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Country Introduction – Thailand:
Capital – Bangkok
Currency – Thai Baht
GDP – 505.95 billion USD (2021)
Language – Thai
Major Religion – Theravada Buddhist
Population – 71,697,030 (2022)
Thailand’s economic growth is on the rise, positioning it as the second strongest performing economy in Southeast Asia. Thailand has achieved impressive advancements in both societal and economic growth within the past forty years, transitioning from a low-income nation to an upper middle-income status in under a single generation. Thailand is frequently praised as a remarkable example of successful development, given its consistent economic expansion and notable decrease in poverty rates.
Thailand’s economy is diversified, encompassing various sectors such as agriculture, manufacturing, tourism, services, and natural resources. The key areas of growth for its economy are centred around tourism, automotive and food manufacturing, which are facilitated by its efficient transportation system, infrastructure and communication networks.
Contract of Employment
An agreement on employment establishes a connection between the employer and employee. Thailand abides by the Freedom of Contract principle, wherein a contract will be considered valid if both parties have consented to it, and it does not violate public order or ethics. The agreement may be expressed through either written or spoken communication. It can be broadly categorized into two main types: fixed-term and open-ended.
Probationary Period generally last for three months (90 days) and up to 119 days. There is no mandatory minimum in the duration of probation. The probation period may vary from shorter to longer and can be extended if both parties reach a mutual understanding.
An employer must inform at least 30 days in advance of the said termination and must do so on Pay Day, unless they have serious cause for termination. The Thai Labor Protection Act has a clear and specific definition for significant reasons. If your employers want to let you go without a valid reason, they are required to adhere to the 30-day notice policy, unless otherwise stated in your employment agreement.
Certain job agreements may specify a notification period of either 60 or 90 days prior to termination. The minimum duration is always 30 days. If the employment contract does not have a clause for ending the agreement, then Thai Law will enforce a 30-day notice period.
Eight hours daily, or 48 hours weekly. For hazardous work, the time commitment is reduced to seven hours per day and 42 hours per week. After working for five consecutive hours, all employees have the right to take a one-hour break every day.
An employer is permitted to demand an employee to work overtime solely in cases of urgency or when the job necessitates it to be done consistently. If an employee works beyond their regular work hours, they are eligible for 1.5 times their usual pay. On a holiday, when working beyond the usual working hours, the payment rate is three-fold of the regular pay.
13th Month Pay
13th month pay cycle is not mandatory in Thailand. However, it is a common practice for employers to provide payment for the thirteenth month.
After completing a full year of uninterrupted employment, an individual is eligible for an annual vacation lasting a minimum of six working days and will receive compensation equivalent to their regular daily wage rate. Individuals who have been employed for less than a year are eligible for a pro-rated annual vacation, as determined by the employer.
Workers have the right to take time off when they are unwell, provided that they are genuinely ill. However, if an employee’s illness spans more than three days, their employer can request that they furnish a medical certificate issued by a qualified doctor or an authorized medical center. In a year, a worker has the privilege to avail of sick leave for a maximum of 30 days.
Maternity and Paternity Leave
An expectant mother can take up to 98 days, which includes holidays, as her maximum entitled maternity leave. The leave encompasses the duration allocated for receiving prenatal medical attention. During her leave, the pregnant mother will be entitled to an equal salary for a duration of 45 days.
Public sector workers can take up to 15 days of paid leave within one month of their child’s birth. There will be no remuneration for officials who take additional leave to attend to the needs of their babies. While there is no law in the private sector mandating paternity leave, businesses have the option of offering it as either compensated or uncompensated leave.
VAT / GST:
At present, the normal value-added tax (VAT) rate is 10%, nevertheless, until September 30, 2023 (unless the administration decides to extend it), the rate has been reduced to 7%. Value-added tax is applied to the transaction of products and the delivery of amenities.
|Less than 150,000 THB
|More than 4,000,000 THB
Employer/ Employee Contributions
In Thailand, it is mandatory for all workers to contribute 5% of their salary into a social security fund, with an upper limit of 750 THB per month. The stipulation mandates that employers must make an equal contribution.
The employer contribution is between 5% minimum for social security but all the other contributions are not mandatory.
The Thai government regulates public holidays, which are commonly observed by both private and public entities. There are a variety of official and unofficial observances, both national and international, that are celebrated to different extents across the country.
January 1 – New Year’s Day
February – Thai Lunar Month
April 6- Chakri Memorial Day
April 13 – 15 – Songkran Festival
May 4 – Coronation Day
May – Royal Ploughing Ceremony and Farmer’s Day
May – Thai Lunar Month
June 3 – Queen Suthida’s Birthday
July 28 – King’s Birthday
July – Thai Lunar Month
August 12 – The Queen Mother’s Birthday
October 13 – King Bhumibol Adulyadej Memorial Day
October 23 – King Chulalongkorn Day
December 5 – King Bhumibol Adulyadej’s Birthday
December 10 – Constitution Day
December 31 – New Year’s Eve
The rates of severance pay in Thailand are as follows:
|Rate of severance pay
|120 days but less than one year
|One year but less than three years
|Three years but less than six years
|Six years but less than 10 years
|10 years but less than 20 years
|20 years or more
Work and Residence Permits (Expatriates)
In order for a foreign national to be employed in Thailand within the bounds of the law, he or she must seek out a work permit. A valid legal document that identifies the job title, occupation as well as the current employment position of a non-native individual alongside the name of the Thai organization they are affiliated with is known as a work permit. It functions as permission to carry out a foreigner-permissible job or profession within Thailand.
Irrespective of their visa category, foreigners are not allowed to engage in employment activities in Thailand unless they obtain a work permit. In order for a foreigner to obtain a work permit in Thailand, they must first obtain a non-immigrant visa. It is necessary to acquire a non-immigrant visa prior to arrival in Thailand.
After obtaining a non-immigrant visa, the foreigner can initiate the visa application process for a work permit. It will require a total of 7 working days to complete the process for obtaining a work permit. The Ministry of Labor office is where the processing of work permit application takes place.
As long as an individual possesses a non-immigrant or resident visa, acquires an eligible employer to furnish the necessary work permit documentation, and enlists in an occupation open to foreigners, then they are capable of applying for a work permit.