challenges across APAC.
Inspections verify contract compliance, working hours, wage payment, safety standards, foreign worker documentation, social security enrollment.
Violations result in: Administrative fines (THB 100,000), business license suspension, deportation of foreign staff, criminal penalties for serious violations.
Best practices: Maintain lawful payroll, accurate attendance records, compliant contracts, valid work permits, timely social security contributions.
Relatively employer-flexible: More straightforward than highly protective markets (Philippines, Japan, South Korea), similar to Singapore/Hong Kong but with mandatory severance.
Significant severance for long tenure: 300 days' wages for 10+ years creates substantial termination costs, exceeding most APAC markets.
119-day probation strategy: Using 119-day probation (just under 120 days triggering severance) common practice unique to Thailand.
Lower social security: 5% employer (capped at THB 15,000) significantly lower than Singapore CPF (17%), Malaysia (~15%), mainland China (30-37%), South Korea (10-15%).
Complex foreign worker salaries: Nationality-based minimums and BOI vs. non-BOI differences create complexity not present in markets with uniform thresholds.
Provincial minimum wage variations: Similar to mainland China and Philippines' regional variations.
By partnering with AYP's EOR services, your organization enters Thailand confidently while we manage local compliance complexity, navigate foreign worker regulations, and ensure continuous regulatory adherence.
Explore AYP's EOR services across APAC markets, or learn about compliance challenges when hiring across Asia.
