What does a Thai employee actually cost on top of salary?
In cash, very little: the only mandatory payroll levy is the employer’s 5% social security share, capped at 875 baht a month since January 2026, plus a small employer-only compensation fund premium. The real cost sits in what the law attaches to the job, above all severance, which grows with every year of service to as much as 400 days of pay.
Last reviewed 26 October 2026
What you pay on top of salary each month
| Item | Who pays | How much |
|---|---|---|
| Social security | Employer and employee, 5% each | 5% of wages up to 17,500 baht a month: at most 875 baht from the company |
| Workmen’s Compensation Fund | Employer only | 0.2% to 1.0% of wages by risk class, paid once a year |
| Personal income tax | The employee, withheld by you | Nothing extra for the company, unless you promised a net salary |
| Provident fund | Optional | 2% to 15% of wages, only if you set one up (is it worth it?) |
The costs written into the Labour Protection Act
- At least 13 public holidays a year, paid.
- At least 6 working days of paid annual leave after a year’s service; leave can be given pro rata before that.
- Sick leave paid for up to 30 working days a year.
- At least 3 days of paid business leave a year.
- Since 7 December 2025, maternity leave of 120 days per pregnancy, the first 60 paid by the employer, plus up to 15 days of fully paid leave for an employee helping a spouse who has given birth.
- Overtime at no less than 1.5 times the hourly rate on a working day, and 3 times for overtime on a holiday.
None of these appear on a payslip, which is why owners comparing salaries across countries underestimate them. Overtime is the one that moves the number most in hospitality and retail, where rosters run past normal hours as a matter of course.
Severance: the cost that builds quietly
Every year someone stays raises what it costs to let them go. After three years of service, ending their employment costs at least 180 days of wages; after twenty, 400. That is not a reason not to hire, but it is a liability to recognise from the first year, and the reason a written contract matters more than owners think. The scale, and the narrow cases where it does not apply, are in severance pay in Thailand.
Two things that vary by person
The minimum wage is set by province and changed by notification, so check the Ministry of Labour’s current figure for where the person works rather than a number someone quoted last year. For a foreign employee the floor is higher: the work permit comes with minimum salaries by nationality and, for most companies, Thai headcount to match.
Running the payroll itself is a separate cost: Thai providers mostly charge a flat monthly fee by headcount band, international ones a rate per employee (the price evidence). Three quotes at your actual headcount will tell you which shape is cheaper for you.
Related questions
- Severance pay in Thailand: what do I need to know before I hire?
- Social security in Thailand: when does registration become mandatory?
- Hiring your first employee in Thailand: what is the compliance checklist?
Sources
- Labour Protection Act B.E. 2541, unofficial English translation by the Office of the Council of State, sections 29, 30, 57, 61 and 63 (PDF)
- Forvis Mazars: amendment to the Labour Protection Act effective May 2019 (business leave, 400 day severance tier)
- Baker McKenzie: new maternity, spouse and infant care leave in force from 7 December 2025
- Baker McKenzie: social security wage base of 17,500 baht from January 2026
- FlowAccount: the Workmen’s Compensation Fund, employer-only, 0.2% to 1.0% (Thai)
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.