Planning to hire employees in Thailand? Here’s a quick guide

Employment in Thailand is on the rise. With the help of an Employer of Record (EOR), global organizations can hire employees in Thailand to expand their talent pool quickly and efficiently.

This guide covers key aspects that a business outside of Thailand, like a U.S.-based company, needs to know to hire in Thailand. 

We will walk you through the hiring methods, discuss where to source employees, best practices for onboarding, and employer obligations, including benefits and taxes.

How to hire employees in Thailand

We’re living in a globalized world where cross-border hiring is more accessible..

It’s possible to hire employees in many countries with the right approach.

If your business is foreign to Thailand, like a company registered in the U.S., and you want to hire employees in Thailand, you can either:

• Set up a legal entity in Thailand
• Hire contractors in Thailand
• Use an EOR in Thailand to hire employees

1) Setting up a legal entity in Thailand

Businesses must be registered in Thailand to hire even a single full-time employee. 

There are several reasons for this, to name just a few: 

• The employee’s work authorization
• The employer’s tax obligations
• Thai labor laws and protections

It’s not unheard of for foreign businesses to establish an entity in Thailand (typically a Thai Limited Company). These companies usually aren’t looking to move fast or flexibly in their hiring practices.

Establishing a local legal entity can be expensive and time-consuming. Plus, most of the paperwork is in Thai. 

Moreover, if you’re hiring non-Thai workers in Thailand (e.g., expats), then you’ll also be responsible for employees’ work visas and permits.

2) Hiring contractors in Thailand

Hiring independent contractors or freelancers is another way to hire in Thailand. 

It’s possible to hire contractors without a legal entity, but approach with caution. You need to carefully classify workers to mitigate legal trouble.

Two main types of employment are recognized in Thai labor law: 

• Contract for Work (independent contractors) 
• Contract for Services (full-time employees). 

An independent contractor is hired to work for your business short term and gets paid at the end of the project, rather than being on payroll. An employer is not legally allowed to control a contractor’s hours or place of work.

Thailand’s employment laws are strict on classification. Misclassification of workers makes your business vulnerable to legal and financial risk.

3) Using an Employer of Record in Thailand

To mitigate risk and reduce administrative effort, you can work with an Employer of Record. 

An EOR is a third-party entity that acts as the legal employer in Thailand while your company manages the day-to-day work. 

An EOR will already have a legal entity established in Thailand and will use this entity to set up employment in Thailand. 

For instance, if a U.S.-based company uses an EOR to hire employees in Thailand, they can typically do the following without having to set up a local entity:

• Employee onboarding & offboarding
• Payroll & Taxes
• Benefits administration (Localized insurance etc.,)
• Legal compliance
• Work visas & permits
• Talent discovery
• Background checks
• Device & office space facilitation

They can help international businesses hire and pay full-time employees and contractors in compliance with local laws.

This route is ideal for businesses looking for a flexible and scalable way to hire employees in Thailand. 

Where to find employees in Thailand

Companies outside of Thailand need to know where to source talent. Here are some options to explore while recruiting.

1) Popular job boards in Thailand

Job boards and platforms are used by Thai job-seekers and potential employers alike. Here are a few of the most popular places to post ads for employment in Thailand:

• ThaiJob
• JobThai
• JobsDB
• LinkedIn

However, most job boards are written in Thai, so get your job listing checked by a native speaker before posting it, if you can. Or stick to LinkedIn, where English is more widely used.

2) Working with local recruitment agencies

A local recruitment company can help you source potential candidates and overcome the language barrier. 

However, not all recruitment agencies are created equal. Ask around in your professional network for a recommendation. And be sure to ask about the (potentially hidden) costs of hiring employees in Thailand. 

Fees for sourcing employees in Thailand may be prohibitive for a small team.

3) Recruiting through an EOR

An EOR service in Thailand may offer to assist you with sourcing and recruiting talent in Thailand as an additional service. 

You still meet, assess, and ultimately decide on the right talent for your team. 

An EOR simply assists with discovering the talent for interviews and then supports with handling the administrative tasks of contracting, onboarding, payroll, and compliance.

Onboarding employees in Thailand

Proper onboarding is essential in a remote and hybrid work environment. It helps with the smooth integration of new hires. 

Here’s what onboarding involves in Thailand:

• Background checks and offer of employment: Thai employers can opt to check a candidate’s employment history, work authorization (visas and permits), and criminal record before making a job offer. Once this is all clear, you should put together an offer letter and official contract (more on this in the next section).
• Employee documentation: Companies should request a copy of the worker’s ID or passport, address, and education/employment certificates. Store these securely, in compliance with Thai data protection laws.
• Social Security Office registration: Employers must contribute 5% of a full-time employee’s wages to the Social Security Fund. Registration with the fund must happen in the employee’s first 30 days and is the employer’s responsibility.
• Equipment and onboarding materials: Full-time employees may be provided with the equipment necessary for their role. Contractors should not be provided with this under Thai labor law. Onboarding materials can be shared with any classification of worker. These materials provide information and context on the role and how to perform it.
• Necessary training: Does the worker have any skill gaps to fill? How can you make them feel ready and confident to start work?
• Meeting the team: Depending on the location of your team, a good onboarding program includes a quick (digital) introduction to other staff and collaborators.
• Payroll, benefits, and leave systems: Giving workers self-service access to a payroll portal, benefits platform, and leave-booking system will save you and your team time.

Under Thai employment law, an employer must also clarify working days, hours, and allocated rest periods. 

Onboarding is the ideal opportunity to communicate your company’s policies to each employee to prevent confusion later on.

Key employment laws and requirements in Thailand

Thailand’s employment laws are detailed across multiple acts and policies. Below are the key requirements an employer should understand to hire employees in Thailand.

1) Employment contracts

It’s best practice to provide all new hires with a written employment contract. Ideally, the contract should be written in Thai for Thai workers and in English for expats and other foreign workers.

A contract helps define the terms of employment, clarify roles and responsibilities, and ensure you have a standardized approach to hiring. A written contract can be used as evidence of a worker’s classification should you need to prove this at any time.

2) Employee benefits

Classification plays a role here, too. You must provide full-time employees access to their legally mandated benefits and leave. Independent contractors do not have the same legal right to benefits.

It is a legal requirement for employers to contribute to Thailand’s Social Security Fund (SSF). Both the employer and the employee contribute 5% of the worker’s monthly salary.

In terms of leave, an employer must provide full-time employees in Thailand with:

• Vacation time: Thai employees are entitled to a minimum of 6 days of paid vacation time per year, once they’ve completed 1 year of continuous service.
• Public holidays: Employees are entitled to a minimum of 13 paid public holidays per year.
• Sick leave: Employees in Thailand are entitled to unlimited sick leave, with up to 30 days of paid sick leave.
• Maternity leave: New and soon-to-be moms in Thailand get 98 days of maternity leave. 45 days of which are paid at 100% wage (by the employer).

The above are just the legal requirements for a leave policy in Thailand. Employers can choose to offer above the legal minimum to attract and hire employees in Thailand.

3) Working hours and holidays

Under Thai law, an employee may be required to work up to 48 hours per week (and 8 hours per day) before overtime becomes applicable. 

Overtime is capped at 36 hours and is paid at 1.5 times the employee’s normal wage.

By law, employees are entitled to 1 day off per week once they have completed their core hours.

4) Employer’s tax obligations

Both the employer and the employee have tax obligations under the laws governing employment in Thailand. 

These obligations differ between full-time employees and independent contractors, so be sure to classify workers correctly when you hire employees in Thailand.

• Personal income tax (PIT): The employer is responsible for withholding a full-time employee’s personal income tax (PIT) from their monthly pay. PIT rates scale ranges between 0 to 35% based on how much money the employee earns.
• Social Security Fund (SSF) contributions: The employer must register each full-time employee with the Social Security Office and contribute 5% of their monthly salary, up to 375 baht per month. Registration must be completed within 30 days of the employee’s start date.
• Corporate income tax (CIT): 20% is the standard corporate income tax rate in Thailand for organizations with net profits exceeding 3 million baht (around $92,000). There are some exceptions and variations in CIT based on company size, revenue, and structure.

5) Termination and severance

For independent contractors, the contract typically ends when the project is completed or the deliverables are fulfilled. 

Thai employment law protects full-time employees from unfair or illegal termination or dismissal, including:

• Legal notice period: In most cases, employees are entitled to 1 day’s notice and pay. An employee cannot be asked to perform or provide a notice period of longer than 3 months.
• Severance pay: In the case of redundancy or a termination without cause, employees are entitled to severance pay based on their time of service:
  • 120 days to less than 1 year: 30 days’ wages
  • 1 to less than 3 years: 90 days’ wages
  • 3 to less than 6 years: 180 days’ wages
  • 6 to less than 10 years: 240 days’ wages
  • 10 years or more: 300 days’ wages

Learn more about how to pay employees in Thailand.

Hire employees in Thailand with Payoneer Workforce Management

Hiring overseas is a good growth strategy for small, medium, and enterprise businesses, but it can get complicated. Between local labor laws, working practices, payroll and currency conversions, and another country’s tax system, it’s a lot to take on. 

And if Thailand isn’t the only country you want to hire in, then you’ll have to repeat the process over and over. That’s where Payoneer Workforce Management comes in.

We help companies employ full-time employees and independent contractors in 160+ countries.

Our unified platform helps companies:

• Onboard new hires quickly and compliantly without a local entity
• Simplify global payroll processes 
• Help stay compliant with local employment laws 
• Manage taxes, benefits, work permits, timesheets, background checks, and more

From hiring in days to multi-currency payroll, Payoneer Workforce Management offers a comprehensive solution businesses need to hire, pay, and manage a growing, global team. 

Book a demo to learn how Payoneer Workforce Management can help you hire in Thailand.

FAQs about how to hire in Thailand 

1) What are the working hours in Thailand?

Thai workers can work a maximum of 48 hours per week and up to 36 hours of overtime. Additionally, employees in Thailand are entitled to 1 hour of rest time for every 5 working hours and 1 rest day per week.

2) What is the minimum wage in Thailand?

Thailand’s minimum daily wage ranges from 330 to 370 Baht/day depending on the region.

3) How can an EOR help U.S. companies hire in Thailand?

An Employer of Record (EOR) is a third party with established legal entities in countries across the world. These entities can be used to hire employees and contractors on the client company’s behalf. The company remains in control of managing the workers’ day-to-day activities, while the EOR handles legal and compliance responsibilities for recruitment, contracting, payroll, and other related matters.