PEO Thailand

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Global PEO in Thailand

Thailand has emerged as an attractive country for Professional Employer Organization (PEO) services, becoming a preferred destination for businesses seeking to expand their global operations. With its vibrant economy, strategic location in Southeast Asia, and business-friendly policies, Thailand offers a conducive environment for foreign companies to set up their presence. By partnering with a PEO in Thailand, organizations can benefit from streamlined HR and employment processes, enabling them to focus on core business activities without the burden of navigating complex labor laws and compliance issues. Additionally, Thailand’s skilled and diverse workforce, coupled with a robust infrastructure, enhances the country’s appeal as a PEO destination, fostering further business growth and success for international enterprises seeking to tap into the region’s potential.

What Is a PEO?

A PEO, or Professional Employer Organization, is a company that provides a range of HR and payroll services to small and medium-sized businesses. These services can include employee benefits, payroll, compliance with labor laws, and recruiting and training.

PEOs work by entering into a co-employment agreement with the businesses they serve. In this arrangement, the PEO becomes the employer of record for the business’s employees, taking on responsibilities such as payroll, tax withholding, and employee benefits. The business, however, retains control over its day-to-day operations and the supervision of its employees.

PEOs can help businesses streamline their HR and payroll processes, reduce costs, and free up time and resources to focus on their core business activities. They can also provide access to a range of benefits and resources that small businesses may not be able to afford or manage on their own.

PEOs are also understood as employer of record / EOR at times.

Thailand – Country Overview

Thailand is a country in Southeast Asia, with Bangkok as its capital. The country is a popular tourist destination and Thai cuisine is well-known around the world. Its beaches and resorts are popular amongst both foreigners and locals.

Capital City

Bangkok

Currency

Thai Baht (฿)

Language

Thai

Government

Constitutional Monarchy

Employment Contracts in Thailand

In Thailand, an employment contract can be either in writing or verbal.

However, Thailand’s labor law does not require that all employment contracts be in writing.

Some of the details typically mentioned in the written employment  contract in Thailand include:

• Employment or working conditions
• Employee welfare benefits
• Termination condition
• Petition procedure
• and more

The different types of employment relationships are:

• Permanent Employment: Unless specified in the employment contract, employment in Thailand is deemed indefinite.
• Fixed-Term Contracts: Per Thailand’s law, fixed-term contracts should not exceed 2 years.
• Temporary Employment: Thailand’s labor law does not specifically address the issue of temporary work agency employment. Per the Labour Protection Act, a user company is responsible as an employer for the workers of a temporary agency when they are employed in an essential part of the user company’s business.

Probationary Period

In Thailand, a probationary period lasts up to 119 days.

Working Hours in Thailand

Thailand’s labor law states that a usual working day lasts 8 hours and cannot exceed 9 hours. The total standard working hours per week cannot exceed 42 hours.

Employee Leave in Thailand

Employees in Thailand are entitled to the following leaves:

• Annual leave in Thailand: Per Thai labor law, an employee is entitled to at least 6 days of annual leave after working for the same employer for an uninterrupted period of 1 year. The employer must either fix the employee’s leave days in advance or reach an agreement with the employee regarding the leave days.
• Maternity leave in Thailand: Female employees are entitled to no more than 90 days of maternity leave for each pregnancy.
• Sick leave in Thailand: Per the labor law of Thailand, employees are entitled to up to 3 days of sick leave without the need for a certificate from a physician or medical establishment. If an employee wishes to take more than 3 days of paid sick leave, they must provide their employer with a certificate detailing the illness or injury.
• Paternity leave in Thailand: In the private sector, Thailand’s labor law makes no provision for paternity leave. Employees in the government sector are entitled to paid paternity leave for up to 15 consecutive working days, which must be taken within 90 days of the birth.

The following are the statutory national holidays in Thailand:

• January 1 – New Year’s Day
• February 12 – Chinese Lunar New Year’s Day
• February 26 – Makha Bucha
• April 6 – Chakri Day
• April 12 – Songkran Holiday
• April 13 – Songkran
• April 14 – Songkran
• April 15 – Songkran
• May 1 – Labor Day
• May 3 – Labor Day observed
• May 4 – Coronation Day
• May 10 – Royal Ploughing Ceremony Day
• May 26 – Visakha Bucha
• June 3 – Queen Suthida’s Birthday
• July 24 – Asalha Bucha
• July 25 – Buddhist Lent Day
• July 26 – Asalha Bucha observed
• July 28 – King Vajiralongkorn’s Birthday
• August 12 – The Queen’s Birthday
• September 24 – Mahidol Day
• October 13 – Anniversary of the Death of King Bhumibol
• October 23 – Chulalongkorn Day
• October 25 – Chulalongkorn Day observed
• December 5 – King Bhumibol’s Birthday/Father’s Day
• December 6 – King Bhumibol’s Birthday/Father’s Day observed
• December 10 – Constitution Day
• December 31 – New Year’s Eve

Taxation

In Thailand, employers withhold employees’ tax contributions from their salaries. That means you’d be responsible for deducting tax from your employees’ paychecks and sending that to the Thai government. 

Also, employers are mandated to contribute to the Workmen’s Compensation Fund. The amount varies between 0.2% and 1% of salary for each employee. The range depends on the level of risk for the role and the employer’s previous safety record.

There are 13 official paid holidays in Thailand. Though workers typically work a 38-hour week, many companies require shifts for half-days on Saturdays. Overtime is paid at a minimum of 150% of salary on normal working days, 200% for normal working hours on holidays, and 300% for overtime on holidays.

It’s not mandatory, but it’s common courtesy in Thailand to provide 30 days’ notice for termination. Severance compensation depends on the employee’s time with the company. It starts at 30 days’ pay for those with more than 120 days of service and moves up through six bands to 400 days’ pay for those with at least 20 years’ service.

It’s a lot to take in, right?! That’s why so many businesses choose to partner with PEOs who are experts in the process of hiring and managing employees in Thailand. It’s not just about reducing your workload; it’s about the peace of mind knowing you’re complying with local laws. 

Employee Termination in Thailand

According to Thai labor law, if a termination date is specified in the employment contract, the employer is not required to provide advance notice of dismissal. Where no period is specified in the employment contract, either the employer or the employee may terminate the employment contract. The advance notice period in Thailand need not be longer than three months.

Global Mobility in Thailand

There are typically the following categories of visas in Thailand:

• Non-quota immigrant visas
• Transit visas
• Non-immigrant visas
• Tourist visas
• Courtesy visas
• Official visas
• Diplomatic visas

To work in Thailand, foreigners must obtain a work permit from the Director-General of Labor. An employer who wishes to hire a foreigner as an employee must apply for the permit and pay the applicable fees. To apply for a work permit in Thailand, foreigners must first obtain a non-immigrant visa.

Employee Benefits in Thailand

Thailand has a mandatory social security scheme known as the Social Security Fund, which is overseen by the Ministry of Labor and Social Welfare. The Social Security Fund provides insured employees with retirement benefits in the form of a monthly superannuation pension or a lump-sum allowance (superannuation gratuity).

Some examples of social insurance programs in Thailand are:

• Dependents’/Survivors Benefit: The Social Security Fund of Thailand pays benefits to survivors in the event of an insured person’s death that is not the result of a work-related accident or disease, provided that the deceased paid contributions for at least one month in the 6 months preceding their death. Surviving employees may include their parents, spouses, or children.
• Life and Disability Insurance/Benefit: The Social Security Fund in Thailand provides life and disability benefits to insured persons who have paid contributions for at least 3 months in the 15 months preceding the onset of disability, provided that the reasons for disability are not work-related.