Can we pay staff from an overseas bank account?

It happens, particularly in the first months of an operation, but it does not remove the Thai obligations. The company is still the employer, tax must still be withheld and remitted here, and social security is still due. Paying from abroad also makes the audit trail harder to evidence, so we usually move payroll to a local account as soon as one is open.

How is tax handled for an employee who arrives mid-year?

Withholding is calculated on the income expected for the remaining months of that tax year, using the annual bands. Residence status matters for the individual's own return: someone present in Thailand for the threshold number of days in a calendar year is taxed as a resident, which affects foreign-sourced income and treaty relief rather than the employer's withholding duty.

Do we have to run a provident fund?

No, a registered provident fund is voluntary in Thailand, separate from compulsory social security. Groups often introduce one to match a global benefits policy or to retain senior staff. Once established, the fund rules bind you, contributions must follow the registered schedule, and the tax treatment of both employer and employee contributions follows the fund's registration.

What must a Thai payslip show?

Enough for the employee to verify the calculation: the pay period, gross pay by component, overtime where applicable, each deduction including tax and social security, and the net amount. We issue bilingual payslips because a Thai-only slip is unhelpful to expatriate staff and an English-only slip is unhelpful in a labour inspection.

How much notice is needed to terminate an employee?

At least one pay period, given so it takes effect no later than the following payday, unless the contract provides more or there is a statutory ground for immediate dismissal. Notice is separate from severance. The costly mistake is treating poor performance as serious misconduct, which it usually is not, and dismissing without the compensation the statute requires.

Can we hire someone as a contractor instead of an employee?

Only where the relationship genuinely is independent: the person controls how and when the work is done, serves other clients, and is not integrated into your reporting line. Where the substance is employment, the authorities and the labour court treat it as employment, with back social security, back withholding and severance exposure attached. For foreign nationals there is an additional problem, since work-permit conditions are tied to a named employer.

Who deals with a social security claim by an employee?

The employee claims from the Social Security Office, but the claim depends on the employer's contribution record being clean and current. We keep the enrolment and contribution history in order, supply the employment confirmations the office asks for, and deal with the queries that arise when a claim covers a period where the record shows a gap.

What happens to payroll during a work-permit renewal?

Nothing changes in the calculation, but consistency is tested. The renewal file is examined against declared salary, the tax actually remitted and the company's own filings. We time renewals so the most recent withholding certificate and financial statements support the application rather than contradict it.

Can you take over payroll mid-year without losing the history?

Yes, and the handover matters more than the first run. We take the year-to-date register, reconcile it against the monthly returns already filed and against the social security record, and identify differences before we file anything in our own name. Where the previous provider under-withheld, correcting it in the remaining months is far easier than discovering it in the annual reconciliation.

Is a bonus taxed differently from salary?

It is assessable income in the month it is paid, which pushes that month's withholding higher because the annual bands are applied to a larger total. Spreading a declared annual bonus across the withholding calculation avoids a single distorted payslip, and we set that out for management before the payment is announced to staff.

Payroll and employer obligations

Payroll in Thailand is where employment law, tax law and immigration rules land on the same spreadsheet

A salary figure agreed in a job offer becomes four separate obligations the moment it is paid: tax deducted and remitted, social security split between employer and employee, a payslip in a form the employee can check, and a record an inspector or a work-permit officer may later ask to see. Getting the arithmetic right is easy. Getting the four obligations consistent with each other is where foreign-managed companies come unstuck.

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Short answer

A Thai employer must deduct personal income tax from each salary payment using the progressive annual rates spread across the year, register every employee with the Social Security Office within thirty days of starting work, remit the employer and employee contributions monthly, issue payslips, file the monthly withholding return and an annual reconciliation, and give each employee a withholding certificate for their own tax return. Employees on work permits are treated identically for payroll purposes, and their declared salary must remain consistent with the minimum stated in the permit and visa file.

The monthly cycle, and the two returns nobody should miss

Each month the employer calculates tax on the salary actually paid, applying the annual progressive bands proportionally so that deductions are smooth rather than back-loaded. Allowances that the employee is entitled to claim reduce the base, which is why a payroll run built on gross salary alone over-deducts and generates refund claims the employee has to chase themselves. Social security is calculated on capped monthly earnings, with the employer paying its own share on top of the amount withheld from the employee.

Two filings follow. The monthly personal income tax withholding return, with payment, is due in the first half of the following month, and the social security contribution submission runs on its own monthly deadline. After the calendar year closes, an annual reconciliation return summarises everything withheld for every employee, and each individual receives a certificate showing the tax deducted in their name so they can file their own return. Where the monthly filings and the annual reconciliation disagree, the Revenue Department asks why, and the answer usually reveals a mid-year salary change that was never reflected in the calculation.

Benefits in kind are the quiet complication. Company-provided housing, a car with private use, school fees for a child, home-leave flights, tax paid on the employee's behalf and health cover above statutory levels are all capable of being taxable compensation. Expatriate packages assembled abroad frequently allocate value to items the Thai rules treat as assessable income, and the correction, if it emerges in an audit, is charged to the employer rather than the individual.

Employment law obligations that payroll has to respect

Thai labour protection rules set a working week, overtime multipliers, paid annual holiday after a qualifying period, sick leave, maternity entitlement and public holidays, and a payroll that ignores them creates liabilities that surface on termination rather than during employment. Overtime is a common exposure: staff described as management to avoid paying it may still be entitled where their actual duties do not match the exemption, and the labour court examines duties rather than job titles.

Severance is the obligation that most surprises foreign employers. Terminating without a statutory ground triggers compensation scaled to length of service, in addition to notice, accrued holiday and any contractual entitlement. Because the calculation is based on the final wage as defined in the labour statute, allowances that are in reality fixed monthly pay can be pulled into the figure even where the contract calls them something else. We review offer letters at the hiring stage for exactly this reason.

Where staff hold work permits, payroll consistency becomes an immigration matter as well. The salary on the payslip, the figure in the annual tax return, the amount stated in the work permit application and the income relied on for the visa should agree. A cash-flow decision to defer part of an expatriate's pay can, months later, become a question about whether the permit conditions were met.

How we run an outsourced payroll, and what confidentiality looks like

We take the employee master data once, then each month receive only the changes: joiners, leavers, overtime, unpaid leave, bonuses, commissions. We calculate tax and contributions, produce payslips in Thai and English, prepare the bank payment instruction, file both monthly returns, and send management a single reconciliation showing gross pay, deductions, employer cost and the total cash required. Nothing is filed from a figure we have not agreed with you first.

Confidentiality is usually the reason a company outsources in the first place. Where directors' and senior managers' pay should not sit with local staff, we run the whole payroll outside the office and issue only the aggregate ledger entry to the internal team. Personal data handling follows the Thai personal data protection framework, with a defined retention period and named access rather than a shared mailbox.

For companies opening their first Thai operation we sequence the registrations so nobody starts work unregistered: employer registration with the Social Security Office, the employee enrolments, the provident fund if the group operates one, and the tax withholding set up before the first payday. Starting payroll and fixing the registrations afterwards leaves a gap that both the tax and social security authorities can see.

How the work runs, step by step

Step 1
Employer and employee registrations
Social Security Office employer registration, enrolment of each employee, and confirmation of the withholding setup before the first pay run.
Step 2
Contract and package review
We read the offer letters for overtime exposure, allowance classification and benefits in kind that Thai tax rules treat as income.
Step 3
Monthly calculation and approval
Tax, contributions and net pay calculated from the month's changes, then approved by you before anything is filed or paid.
Step 4
Payslips, filings and payment
Bilingual payslips issued, monthly withholding and social security submissions filed, bank instruction prepared for release.
Step 5
Annual reconciliation and certificates
Year-end summary return filed and individual withholding certificates issued so each employee can complete their own tax return.

What you send us

Company registration documents and tax identification.
Social Security Office employer registration number, if already issued.
Employment contracts or offer letters for every staff member.
Employee identification documents, and passports plus work permits for foreign staff.
Bank account details and the internal payment approval chain.
Existing payroll register, if transferring from another provider.
Provident fund rules and the last contribution schedule, where one exists.

Where things usually go wrong

Hiring before the social security registration exists

Enrolment is due within thirty days of the start date. A gap is visible to the authority and leaves the employee without cover in the meantime.

Calling fixed monthly pay an allowance

If it is paid every month regardless of expense, it behaves like wage. That affects overtime rates and the severance calculation on exit.

Expatriate benefits assembled abroad

Housing, schooling, flights and tax paid on the employee's behalf may all be assessable here. The employer carries the correction.

Payslip salary that contradicts the work permit file

Tax return, payslip, permit application and visa income should agree. Deferring part of an expatriate's pay creates a question later.

Treating every manager as overtime exempt

The exemption follows actual duties. The labour court looks past the job title, and unpaid overtime claims run back over years of service.

Government fees and professional fees, separated

The ranges below reflect what our own files cost so you can budget before committing. An itemised quote is issued before work begins.

Item	Official fee	Our fee	Note
Monthly payroll processing	No government charge	Quoted per employee, per month	Headcount and the number of monthly changes drive the work, not salary values.
Social security contributions	Employer and employee shares on capped monthly earnings	Included in the monthly run	Rates and the cap are set by regulation and reviewed periodically.
Late withholding or contribution filing	Statutory fine and surcharge on the unpaid amount	Quoted for remediation	Two separate authorities, so a single late month can generate two penalties.
Severance on termination	Statutory scale based on length of service	Quoted with the termination advice	Calculated on wage as defined in the labour statute, which can include fixed allowances.

Questions foreign clients actually ask us

Can we pay staff from an overseas bank account?: It happens, particularly in the first months of an operation, but it does not remove the Thai obligations. The company is still the employer, tax must still be withheld and remitted here, and social security is still due. Paying from abroad also makes the audit trail harder to evidence, so we usually move payroll to a local account as soon as one is open.
How is tax handled for an employee who arrives mid-year?: Withholding is calculated on the income expected for the remaining months of that tax year, using the annual bands. Residence status matters for the individual's own return: someone present in Thailand for the threshold number of days in a calendar year is taxed as a resident, which affects foreign-sourced income and treaty relief rather than the employer's withholding duty.
Do we have to run a provident fund?: No, a registered provident fund is voluntary in Thailand, separate from compulsory social security. Groups often introduce one to match a global benefits policy or to retain senior staff. Once established, the fund rules bind you, contributions must follow the registered schedule, and the tax treatment of both employer and employee contributions follows the fund's registration.
What must a Thai payslip show?: Enough for the employee to verify the calculation: the pay period, gross pay by component, overtime where applicable, each deduction including tax and social security, and the net amount. We issue bilingual payslips because a Thai-only slip is unhelpful to expatriate staff and an English-only slip is unhelpful in a labour inspection.
How much notice is needed to terminate an employee?: At least one pay period, given so it takes effect no later than the following payday, unless the contract provides more or there is a statutory ground for immediate dismissal. Notice is separate from severance. The costly mistake is treating poor performance as serious misconduct, which it usually is not, and dismissing without the compensation the statute requires.
Can we hire someone as a contractor instead of an employee?: Only where the relationship genuinely is independent: the person controls how and when the work is done, serves other clients, and is not integrated into your reporting line. Where the substance is employment, the authorities and the labour court treat it as employment, with back social security, back withholding and severance exposure attached. For foreign nationals there is an additional problem, since work-permit conditions are tied to a named employer.
Who deals with a social security claim by an employee?: The employee claims from the Social Security Office, but the claim depends on the employer's contribution record being clean and current. We keep the enrolment and contribution history in order, supply the employment confirmations the office asks for, and deal with the queries that arise when a claim covers a period where the record shows a gap.
What happens to payroll during a work-permit renewal?: Nothing changes in the calculation, but consistency is tested. The renewal file is examined against declared salary, the tax actually remitted and the company's own filings. We time renewals so the most recent withholding certificate and financial statements support the application rather than contradict it.
Can you take over payroll mid-year without losing the history?: Yes, and the handover matters more than the first run. We take the year-to-date register, reconcile it against the monthly returns already filed and against the social security record, and identify differences before we file anything in our own name. Where the previous provider under-withheld, correcting it in the remaining months is far easier than discovering it in the annual reconciliation.
Is a bonus taxed differently from salary?: It is assessable income in the month it is paid, which pushes that month's withholding higher because the annual bands are applied to a larger total. Spreading a declared annual bonus across the withholding calculation avoids a single distorted payslip, and we set that out for management before the payment is announced to staff.

Send the headcount, the offer letters and the last payroll register. We will confirm the registrations you need, flag any allowance or benefit that Thai rules treat differently, and set out the monthly cycle with the approval points marked.

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