One of the most common compliance mistakes growing companies make is offering compensation and benefits that do not align with local standards. When expanding to Thailand, it’s important to take the following into account.
Thailand compensation laws
Thailand does not have a universal minimum wage law. Instead, the minimum wage varies based on the province. As of October 2023, the daily minimum wage amount ranges from THB 328 to THB 354.
According to Thailand compensation laws, overtime is paid at 1.5 times the employee’s base salary on weekdays and 3 times the base salary on weekends. If an employee is not eligible for standard overtime — such as a company officer — they should obtain 2 times their salary for overtime pay.
Guaranteed benefits in Thailand
Deciding on the best Thailand benefits plan for your company starts with determining the statutory minimums.
Thailand has 13 paid public holidays per year. Employees also receive a minimum of 6 days of paid vacation time, but many employers offer 10 to 15. Employees in Thailand may also be entitled to other forms of leave, including:
- National service leave
- Training/exam leave
- Sterilization leave
- Monkhood leave
- Hajj leave
- Sick leave
- Personal business leave
- Maternity leave
Thailand benefits management
Companies should also prepare to offer supplemental benefits. Although Thailand has a universal healthcare system, employers will sometimes provide supplemental coverage as a benefit. Small companies may choose to offer a stipend for these benefits instead of sourcing them.
Although not a mandatory benefit, employers often offer a provident fund that promotes retirement savings. Employer contributions to these funds must be greater or equal to the employee contribution. Employers can offer this benefit under several conditions, such as working time, membership, job title, and salary rate.
Thailand competitive benefits planning
To make your company stand out, you’ll want to create a benefits plan that competes with other businesses in the area. Strategically managing your employee benefits planning in Thailand is vital to your company’s success internationally.
Thailand employee benefits plan
A strong benefits plan can establish a positive reputation for your company and encourage people to apply for your vacancies. The benefits you offer can also improve workplace morale and employee retention.
Your company’s competitive edge will come from your fringe benefits. Some popular supplemental offerings in Thailand include:
- Holiday bonuses
- Meal allowances
- Transportation stipends
- Training opportunities
- Supplemental insurance
Required benefits
While fringe benefits will make your company competitive, you’ll need to consider legal requirements first. Statutory benefits in Thailand include:
- Paid public holidays
- Paid annual leave
- Maternity leave
- Sick leave
- Personal business leave
- National service leave
- Training/exam leave
- Sterilization leave
- Monkhood leave
- Hajj leave
- Social security contributions
Designing Thailand employee benefits plans
When designing your benefits plan, you’ll need to find a balance between your company’s financial abilities and employees’ needs. Achieving this balance can be challenging, but it’s possible with the proper steps.
1. Evaluate your company’s resources and goals.
Assess your revenue and expenses to create a budget for your benefits spending. Setting aside a percentage of your earnings can help you modify your offerings as your company grows.
You can also use this early planning stage to determine your company’s goals and how benefits can enhance them. For instance, if you want to compete with another company in the area, you can create a benefits package similar to theirs.
2. Learn about the labor market.
Your competitive edge will come from a deep understanding of the labor market and what employees want. Take some time to research companies in the area and learn about their benefits packages. You can identify similarities across plans to find what employees will likely expect from you.
You can also learn about local needs and standards by connecting with employees directly. Interview workers in the area or distribute surveys to find out what they expect from employers and what they want to see more of.
3. Design your plan.
Once you’ve gathered this key information, you can create a plan tailored to your location and industry. Allocate funds to the required provisions first. After you’ve met the threshold for compliance, you can distribute your remaining budget to the most desirable benefits you discovered through market research.
Average cost of benefits
Every company has a unique approach to benefits, so there’s no true average for the cost. It’s best to focus on your own budget to keep spending in check.
How to calculate benefits
While calculations will vary depending on the benefits you offer, you can find guidelines pertaining to the required provisions in Thailand’s labor laws. For example, social security contributions include pension, unemployment, and health insurance. Both employees and employers must contribute 5% for these funds. The percentage breakdown is as follows:
- 3% for pension
- 1.5% for health insurance
- 0.5% for unemployment
Employers must also contribute up to 1% for work injury insurance.
How are employee benefits taxed in Thailand?
All benefits in cash and in-kind fall under the assessable income umbrella, making them taxable. However, some benefits come with exemption amounts that employees can write off on their taxes. These benefits include:
- Life insurance premiums up to THB 100,000
- Provident fund contributions up to THB 500,000
- Social insurance contributions
Employee health benefits
Thailand has a universal healthcare system covered by social security funds. Contributors can access many essential health services for free, though there are private services available as well.
Employers are obligated to contribute to social security on behalf of employees. Although not required, some employers choose to provide supplemental insurance as a fringe benefit.
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