In a time where people are encouraged to stay home and practice social distancing, remote work and distributed teams have never been more prevalent. Physical offices and physical presence have proven to be not as essential as many people thought, leaving many employers seeking top talent without physical boundaries and restrictions. One of the popular countries for hiring a remote employee is Thailand.
In this article we’ll be covering everything you need to know about employing talent from Thailand, including the hiring process, local labor law requirements, and more. Check out the FAQs below:
Known as being a popular tourist destination, Thailand has, in recent years, expanded its potential for business, and now has the second-largest economy in Southeast Asia. Over the past 10 years, the country’s overall GDP has risen by more than 50%, with Thailand also ranking 21st place on the World Bank’s 2020 Ease of Doing Business Index.
Thailand also has a relatively low daily minimum wage which ranges from THB 313 (USD 10) to THB 336 (USD 11), depending on the employee’s location. While comparatively higher than countries such as the Philippines or Indonesia, Thailand’s daily minimum wage is still much lower compared to countries such as Singapore, the U.S., and Australia. The cost of living in Thailand is also approximately 35% cheaper than the average cost of living in the U.S., and 43% lower than the cost of living in Singapore.
Digital talent is in high-demand in Thailand with many companies expecting to improve their online presence. With that said, most companies that hire remote talent from Thailand look for full-stack/mobile developers, data scientists, UI/UX engineers, and sales associates.
While most Thais from the major economic hubs and tourist hotspots can understand and speak English, a good grasp of the Thai language as well as some knowledge of Thai culture may be necessary to help you navigate the complicated and bureaucratic nature of Thailand’s employment system. Alternatively, you can use Professional Employee Organizations (PEOs) like Multiplier to make the process of hiring your Thai talent easier for all parties involved.
When looking for the best places in Thailand to hire remote talent, you typically want to hire talent from the following regions:
These regions have a higher economic activity compared to the rest of Thailand, and have larger business hubs and more available English talent. Getting graduates from the following top universities in the country is also a plus:
Another way to hire talent is to post listings on popular job sites and portals or hire through a trusted recruitment agency. In Thailand, the most popular jobs portals are:
While the average daily minimum wage in Thailand ranges from THB 313 (USD 10) to THB 336 (USD 11), depending on the employee’s location, the average salary will depend on the nature of the job.
Here’s an approximation of the average monthly salary for six different positions:
But let’s put some more context into the average salary figures. A March 2019 brief on the topic of inequality, democratization, and class struggles issued by the World Inequality Lab, shows the following figures:
This brief further notes that Credit Suisse references Thailand as one of the countries with the highest levels of income inequality in the world. In 2016, the top 10% earners contributed to more than half of the national income, with the bottom income group (roughly 50% of the adult population) contributing a meager 13%.
For more information about income tax, you can visit this website here.
According to a 2018 study done by the Kasikorn Research Center, the Thai freelance market has continuous growth over the past five years, with an increase by 3.9% each year. By their numbers, roughly 1.9 million Thais work as freelancers and have contributed 4.8 billion baht (156 million USD) to the market.
While freelancing is quickly becoming a growing career trend in Thailand, one risk of hiring freelancers or independent contractors is their compliance with local tax laws. Without a local registered company withholding income tax for them, freelancers may fail or forget to pay their income tax. (See the other risks of hiring an independent contractor here.)
According to the Ministry of Labour, the maximum number of work hours a day is 8 hours, with a total of 48 hours per week. For employees who perform tasks that are deemed hazardous, the maximum number of work hours a day is 7 hours, with a total of 42 hours per week. A 1-hour break is mandatory for every period of work that lasts five consecutive hours or more. However, this can be broken up in increments or 20 or 30 minutes, depending on your employee.
While most Western countries work 8 hours a day from Monday to Friday, it is not unusual for Thais to work half days on Saturdays as well. Before hiring, you must agree to the employee’s working hours and specify the start and end times of each working day in the contract. Payment cycles are also predetermined in the contract with consent from both parties.
If employees work overtime, the local labor laws state that employees cannot exceed 36 hours of weekly overtime. The calculation for overtime pay is as follows:
If you require employees to work their regular hours such as 8-5 or 9-6 on a holiday, the overtime pay is twice their normal hourly rate. If they work beyond these hours, overtime pay is three times the normal hourly rate.
A break of at least 20 minutes must be given if overtime work lasts more than two hours.
13th month pay: Unlike countries such as the Philippines or Indonesia, a 13th month pay cycle is not mandatory in Thailand.
Annual Leaves: Every Thai employee is entitled to 6 days of annual leave once the employee has completed at least one year of service. However, it is not uncommon for Thai employers to provide their employees with more than 6 annual leaves; 10-15 is standard. If the employee has worked for less than one year, his or her annual leave is prorated.
If the employees do not use up their annual leaves or have remaining leaves available, employers can offer these leaves to be carried over to the next year. This is not mandatory as some Thai companies also practice otherwise.
Sick Leaves: Thai employees are entitled to up to 30 days of paid sick leave. If the employee takes more than three consecutive days of paid sick leave, the employer can choose to ask for a medical certificate from the employee. The number of paid sick leaves increases as the number of years of an employee’s social insurance contribution increases:
Maternity Leave: All female employees are entitled to take a maximum of 98 (inclusive of holidays) days maternity leave – this is inclusive of leaves taken for prenatal care. 45 days out of the 98 are fully paid by the employer. It is expected that the remaining days should be covered by the Thai Social Security Fund to which the employee has made consistent contributions.
Paternity Leave: While there is no law that mandates ‘expectant’ fathers to be given paid leaves, it is common practice in the Thai public sector to provide 15 days fully paid paternity leave. The private sector on the other hand, does not really follow the practice of paternity leaves.
Other Leaves: Thai employees are also entitled to other leaves at the discretion of the employee and employer, which include the following:
Insurance and social security: Thai law requires both the employee and employer to contribute at least 5% of the monthly salary to a social security fund on a monthly basis. There is a monthly salary base which is capped at THB 15,000, with the maximum monthly contribution from both the employee and the employer at THB 750 each.
The social security fund serves as insurance to help reduce financial risks when it comes to unemployment, sickness or injury, pregnancy, and childbirth. Employers are required to register all new employees with the local social security office and should inform the office on the employee’s resignation or termination.
Employer Payroll Tax:
Employee Payroll Tax:
With the exception of occupational accident security, both the employees and employers share the same percentage contributions for pension, health insurance, and unemployment security. The total employee contribution to social security is 5% of their monthly salary, whereas the employer’s total contribution can range from 5.2% to 6%.
While not mandated by law, it is quite common to provide non-taxable allowances for your remote employees, and it's expected by the employees. These can include stipends for business and equipment expenses, internet and telecom allowances, and even transportation allowance – if your remote employee works from a co-working space. If you work with a PEO platform like Multiplier, they can arrange for other benefits and allowances for your Thai employees for you.
To gain a competitive advantage, some Thai companies will not only offer more annual and sick paid leaves, but also provide their own supplemental health coverage for their employees. Alternatively, employers can also provide an insurance allowance or stipend for their employees.
Another benefit unique to Thailand is the non-mandatory Provident Fund. This fund is another pension contribution that helps promote retirement savings. While mandatory in other countries, Thai employees can choose to contribute 5-15% of their monthly salary to the Provident Fund. If they do so, employers must either match the contribution or pay more than what the employee is contributing.
Thailand has a total of 13 public paid holidays. While the number of holidays changes depending on the year, an employer must be aware of the holidays and announce at least 13 public holidays from the published list of public holidays provided by relevant authorities. If you require your Thai employee to work on a weekend, rest day, or holiday, refer to the table under FAQ #5 to calculate overtime payment. For an updated list of Thai holidays, click here.
If your business is registered in another country, the easiest way to hire a Thai remote talent would be through a Professional Employer Organization. PEO platforms like Multiplier make it easy for you to hire remote talent, comply with local labor laws, and pay your employees in time. Instead of having to jump through the legal and financial hoops of setting up a business entity in another country, Multiplier will act as your representative and abide by all the necessary laws for you.
If you want more details on how to hire a remote team legally, you can check out our article here.
While not explicitly mentioned in Thai law, probationary periods are quite common in Thailand as a means to avoid severance pay. What the law does specify is that employees who have worked for more than 120 days and are terminated without cause are eligible for severance pay. Due to this, some companies have probationary periods that last up at 119 days. If this is the case, a separate probation agreement may be agreed upon by the employer and employee.
The easiest way to pay your Thai remote talent would be through PEO platforms like Multiplier. It is mandated by Thai law that an employer pays wages to their employee at their workplace, usually in cash. The employee must give prior written consent if they will be paid via other methods (e.g. remittance to the employee’s bank account). With a PEO platform, you won’t have to worry about payroll or compliance with local taxes and labor laws as they will be taking care of everything for you.
Thailand does not have a strict payment cycle, and employers can choose to pay their employees either weekly, bi-weekly, or monthly. Take note that the payment cycle should be agreed upon by both the employer and the employee beforehand.
Generally speaking it is preferred to pay your Thai remote employees in their local currency. This helps make tax calculations and contributions to benefits such as healthcare, pension, and more easier.
Agreeing on a flat rate in Thai Baht is also beneficial in that it helps to avoid fluctuations in conversion rates. If you use a PEO platform like Multiplier, they will provide your Thai employee with a fixed rate, make sure your employee is paid in their local currency, and take care of the employee’s taxes as well.
An employer or employee can terminate the employment contract by providing an advance notice in writing to the other party. This is usually done 30 days in advance before the next pay day. Should the employer choose to terminate the contract immediately and without due notice, the employer must pay the wage that the employee would have received during the advance notice period.
The employer need not pay advance notice or severance pay if the termination is due to serious misconduct by the employee. This includes the following:
If the employee is not dismissed for any of the above reasons, they are entitled to severance pay following this structure:
A dismissed employee is also entitled to the following:
Upon the termination of the employee, the employer must inform the Social Security Office of the termination.