Hiring Your First Employee in Thailand: A Legal Checklist

Your first hire in Thailand sets the tone for your entire operation. Get it wrong, and you'll face compliance issues, cultural friction, and potentially costly disputes. Here's a practical, law-aligned checklist to get the fundamentals right.

Before You Hire: Legal Prerequisites

1. Company Registration

In practice, you'll need a properly established Thai presence to hire locally and run payroll compliantly. Common structures include:

• Thai Limited Company: Most common (often set up with at least 3 shareholders in practice)
• BOI-promoted company: Can allow 100% foreign ownership in eligible sectors and may ease foreign hiring rules
• Branch office: Limited scope, parent company liability considerations
• Representative office: Generally restricted (typically cannot generate revenue), limited hiring

2. Tax & Payroll Set-Up

Before the first payroll, make sure you have:

• Tax ID number: Issued by the Revenue Department
• VAT registration: Required if annual taxable revenue exceeds 1.8 million THB
• Payroll withholding process: You must withhold personal income tax from salaries (when applicable) and file payroll withholding returns (e.g. PND.1)

Tip: People sometimes call this “withholding tax registration,” but in practice it's your tax ID + running the correct withholding and monthly filings once you employ staff.

The Employment Contract (and Work Rules)

A written contract is strongly recommended in Thailand, even though employment terms are not always required to be in writing. If you have 10 or more employees, you must also implement written Work Rules (in Thai) and submit them to the labour authority.

What your contract should include (best practice)

• Job description, reporting line, and work location (or remote/mobility terms)
• Working hours (commonly up to 8 hours/day, 48 hours/week, with stricter rules for certain hazardous work)
• Base salary, allowances (if any), and payment schedule
• Overtime and holiday pay rules (Thailand distinguishes normal OT, holiday work, and holiday OT)
• Holiday and leave entitlements (annual, sick, maternity, etc.)
• Notice and termination process (in many cases, law references at least one pay period, or payment in lieu—rather than a fixed 30 days)
• Severance handling (when applicable) and final settlement logistics
• Confidentiality / IP (if relevant), and reference to policies / Work Rules

Probation Period (what's actually true)

Thailand does not set a universal “maximum probation” like 119 days. However, many companies use probation periods around 90–119 days because statutory severance often starts at 120 days of service.

Even during probation, employers should follow fair process and documentation. Notice requirements typically still apply (or you pay salary in lieu), and performance issues should be recorded clearly.

Statutory Benefits & Contributions

1. Social Security (SSO)

Employer and employee typically contribute 5% each. From 1 January 2026, the wage ceiling is 17,500 THB, so the maximum monthly contribution is 875 THB per side (not 750).

In practice, employers register employees promptly after hiring (commonly within 30 days) and pay monthly contributions (commonly by the 15th of the following month).

Coverage generally includes medical care, disability, maternity-related benefits, child allowance, retirement, and unemployment-related benefits (subject to conditions).

2. Workmen's Compensation Fund

This is an employer-only contribution. Rates commonly range around 0.2%–1.0% depending on your industry risk classification. It's generally mandatory regardless of company size.

3. Leaves and Holidays (baseline minimums)

Hiring Foreign Employees

If you're bringing foreign talent, immigration and labour compliance adds another layer. The golden rule: do not allow a foreigner to start work without a valid work permit(and appropriate visa/status).

Work Permit & eligibility (high-level)

• Visa/status: Non-Immigrant “B” is common, but other schemes can apply (e.g., BOI or special programs)
• Work permit: Must be approved before work begins (timelines vary by case and authority)
• Thai-to-foreigner ratio: Common baseline expectations exist (often referenced as 4 Thais per 1 foreigner), with exceptions (e.g., BOI)
• Registered capital: Common baseline expectations are often referenced (e.g., 2 million THB per work permit), with exceptions and alternative qualifying paths

Typical documentation (varies by case)

• Passport and current visa/status documents
• Employment contract and job description
• Company registration and tax documents
• Education/experience evidence (legalization requirements vary by country and case)
• Medical certificate (often requested)
• Photos and application forms

Payroll and Tax Withholding

As an employer, you're responsible for:

• Personal Income Tax (PIT): Withhold from monthly salary (where applicable), file payroll withholding returns (e.g., PND.1). Paper filing is commonly due by the 7th of the following month, while e-filing can be later (commonly the 15th).
• Social Security: Submit and pay monthly contributions (commonly by the 15th)
• Year-end documentation: Provide employees with withholding certificates / summaries as required

Termination: What You Need to Know

Thailand has strong employee protections. If you terminate employment, pay attention to:

• Reason and documentation: Misconduct, documented performance issues, or business/economic reasons (process and evidence matter)
• Notice or pay in lieu: Many cases require at least one pay period notice (rather than a fixed 30 days), unless you pay salary in lieu of notice
• Severance pay (when applicable): Typically tenure-based; statutory severance commonly starts at 120 daysand can reach up to 400 days in higher tenure brackets

Unfair dismissal claims can lead to reinstatement orders or compensation awards. Build a paper trail: job expectations, feedback, warnings, and clear termination steps.

Practical First Steps

1. Ensure your company registration and tax ID are in place
2. Confirm whether VAT registration applies (1.8m THB threshold)
3. Set up payroll for PIT withholding + monthly filings (PND.1) and payslips
4. Register employees for Social Security and implement monthly contributions workflow
5. Confirm Workmen's Compensation Fund obligations for your industry
6. Draft a clear employment contract template and core HR policies (leave, OT, discipline, complaints)
7. If you expect 10+ staff, prepare Thai Work Rules early and submit them as required
8. Consider using a local payroll/HR provider if you're scaling quickly