A Breakdown of Payroll Taxes in Thailand for Employers

Once you onboard a local employee under a Thai employment contract, you are immediately subject to statutory obligations that sit outside standard wage costs.

These mandatory payroll obligations fund Thailand’s national welfare infrastructure and are administered by multiple government bodies. Managing them smoothly requires precision and adherence to multiple filing calendars.

For foreign businesses, these requirements directly affect your hiring budgets, cash flow, and long-term workforce planning in Thailand. This guide provides an overview of payroll taxes in Thailand, what employers must contribute or withhold, and how to stay compliant while managing your workforce.

What are Payroll Taxes in Thailand?

Payroll taxes in Thailand refer to mandatory contributions and withholdings tied to an employee’s wages. These payments are designed to fund national social protection, workplace injury coverage, and the public income tax system. For an employer, these obligations fall into two categories:

1. Employer Contributions (Direct Cost): Funds paid by the company on top of the employee’s gross wage.

• Social Security Fund (SSF) Contribution
• Workmen’s Compensation Fund (WCF) Premium
• Employee Welfare Fund (EWF) Contribution (Starting Oct 2026)

2. Employee Deductions (Withholding Duty): Funds subtracted from the employee’s gross wage, which the employer must remit to the government on their behalf.

• Personal Income Tax (PIT) Withholding
• Social Security Fund (SSF) Deduction
• Provident Fund (PF) Deduction (if applicable)

As the employer, you are the single party responsible for accurately calculating, deducting, filing, and remitting all these amounts to the relevant government bodies each month. This entire process is the foundation of your local payroll compliance.

Mandatory Payroll Contributions and Premiums in Thailand

Thailand’s core social protection schemes require joint funding from employers and employees. Each scheme calculates contributions as a percentage of monthly wages, yet each follows a different filing cycle. Understanding these cycles is crucial because the filings don’t occur through a single system or share the same filing deadlines.

1. Social Security Fund (SSF) Contribution 

The Social Security Fund (SSF) is the country’s primary social safety net, providing coverage for healthcare, maternity, disability, unemployment, and retirement pensions. It is regulated and managed by the Social Security Office (SSO), which enforces compliance with a 2% monthly surcharge on any overdue contributions.

• Contribution Rate: Both the employer and the employee contribute 5% of the employee’s monthly wages.
• Wage Base: Contributions are calculated on a capped wage base:
  Minimum Wage Base: THB 1,650 (~$52)
  • Maximum Wage Base: THB 15,000 (~$473)

  2. Workmen’s Compensation Fund (WCF) Premium

  The Workmen’s Compensation Fund (WCF) is a mandatory, employer-paid insurance scheme that covers employees for injuries or illnesses sustained during work or travel to/from work. It is regulated by the Workmen’s Compensation Fund Office (WCFO) (under the SSO). 

  Similar to SSO, the WCFO has the authority to audit employers’ wage declarations and impose a 2% surcharge on any underpaid or late annual premium remittance.

  • Employer-Paid Only: Unlike the SSF, the employee does not contribute to the WCF.
  • Rate Calculation: Premiums are calculated based on the employee’s total annual wages and assigned according to the job’s risk category (ranging from 0.2% to 6.0%). Office and administrative roles typically fall into the lowest risk band.
  • Filing Schedule: WCF operates on an annual cycle. Employers must submit the Annual Wage Declaration (Form Kor Tor 26) by 31 January of the following year. The WCFO then issues an assessment for the premium due, which must be paid to the SSO via authorized payment channels.

  3. Employee Welfare Fund (EWF) Contribution

  The Employee Welfare Fund (EWF) is a confirmed statutory obligation under the Labour Protection Act. It acts as a financial safety net for employees in cases of job loss, unpaid wages, or employer insolvency. The scheme becomes a mandatory monthly cost and filing requirement on 1 October 2026.

  Once enforced, employers and employees must each contribute 0.25% of monthly wages. The fund will be administered by the Department of Labour Protection and Welfare (DLPW).

  The EWF applies only to employers with 10 or more employees. You may be exempt if your company already provides a qualifying retirement or welfare scheme. In practice, this means:

  • You maintain a registered Provident Fund (PF) for all staff, or
  • You offer a comparable employer-funded welfare scheme that meets DLPW standards.

  Pro Tip: If your organisation falls near the 10-employee threshold or plans to introduce a PF, RecruitGo experts can assess your exposure early. This helps you forecast upcoming payroll costs and avoid double contributions once the EWF takes effect.

  Additional Tax Withholding for Employers in Thailand

  Beyond the statutory contributions you fund as an employer, Thailand requires monthly withholding of employee-paid taxes. These amounts must be deducted from wages and remitted to the authorities on schedule. 

  The two key items are Personal Income Tax (PIT) and the Provident Fund (PF). PIT withholding is mandatory for all employees with Thai-sourced income, while the PF is voluntary to set up, but becomes compulsory for both employer and employee once adopted.

  1. Personal Income Tax (PIT) Withholding

  Personal Income Tax (PIT) is the portion of your employee’s income that you must withhold each month and submit to the Thai Revenue Department. The withholding amount depends on two things:

  1. how much taxable income the employee receives, and
  2. which tax bracket they fall under after applying Thailand’s standard deductions.

  Under Sections 39 and 40 of the Thai Revenue Code, taxable income includes salary and almost every benefit with a monetary value. This covers monthly allowances, phone or transport stipends, bonuses, and employer-paid expenses that personally benefit the employee. It’s a much broader definition than in countries like the US or Australia, where some of these payments may be tax-exempt. 

  Before applying the PIT brackets, you must deduct two standard amounts that every employee receives automatically. These reduce the employee’s assessable income, which is the figure used to determine the applicable PIT rate:

  • 50% employment income deduction, capped at THB 100,000 (~USD 3,000) per year
  • Personal allowance of THB 60,000 (~USD 1,900)

  Thailand applies progressive tax rates to assessable income. Here’s how the brackets are structured under current regulations.

  Taxable Income (THB)	Tax Rate
  0 – 150,000	0% (Exempt)
  150,001 – 300,000	5%
  300,001 – 500,000	10%
  500,001 – 750,000	15%
  750,001 – 1,000,000	20%
  1,000,001 – 2,000,000	25%
  2,000,001 – 5,000,000	30%
  Over 5,000,000	35%

  Note that:

  • The withheld tax must be submitted via Form P.N.D. 1, no later than the 7th of the following month, or 15th for e-filing.
  • You are required to submit the annual withheld income tax summary (Form P.N.D. 1 Kor) by the last day of February of the following year, or March 8th for e-filing.

  Example of PIT Calculation in Thailand

  A Customer Support Executive earns a THB 30,000 salary, plus THB 2,000 transport allowance and THB 1,000 phone allowance. 

  • Monthly taxable income: 30,000 + 2,000 + 1,000 = THB 33,000
  • Annual taxable income: 33,000 × 12 = THB 396,000
  • After deductions: 396,000 − (100,000 + 60,000) = THB 236,000 assessable income

  This assessable income places the employee in the 5% PIT bracket (see table above). To calculate the amount you must withhold: 

  • THB 236,000 × 5% = THB 11,800 (Annual PIT)
  • Monthly PIT = (Annual PIT) ÷ 12 = THB 983.33

  2. Provident Fund (PF) Contribution (Voluntary)

  A Provident Fund (PF) is a voluntary retirement savings scheme you may choose to set up for your employees. The scheme operates under the Provident Fund Act B.E. 2530 and falls under the supervision of the Securities and Exchange Commission (SEC), with oversight from the Ministry of Finance.

  Once you register a PF, contributions become mandatory for both you and your employees. Unlike SSF or PIT, you don’t file PF contributions through a government tax portal. Instead, you remit both portions directly to the licensed fund manager you appoint during registration.

  • The deduction rate must match the employer’s rate.
  • Contributions must follow the fund’s registered rules.
  • Deductions must be remitted to the licensed fund manager each month.

  Most companies set PF rates between 2% and 15% of monthly wages. Some introduce tiered rates based on tenure or seniority, provided these tiers are written into the registered fund rules.

  PF participation is optional at the company level but binding once adopted. This structure helps companies strengthen retention and reduce employee PIT exposure, as PF contributions lower assessable income for tax purposes.

  Important Note:If you introduce a PF, your payroll workflow must support precise monthly deductions and timely remittances. RecruitGo helps you set up and run this cycle correctly, so contributions always align with your fund rules.

  Crucial Payroll Components for Employees in Thailand

  Thailand’s payroll taxes rely on precise employment data. Your reporting accuracy depends on how well you define core employment conditions, including minimum wage, overtime arrangements, taxable benefits, and residency status. These inputs determine every amount you calculate and withhold.

  Any mistake here affects your SSF, PIT, and WCF submissions, which can lead to recalculations or compliance issues. The following sections highlight the employment factors that shape monthly payroll outcomes and carry the greatest compliance impact.

  A. Minimum Wage in Thailand

  As imposed by the Labor Protection Act, B.E. 2541 (1998), the minimum wage for employees in Thailand varies by province from THB 337 to THB 400 per day. You must reference the specific rate for the location where the work is performed.

  Here are some examples of different minimum wage rates in different areas in Thailand: 

  Location	Minimum Wage (THB)
  Bangkok, Chachoengsao, Chonburi, Phuket, Rayong, and Ko Samui (Surat Thani)	THB 400
  Mueang Chiang Mai (Chiang Mai) and Hat Yai (Songkhla)	THB 380
  Nakhon Pathom, Nonthaburi, Pathum Thani, Samut Prakan, and Samut Sakhon	THB 372
  Narathiwat, Pattani, and Yala provinces	THB 337

  *The current effective rates range from THB 337 to THB 400 per day, depending on the province, as updated by the National Wage Committee.

  B. Working Hours and Overtime

  Overtime rules affect your payroll taxes because they change an employee’s taxable income. This, in turn, alters the amount you must withhold and report. Thai labour law limits regular working hours to 8 hours per day or 48 hours per week and counts any hours beyond that as overtime.

  • 1.5× hourly wage for overtime on regular working days
  • 2× hourly wage for overtime on weekly rest days or public holidays

  From a payroll perspective, this matters for three reasons:

  • PIT Withholding Increases: Overtime is considered taxable income. If an employee works significant OT in a given month, their assessable income rises. This affects the PIT you need to calculate and file under P.N.D. 1. This is also why PIT fluctuates for roles with variable hours, as the higher monthly assessable income may temporarily push the employee into a higher progressive tax bracket for that pay period.
  • SSF Contributions Shift (Up to the Ceiling): Although SSF has a capped wage base, overtime still influences the total wages recorded. If an employee’s base salary sits near the SSF ceiling, overtime may push them into the maximum contribution bracket.
  • WCF Wage Declarations Increase: Overtime must be included in the total annual wages you report on Form Kor Tor 26. Underreporting OT is one of the most common reasons WCF premiums are recalculated or back-charged.

  C. Deductible and Non-Deductible Payroll Expenses for Corporate Income Tax (CIT)

  Payroll expenses affect more than monthly tax withholding. They also determine how much of your labour cost you can claim as a deduction for Corporate Income Tax (CIT). Thailand allows deductions for most employment-related expenses, provided they are ordinary, necessary, and incurred exclusively for business purposes. 

  When you apply these classifications correctly, you gain clearer visibility over your true labour costs and reduce audit exposure.

  Below is a breakdown of how Thailand treats common payroll components for CIT purposes.

  Deductible Payroll Expenses	Conditionally Deductible Expenses (must pass the “wholly and exclusively for business” test)	Non-Deductible Payroll Expenses
  Salaries, wages, overtime, and paid leave	Housing allowances tied to employment needs	Personal gifts, vouchers, or non-work perks
  Employer contributions to the Social Security Fund (SSF)	Meal or transport allowances that are reasonable and aligned with company policy	Allowances with no receipts or unclear purpose
  Workmen’s Compensation Fund (WCF) premiums	Share-based compensation with proper valuation and board approval	Excessive or non-business-related payments
  Employer contributions to a registered Provident Fund (up to 15% of annual wages)		Unrecorded or off-the-books compensation
  Bonuses, commissions, and performance incentives
  Business-related allowances (e.g., travel allowances with receipts)
  Job-related training and upskilling costs
  Work equipment and tools used for company operations

  Correctly classifying deductible payroll expenses helps you forecast workforce costs and minimise audit adjustments. If you’re unsure about your deductible payroll components or need support aligning them with Thai tax rules, RecruitGo experts can review your structures and flag any discrepancies.

  D. Payroll Cycle and Payment Practices in Thailand

  Thailand follows a monthly payroll cycle for employees, usually on the last working day of the month. Employers must issue a payslip for each pay period, showing gross earnings, deductions, net pay, and the date of payment. Payslips may be provided electronically or in printed form.

  Payment methods commonly used include cash, bank transfer, or cheque, with the payment schedule clearly stated in the employment contract. As the employer, you must keep accurate payroll records to maintain compliance with labor and tax laws. 

  How to Simplify Your Payroll Management in Thailand

  Running payroll in Thailand can be difficult for new market entrants, especially when each statutory scheme follows a different filing process. Many companies rely on manual tools or disconnected systems, which often create calculation errors, missed deadlines, or incomplete records. These issues tend to surface only during audits or reconciliations, when fixes become more costly.

  RecruitGo helps you avoid these risks by managing the entire payroll cycle in one integrated workflow. Our team works directly with Thailand’s labour and tax frameworks, ensuring every calculation, deduction, and filing are accurate and on time. We support your expansion with comprehensive payroll solutions that ensure:

  • accurate monthly payroll calculations, PIT withholding, and SSF submissions
  • statutory reporting and deadline management across the Revenue Department and SSO
  • compliant employment contracts, payslips, and day-to-day HR administration

  If you’re planning to hire in Thailand or want to streamline an existing setup, submit your details below and we’ll put you in touch with our experts.

  Simplify Your Payroll Compliance in Thailand

  From monthly payroll to statutory filings, RecruitGo experts keep everything accurate and on track in Thailand.

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