Thailand raised its social security wage ceiling on 1 January 2026 for the first time in decades, and put it on a published path to rise twice more. This guide sets out the current contribution rates and caps, the tax brackets, the provincial minimum wage, the severance scale, and the ways to run payroll, whether you use your own entity or outsource it to AYP.
Need Thailand payroll handled end to end? Speak to the AYP team.
Running payroll in Thailand means withholding income tax each month, paying social security on both sides, and carrying a severance liability that grows with every year an employee stays. For most of the past twenty years the social security calculation barely moved. That changed on 1 January 2026, and it will change twice more on a schedule that is already published, so this is a good moment to check what your payroll is actually calculating.
This guide covers what employers are legally required to do: the 2026 contribution rates and the new ceiling, the tax brackets, the provincial minimum wage, the severance scale, the filing calendar, and the ways to actually run payroll once you have staff on the ground. It sits alongside AYP's wider APAC payroll services and the full payroll country guides.
The table below is the quick reference most employers need. Rates and ceilings are current for 2026.
Three bodies set the rules. The Revenue Department administers personal income tax and the monthly withholding return. The Social Security Office runs the Social Security Fund and the Workmen's Compensation Fund. The Department of Labour Protection and Welfare oversees the Labour Protection Act, which sets the minimum wage, working hours and severance.
Payroll is processed at least monthly and paid in Thai Baht. The tax year follows the calendar. Unlike Hong Kong or Singapore, Thailand does withhold income tax at source, so the monthly calculation matters and is reconciled through the employee's annual return.
The framework rests on the Revenue Code for tax, the Social Security Act for contributions, and the Labour Protection Act for employment terms and severance. Foreign employees working in Thailand under a work permit are covered by social security on the same basis as Thai nationals.
Employers and employees each contribute 5% of wages to the Social Security Fund under Section 33 of the Social Security Act. The contribution is calculated on a wage base with both a floor and a ceiling, so it is capped in absolute terms rather than rising indefinitely with salary.
The ceiling is where 2026 changed. Published in the Royal Gazette on 12 December 2025 and effective from 1 January 2026, the maximum monthly wage base rose from THB 15,000 to THB 17,500. The rate itself did not change, but the maximum contribution went up from THB 750 to THB 875 a month for each side. The floor stayed at THB 1,650, giving a minimum contribution of about THB 83.
The increase is the first phase of a published schedule, which makes it unusually easy to plan for.
Separately, employers pay into the Workmen's Compensation Fund, which covers work-related injury and illness. This one is employer-only, charged annually rather than monthly, and set between 0.2% and 1% of annual wages depending on the risk profile of the business. Most office-based employers sit at the bottom of that range.
Thailand taxes residents on a progressive scale with eight bands. Employers withhold monthly and file the PND1 return, and employees reconcile through their annual return. An individual is tax resident if present in Thailand for 180 days or more in a calendar year.
Taxable income is calculated after a standard expense deduction, a personal allowance, and any further allowances the employee claims for dependants, insurance, provident fund contributions and similar. Social security contributions are deductible. The government has signalled that it intends to tighten some personal deductions, so the allowance side is worth watching even though the rates themselves are unchanged for 2026.
Thailand sets its minimum wage by province rather than nationally, currently across seven bands running from THB 337 to THB 400 a day. The rates were reconfirmed without change to the provincial bands with effect from 1 July 2026.
The top rate of THB 400 applies in Bangkok, Phuket, Chonburi, Rayong, Chachoengsao and on Koh Samui. The lowest rate of THB 337 applies in Narathiwat, Pattani and Yala. One rule catches employers out: the THB 400 rate also applies nationwide to category 2 to 4 hotels and licensed entertainment venues, overriding the local provincial rate where that is lower.
Because the wage is set daily rather than monthly, employers converting to a monthly salary need to be sure the result still clears the daily floor for the province where the employee works.
Severance is mandatory under the Labour Protection Act when an employer terminates employment without one of the statutory causes, and it scales with length of service. It is the single largest hidden cost in Thai payroll, and unlike a discretionary bonus it cannot be negotiated away.
Thailand's monthly filings sit a week apart, and filing the withholding return online buys an extra eight days.
Most payroll problems for foreign employers in Thailand come from a few recurring issues rather than the base calculations.
The first is the new social security ceiling. Payroll systems configured against the old THB 15,000 base will under-deduct for anyone earning above it, and because the change took effect in January the gap compounds across the year until someone notices.
The second is severance provisioning. The entitlement reaches 400 days' wages at twenty years of service, and it applies to ordinary termination rather than just redundancy. Companies that treat it as a contingency rather than an accruing liability get an unwelcome surprise when a long-serving team is restructured.
The third is the provincial minimum wage, particularly the rule that puts hotels and licensed entertainment venues on the top rate regardless of where they operate. An employer applying the local provincial rate in a lower-cost province can be underpaying without realising it.
The fourth is the daily basis of the minimum wage. Thai minimum wages are expressed per day, so converting to a monthly salary requires care to make sure the effective daily rate still clears the floor.
Once you have people to pay, there are three practical ways to handle Thai payroll, and the right one depends on whether you already have a local entity and how many staff you expect to hire.
Building payroll in-house gives full control but needs local expertise and Thai-language filing. A local provider takes the processing off your plate while you keep the employer relationship. Outsourced or managed payroll goes further, covering withholding tax, social security, the compensation fund and severance tracking as a single service.
If you have not set up a Thai entity yet, or you want to hire before you do, an Employer of Record is the usual route, since it lets you employ staff compliantly without your own local company. That is a broader hiring decision than payroll alone, so it is covered separately in AYP's Employer of Record Thailand service. For a comparison of running payroll internally against outsourcing it, AYP's team has written on in-house versus outsourced payroll.
AYP handles Thai payroll for companies that would rather not manage the filing calendar themselves. The platform withholds income tax and files the PND1, calculates social security against the current ceiling, handles the Workmen's Compensation Fund, applies the right provincial minimum wage, tracks accruing severance, and issues payslips. Pricing is a predictable monthly fee, set out on the pricing page.
The same team supports payroll across 18 Asian markets, so a company scaling from Thailand into the wider region keeps one provider rather than stitching together local vendors. To see how it maps to your headcount, speak to the AYP team. Employers new to the process can also read AYP's note on the common payroll mistakes businesses make.
Employers and employees each contribute 5% of wages to the Social Security Fund. From 1 January 2026 the wage base runs from THB 1,650 to THB 17,500 a month, so the maximum contribution is THB 875 a month from each side, up from THB 750 previously.
The maximum wage base rose from THB 15,000 to THB 17,500 with effect from 1 January 2026, published in the Royal Gazette in December 2025. The 5% rate is unchanged. The ceiling is scheduled to rise again to THB 20,000 in 2029 and THB 23,000 in 2032.
Minimum wage is set per province and ranges from THB 337 to THB 400 a day. The top rate applies in Bangkok, Phuket, Chonburi, Rayong, Chachoengsao and Koh Samui, and also nationwide to category 2 to 4 hotels and licensed entertainment venues.
Severance scales with service, from 30 days' wages after 120 days of employment to 400 days' wages after 20 years. It is required on termination without statutory cause, so it should be treated as an accruing liability rather than a contingency.
Not directly through a standard payroll provider, which needs an entity to register with the Revenue Department and the Social Security Office. Employers who want to hire and pay staff before setting up a company typically use an Employer of Record instead.