Thailand Payroll & Social Security (SSO)

Thai payroll is three separate compliance regimes running at once

Running payroll in Thailand means satisfying three different authorities each month. The Revenue Department wants withholding tax on employment income remitted and reported. The Social Security Office wants employer and employee contributions remitted with a contribution schedule. The Labour Protection Act B.E. 2541 (1998) governs what must actually be paid: minimum wage, overtime multipliers, holiday pay and severance on termination.

The three regimes do not share definitions. A payment can be taxable but outside the social security contribution base, or a benefit in kind that is assessable income for the employee while never appearing in a bank transfer. Payroll errors in Thailand are rarely arithmetic; they are classification errors that only surface during a Revenue Department audit or a Social Security Office reconciliation two years later.

For companies employing foreigners there is a fourth layer. Employment of a foreign national must align with the work permit: the position, employer and, in many cases, the workplace stated on the permit. Payroll that pays a foreigner for duties outside their permitted scope creates an immigration exposure regardless of whether the tax was withheld correctly.

The monthly and annual calendar we run for clients

What our service actually covers

1. Onboarding and register build: We build the employee register with the fields the authorities check: national ID or passport, social security number, tax ID, start date, position and pay structure.
2. Pay structure classification: Each element of pay is classified for tax and for the social security contribution base separately, and benefits in kind are valued and documented rather than ignored.
3. Monthly processing: Gross to net calculation, payslips issued in Thai and English, a bank payment file, and a management summary reconciling cost to the general ledger.
4. Statutory filings: We prepare and submit the monthly returns and contribution schedules and retain the filing receipts on the client's file.
5. Termination handling: Severance calculated on service length, payment in lieu of notice where applicable, unused annual leave, social security deregistration, and the final tax certificate.
6. Year-end: Annual reconciliation, issuance of employee tax certificates, workmen's compensation reconciliation and a compliance letter recording what was filed and when.

Points that repeatedly cost employers money

Overtime is the most common source of Labour Court claims we see. The Labour Protection Act sets multipliers for work beyond normal hours, on holidays, and on holidays beyond normal hours, and it restricts which employees can be treated as exempt. Classifying an operational supervisor as managerial to avoid overtime is a decision that gets tested when that person leaves unhappy, and the burden of proving the exemption sits with the employer.

The second is severance. It is calculated on continuous service and is payable on employer-initiated termination other than for the statutory misconduct grounds, and those grounds are narrower than most foreign managers assume. Documentation matters more than the underlying facts: a dismissal for cause with no written warnings, no investigation record and no signed acknowledgement is, in evidentiary terms, a dismissal without cause.

The third is the treatment of independent contractors. A person engaged on a service contract but working fixed hours under supervision using the company's equipment is likely an employee in substance, with retrospective social security contributions and severance exposure attached. We review contractor arrangements at onboarding rather than at exit.

Common mistakes and how we avoid them

More questions we are asked

Are social security contributions mandatory for foreign employees?

Foreign employees working legally under a work permit for a covered employer are generally within the social security system on the same basis as Thai employees.

How is severance calculated?

Under the Labour Protection Act it is based on continuous years of service in bands, paid at the employee's latest wage rate, on employer-initiated termination other than for statutory misconduct grounds.

Can payslips be in English only?

We issue bilingual payslips. Thai-language records are what an inspector or the Labour Court will work from, so an English-only record weakens the employer's position.

Do you handle the annual employee tax certificates?

Yes. We produce and distribute the 50 Tawi certificates and reconcile them to the monthly filings.

Can you take over a payroll mid-year?

Yes. We reconstruct the year-to-date position from your prior filings first, because the annual reconciliation depends on the earlier months being correct.