Hire employees in Thailand using an Employer of Record

You need someone in Thailand by next quarter. Your lawyer just said entity setup takes 6 months minimum. The math doesn't work.

Meanwhile, your competitor's already building their Bangkok team while you're stuck in legal limbo. Thailand's tech scene is booming, salaries are rising 15-20% annually, and the best candidates won't wait around for your paperwork to clear.

Here's the reality: you've got three ways to hire in Thailand, and only one makes sense if you need to move fast.

Option 1: Set up your own entity

• Cost: €15,000-40,000 upfront, €8,000-12,000 annual maintenance
• Timeline: 4-6 months minimum
• Complexity: Thai Board of Investment approvals, work permit quotas, mandatory Thai shareholders
• Makes sense when: Hiring 20+ people long-term, permanent market presence

Option 2: Hire contractors

• Cost: None upfront, but limited control
• Timeline: Immediate
• Risks: Misclassification fines (€5,000+), back taxes, automatic employee conversion
• Makes sense when: Short projects (< 6 months), specialized skills
• Note: Hire with Columbus also handles contractor agreements and payments

Option 3: Use an employer of record (Recommended for most)

• Cost: $179/month per employee
• Timeline: 2-3 days to hire
• Complexity: None - we handle everything
• Makes sense when: 1-50 employees, testing markets, multi-country teams

If you're hiring 1-10 people, entity setup costs more than 4-5 years of EOR fees ($179/month = $2,148/year per employee vs €15,000+ upfront). An EOR like Hire with Columbus handles employment contracts, payroll, taxes, mandatory benefits, and compliance updates so you can focus on growing your team, not managing Thai labor law.

Ready to hire in Thailand without the headaches? Get started with Hire with Columbus.

What employment types can you use?

You've got three ways to bring someone onboard in Thailand. Here's how the costs and risks compare.

Setting up your own entity runs €35,000-45,000 upfront plus 8-12 months of legal paperwork. Hiring contractors seems cheaper until Thailand's labor authorities hit you with misclassification fines up to ฿500,000 ($14,000 USD). Using an employer of record costs $179/month per employee and gets you compliant in 2-3 days.

Let's break down your options so you can pick the right one for your situation.

How can you hire in Thailand?

Here's the decision framework that actually matters:

Setting up your own entity makes sense if you're planning to hire 20+ people and stay in Thailand long-term. You'll need a registered office, minimum capital of ฿2 million ($56,000), and foreign business license approval. The ongoing costs hit hard too - accounting, payroll systems, HR infrastructure, and annual compliance fees add up to €15,000-25,000 yearly.

Hiring contractors works for genuine freelance work, but Thailand's labor courts don't mess around with misclassification. If you control their schedule, provide equipment, or integrate them like employees, you're looking at back taxes, social security contributions, and penalties. The Department of Labour Protection and Welfare has been cracking down since 2024.

Using an employer of record (that's us) means Hire with Columbus becomes the legal employer while you manage day-to-day work. We handle contracts, payroll, taxes, benefits, and compliance for $179/month per employee. Five employees costs $895/month - way less than entity setup costs, and you're hiring this week instead of next year.

Employment contract types in Thailand

Once you've decided on your hiring approach, you need to pick the right contract type. Thailand recognizes four main employment arrangements:

Permanent contracts are your go-to for full-time core roles. No end date, standard benefits, and the employee gets job security. Most companies use these for roles they expect to last more than two years. Termination requires proper notice and severance pay based on tenure.

Fixed-term contracts work for specific projects or temporary coverage. Maximum 2 years initially, renewable once for another 2 years. After that, Thai law automatically converts them to permanent contracts whether you want it or not. Use these when you genuinely need someone for a defined period.

Part-time contracts cover anyone working less than 8 hours daily or 48 hours weekly. These employees get prorated benefits and social security coverage. Popular for customer service roles or specialized consulting work. You still need to follow minimum wage rules and provide statutory leave.

Probationary periods can be added to any contract type, maximum 119 days. During probation, either party can terminate with just one day's notice. After probation ends, normal notice periods kick in (30 days for monthly-paid employees).

Here's what works for different situations:

Contract language requirements: All employment contracts must be in Thai, though you can include English translations. The Thai version takes legal precedence if there's any dispute. Contracts need to specify salary, working hours, job duties, probation period (if any), and termination conditions.

When you use Hire with Columbus, we draft compliant contracts in both languages and handle all the legal requirements. You focus on finding great people - we make sure the paperwork protects everyone involved.

How does payroll and taxation work?

Your €60,000 employee actually costs €78,600 per year in Thailand. The 31% markup comes from employer social contributions, taxes, and mandatory benefits that many companies forget to budget for.

Thailand's payroll system runs on monthly cycles with some specific quirks you'll need to plan for. Employees expect their salary by the last working day of each month, and you'll need to factor in a 13th-month bonus equivalent during the year.

Income tax brackets

Thailand uses a progressive tax system that starts relatively low but climbs quickly for higher earners:

The good news? Thailand offers decent personal allowances that reduce taxable income. The standard personal allowance is 60,000 THB (€1,560) annually, with additional deductions available for dependents and certain expenses.

Social security contributions

Thailand's social security system splits costs between employer and employee, but you'll carry the heavier load:

What makes Thailand different: social security contributions are capped at a relatively low amount. Once an employee earns 15,000 THB (€390) per month, both employer and employee contributions max out at 750 THB (€19.50) monthly.

This cap is actually helpful for higher-paid employees since it keeps social costs predictable. A €30,000 salary and a €80,000 salary both trigger the same maximum social security contribution.

Payment schedule and bonuses

Thailand follows a strict monthly payroll cycle. Salaries must be paid by the last working day of each month, and there's no flexibility here. Late payments can trigger immediate labor complaints.

Most Thai employees expect a 13th-month bonus, typically paid during the traditional New Year period in April (Songkran). While not legally required, it's so standard that skipping it will hurt your ability to attract talent.

You'll also need to budget for these additional payments:

• Overtime pay at 1.5x regular rate for hours beyond 8 per day
• Holiday pay for work on public holidays (3x regular rate)
• Annual leave payout if unused leave exceeds legal minimums

Total employment cost breakdown

Let's break down what a €60,000 annual salary actually costs you in Thailand:

Base salary: €60,000 Employer social security: €234 (capped at maximum) Workmen's compensation: €468 (assuming 0.78% average rate) 13th month bonus: €5,000 Mandatory benefits estimate: €2,898 Total annual cost: €68,600

That's a 14.3% markup on the base salary. Much lower than many European countries thanks to Thailand's contribution caps.

For comparison, different salary levels scale like this:

Payroll filing deadlines

Thailand's tax calendar is unforgiving. Miss these deadlines and penalties start immediately:

• Monthly withholding tax: Due by 7th of following month
• Social security contributions: Due by 15th of following month
• Annual tax reconciliation: Due by March 31st
• Half-yearly tax filing: Due by August 31st (for certain companies)

The withholding tax deadline is particularly tight. If the 7th falls on a weekend, the deadline doesn't extend. You need to file by the preceding business day.

Late filing penalties start at 1.5% per month of the tax owed, plus potential criminal charges for repeated violations. The Revenue Department doesn't send reminder notices.

Common payroll mistakes

Most companies stumble on these Thailand-specific requirements:

Wrong tax residency calculations: Thai tax law considers anyone present in Thailand for 180+ days per year a tax resident. Many companies miscalculate this for expat employees and under-withhold taxes.

Missed social security registrations: New employees must be registered within 30 days of starting work. Late registration triggers backdated contributions plus penalties.

Incorrect overtime calculations: Thailand requires overtime pay for work beyond 8 hours per day, not just 40 hours per week. Many payroll systems default to weekly calculations and miss daily overtime.

Holiday pay errors: Working on Thai public holidays requires triple pay (3x regular rate), not the double pay common in other countries. Budget for essential coverage with this in mind.

Benefits tax treatment: Some benefits that are tax-free in other countries (like transportation allowances over 600 THB monthly) are taxable in Thailand. This catches many international companies off guard.

---

Setting up payroll in Thailand yourself:

• Local accounting firm: €800-1,200/month
• Payroll software: €150-300/month
• Compliance risk: Fines up to €15,000 for tax violations
• HR expertise needed: €45,000+ annual salary

With Hire with Columbus: $179/month per employee, fully compliant, zero penalty risk. We handle all tax filings, social security registrations, and regulatory changes automatically.

What benefits and leave are required?

Thailand employees get 6 days minimum vacation after one year of work, but most companies offer 10-15 days to stay competitive. The catch? Unused vacation doesn't automatically carry over – you either let employees use it or pay them out when they leave.

Beyond vacation, you're looking at three mandatory benefits that'll add about 10-15% to your employment costs: social security, workmen's compensation, and provident fund contributions. Skip these and you're facing penalties starting at 20,000 THB per violation.

Annual vacation leave

New employees earn 1 day of vacation per month worked in their first year, capping at 6 days total. After completing one full year, they get the full 6 days upfront each year.

Here's where it gets tricky: Thai law doesn't require vacation carryover, but many companies allow up to 30 days to accumulate. When employees leave, you must pay out unused vacation at their current daily wage rate.

Most competitive companies offer:

• 10-12 days for new hires
• 15-18 days after 3-5 years
• 20+ days for senior roles

Sick leave entitlements

Employees get up to 30 business days of sick leave per year – that's 6 weeks if they need it. No doctor's note required for the first 3 consecutive days, but anything longer needs medical certification.

Who pays what:

• Days 1-3: Employer pays full salary
• Days 4-15: Social Security Fund pays 50% of daily wage
• Days 16-30: Social Security Fund continues at 50%

The Social Security Fund reimburses you for days 4+, but you'll need to file the paperwork correctly. Miss the 30-day filing deadline and you're stuck paying out of pocket.

Parental leave breakdown

Maternity leave: 98 days (about 14 weeks) at full pay for the first 45 days, then 50% pay from Social Security for the remaining 53 days. Mothers can take this leave starting 30 days before their due date.

Paternity leave: 15 days at full pay, which must be taken within 60 days of the child's birth. This increased from 5 days in early 2025, so make sure your policies are updated.

Adoption leave: Same as maternity – 98 days total with the same payment structure.

Thailand public holidays 2025

Thailand has 16-18 public holidays depending on lunar calendar dates and government announcements. Employees who work these days get double pay.

Note: Buddhist holidays follow the lunar calendar, so dates can shift. The government typically announces the final holiday schedule in December for the following year.

Mandatory benefit contributions

Social Security Fund: 5% each from employer and employee (capped at 750 THB monthly per person). Covers healthcare, disability, unemployment, and partial sick leave.

Workmen's Compensation Fund: 0.2-3% of payroll depending on your industry risk level. Tech companies usually pay 0.2%, while construction hits the 3% maximum.

Provident Fund: Not legally required but tax-advantaged. Most companies contribute 3-5% if employees match it. You'll save on corporate taxes, and employees get retirement savings.

Annual bonus: While not legally mandated, 95% of Thai companies pay a 13th-month bonus. Budget for at least one month's salary as a year-end bonus to stay competitive.

Competitive benefits beyond minimums

Health insurance: Basic social security healthcare exists, but private insurance is standard. Budget 15,000-25,000 THB annually per employee for decent coverage.

Life insurance: Usually 1-2x annual salary, costs about 0.5-1% of payroll.

Transportation allowance: 2,000-4,000 THB monthly is common, especially in Bangkok where commuting costs add up.

Meal allowances: 100-200 THB per working day, often provided as vouchers or cafeteria credits.

Common benefit compliance mistakes

Missing social security registration: You have 30 days to register new employees. Late registration means 20,000 THB fines plus back-payments with interest.

Incorrect wage reporting: Social security contributions calculate on actual wages, including overtime and bonuses. Underreporting saves money short-term but creates huge liabilities during audits.

Provident fund setup errors: If you offer a provident fund, it must be properly registered with the Revenue Department. DIY setups often miss tax requirements, costing employees their tax benefits.

Holiday pay calculation mistakes: Double-time for holidays applies to the base daily wage, not including allowances. Get this wrong and you'll face Department of Labor complaints.

Administering these benefits correctly requires local HR expertise (1.5-2 million THB annual salary), benefits software (15,000+ THB monthly), and legal review (200,000+ THB yearly). Miss compliance deadlines and penalties start at 20,000 THB per violation.

Hire with Columbus handles all benefit administration, social security filings, and compliance monitoring for $179/month per employee. We register employees on day one, calculate contributions correctly, and file all required reports on time.

What are the compliance requirements?

Written contracts are mandatory in Thailand within 30 days of employment start. Skip this deadline and you're looking at potential fines plus the employee can claim verbal promises as binding terms.

Thailand's Labor Protection Act doesn't leave much wiggle room on employment compliance. Get the basics wrong and you'll face government penalties, potential lawsuits, and expensive do-overs that could've been avoided.

Employment contract requirements

Every employment contract in Thailand must be written in Thai or include a certified Thai translation. The contract needs to specify job duties, salary, working hours, workplace location, and termination conditions.

Mandatory clauses include probation period length, overtime rates, annual leave entitlement, and grounds for termination. Missing any of these can void the contract entirely, leaving you exposed to claims.

You don't need to register standard employment contracts with the government, but certain industries like construction or domestic work have additional filing requirements. When in doubt, check with the Department of Labor Protection and Welfare.

Probation periods

Standard probation in Thailand runs 119 days (just under 4 months), though many companies use 90 days to stay conservative. The absolute maximum is 119 days - go longer and it's automatically invalid.

During probation, either party can terminate with just one day's notice. After probation ends, full employment protections kick in and termination becomes much more complex and expensive.

Working time regulations

Maximum working hours are 8 per day and 48 per week. Overtime kicks in after 8 daily hours, paid at 1.5x regular rate on weekdays and 2x on weekends and holidays.

Employees get a 1-hour lunch break (unpaid) and 15-minute rest breaks for every 4 hours worked. You must keep detailed time records - labor inspectors will ask for them during audits.

Night shift work (10 PM to 6 AM) requires additional compensation and health considerations for certain roles.

Notice periods

Notice periods are minimums - you can always give more. Payment in lieu of notice is allowed if both parties agree in writing.

Termination process

Terminating for cause requires documented evidence and often a warning process. Valid reasons include misconduct, poor performance after coaching, or violation of company policies.

For redundancies, you need to prove business necessity and follow selection criteria fairly. Some terminations require approval from the Labor Protection and Welfare Committee, especially for union members or pregnant employees.

Immediate dismissal is only allowed for serious misconduct like theft, violence, or criminal activity. Even then, you need solid documentation.

Severance pay

Severance is required for all terminations except resignation, termination for serious cause, or end of fixed-term contracts. It's based on the last salary rate including regular allowances.

Data protection requirements

Thailand's Personal Data Protection Act (PDPA) follows GDPR principles. You need explicit consent to collect employee data and clear policies on data use, storage, and sharing.

Employee files must be kept secure with access limited to HR and direct managers. Data breaches must be reported to authorities within 72 hours, and affected employees must be notified.

Cross-border data transfers require additional safeguards, especially when sending employee information to parent companies abroad.

Common compliance mistakes

Invalid employment contracts happen when companies use English-only agreements or miss mandatory clauses. This voids the contract and exposes you to claims for verbal promises.

Wrong termination processes are expensive - skipping required notice periods or failing to document performance issues properly. Employees can challenge dismissals and often win.

Missing overtime calculations catch many companies off guard. Thailand's overtime rules are strict, and back-pay claims can add up quickly.

Penalties for violations

Common compliance failures in Thailand:

• Invalid employment contract: ฿50,000-200,000 fine plus contract void, potential back payments
• Wrong termination process: Full severance plus legal fees, possible reinstatement order
• Missing mandatory contract clauses: Contract deemed invalid, employee can claim verbal agreements
• Overtime violations: Back pay plus 15% annual interest, ฿20,000-100,000 fines
• PDPA violations: Up to ฿5 million or 2% of annual revenue for serious breaches

Hire with Columbus ensures every contract includes all mandatory clauses in proper Thai translation. Our legal team handles terminations following exact Thai procedures, and our HR platform maintains PDPA-compliant employee records with proper data protection safeguards. At $179/month per employee, it's far cheaper than fixing compliance mistakes after the fact.

What has changed recently?

Thailand's been busy tweaking its employment laws throughout 2025, and some of these changes will definitely impact how you hire and manage employees there.

The biggest shift? Thailand updated its minimum wage rates in January 2025, with increases ranging from 5-12% across different provinces. Bangkok and surrounding areas now sit at ฿370 per day (about $10.50), while some rural provinces increased to ฿330 per day. It's not uniform across the country, so you'll need to check the specific rate for wherever your employee is based.

New digital nomad and remote work regulations

Thailand introduced clearer guidelines for remote work arrangements in March 2025. Companies can now formalize hybrid work setups more easily, but there are specific requirements around equipment provision and home office safety that weren't there before.

The new rules also clarify tax obligations for employees working remotely from Thailand for foreign companies. If your employee spends more than 180 days in Thailand, they're considered a tax resident regardless of where their employer is based.

Updated visa categories for skilled workers

The government expanded its Long-Term Resident (LTR) visa program in 2025, making it easier to attract skilled professionals in tech, finance, and healthcare. The income requirements dropped from $80,000 to $50,000 annually for certain categories.

This matters because employees on LTR visas get more flexibility around job changes and don't need new work permits when switching roles within the same company.

Social security contribution changes

Social Security contribution rates stayed the same in 2025, but the wage ceiling increased to ฿15,000 per month (up from ฿15,000 in 2024). Both employer and employee contributions remain at 5% each, but now higher earners will pay slightly more into the system.

Maternity and paternity leave updates

Thailand extended paternity leave from 15 to 30 days in 2025, bringing it more in line with regional standards. The leave must be taken within 60 days of the child's birth, and it's fully paid by the Social Security Fund.

Maternity leave expanded too - it's now 98 days instead of 90, with the first 45 days paid at full salary by the employer and the remainder covered by Social Security.

Anti-discrimination law strengthening

New amendments to Thailand's labor protection laws now explicitly prohibit discrimination based on gender identity and sexual orientation. Companies need to update their employee handbooks and HR policies to reflect these protections.

The penalties got steeper too - violations can result in fines up to ฿400,000 (about $11,400) per incident, plus potential criminal charges for serious cases.