Severance pay in Thailand: what do I need to know before I hire?
If you end someone’s employment after 120 days of service, you owe severance on a fixed legal scale: from 30 days of their latest wage, up to 400 days after twenty years. A fixed-term contract does not avoid it except for genuine one-off project, occasional or seasonal work that ends within two years, and retiring someone counts as ending their employment too.
Last reviewed 26 October 2026
| Continuous service | Minimum severance |
|---|---|
| Under 120 days | None |
| 120 days to under 1 year | 30 days of the latest wage |
| 1 year to under 3 years | 90 days |
| 3 years to under 6 years | 180 days |
| 6 years to under 10 years | 240 days |
| 10 years to under 20 years | 300 days |
| 20 years or more | 400 days |
These are minimums: a contract can give more, never less. For someone on a monthly salary, 30 days is a month’s pay, so three years of service means at least six months’ salary on the way out. The 400 day tier was added in May 2019.
When it is not owed
- The employee resigns of their own accord.
- Service is shorter than 120 days.
- Dismissal for one of the grounds the Act lists: dishonesty or an intentional criminal offence against the employer; intentionally causing damage; negligence causing serious damage; breaching the work rules after a written warning (a warning stays valid for one year); three consecutive working days of absence without reasonable cause; or imprisonment by final judgment.
Notice is a separate payment
For an open-ended contract, notice is given in writing on or before a pay day and takes effect on the next one, so usually one pay period, and never more than three months. You may instead pay wages for the notice period and end employment immediately; that payment is due on the day of dismissal. Notice pay comes on top of severance, not instead of it, and final wages are due within three days of the end of employment.
Fixed-term contracts, probation and retirement
Letting a fixed-term contract expire does not avoid severance unless the work is a specific project outside your normal business, occasional work, or seasonal work, it is due to finish within two years, and that was agreed in writing at the start. A one-year contract renewed every year for ordinary work is, for severance purposes, ordinary employment.
Probation has no special status in the severance rules. What protects the employer is the 120 day threshold, which is why Thai probation periods are so often set at 119 days. Retirement counts as termination too: an employee who reaches 60, or the retirement age you set, is owed severance on the same scale. And if you move the workplace and an employee refuses to follow, they can claim special severance at the same rates.
The practical conclusion is to get the contract right before the first day rather than after the first problem. A firm can draft one as part of employment law work; payroll providers will calculate the final payment when someone leaves, and what payroll costs shows what that service runs to.
Related questions
- What does a Thai employee actually cost on top of salary?
- Hiring your first employee in Thailand: what is the compliance checklist?
- Social security in Thailand: when does registration become mandatory?
Sources
- Labour Protection Act B.E. 2541, unofficial English translation by the Office of the Council of State, sections 17, 70, 118 and 119 (PDF)
- Forvis Mazars: amendment effective 5 May 2019, the 400 day tier, pay in lieu of notice and relocation severance
- Forvis Mazars: severance pay for employees on daily wages, with the full scale
- Tilleke & Gibbins: 2017 amendments making retirement a termination that attracts severance
This is general information about how a filing works, not accounting or tax advice for your company. Confirm anything that matters against the official notice or with your accountant. Spotted something out of date? Tell us and we will fix it.