Payroll in Thailand — withholding tax (PND.1), social security contributions, and documents for foreign employees

An employer runs two monthly streams. The first is withholding income tax from salaries and remitting it to the Revenue Department on PND.1. The second is deducting the employee’s social security contribution, adding the employer’s share, and remitting both to the Social Security Office.

Contribution rates and the wage ceiling used for the calculation are set by social security law and ministerial regulations, and they are adjusted from time to time. Check current figures with the Social Security Office before configuring payroll each year.

At year end the employer files the PND.1 Kor summary and issues withholding certificates so employees can file their personal returns.

Foreign employees working in Thailand fall within the income tax and social security systems just like Thai employees, unless a legal exemption or specific agreement applies. Salary paid by a foreign parent for work performed in Thailand can still be taxable in Thailand.

Visa and work permit renewals usually require evidence of tax and social security payments. The salary in payroll must therefore match what was declared to the Department of Employment and the Immigration Bureau.

Failing to register as an employer with the Social Security Office within the required time after hiring the first employee, not notifying staff joining or leaving, and leaving cash allowances or benefits in kind out of taxable income are the issues that most often force back-filing.

Each month, the employer must calculate pay, withhold personal income tax, and file PND 1 and remit the tax to the Revenue Department by the deadline; deduct the employee’s social security contribution, add the employer’s share and remit both to the Social Security Office by the deadline; and, if there is a provident fund, remit contributions under its rules.

After the tax year, the employer files PND 1 Kor summarising the year’s income and tax and issues withholding certificates (50 Tawi) to employees for their own returns. Check current deadlines and contribution rates with the Revenue Department and Social Security Office, as they can change.

Foreign employees working in Thailand are generally taxed on employment income from work in Thailand in the same way as Thai employees and need a tax ID. Employers should check that the employee holds a work permit matching the position and employer, and register them for social security as the law requires. Pay from abroad for work done in Thailand may still be taxable in Thailand.

Benefits the employer pays, such as housing, children’s school fees or tax borne by the employer, are generally employee income too. State them clearly in the employment contract and include them in the tax calculation.

Paying salaries in cash without records, or engaging staff as independent contractors when the work is really employment, can later create liability for tax, social security and Labour Protection Act rights. The relationship is judged by how work is actually done, not just the contract’s title. Keep payslips and transfer records for every pay period.

When hiring: sign a written employment contract, keep copies of ID or passport and work permit, collect allowance declarations, and register the employee with the Social Security Office within its deadline.

Each pay run: calculate pay, overtime and taxable benefits, withhold tax and contributions, issue payslips and file returns on time.

When an employee leaves: notify the Social Security Office, pay outstanding wages and statutory severance where applicable, issue an employment certificate and withholding certificate, and for foreign staff notify the end of employment as the Department of Employment requires.

Must a salaried director join social security? It depends on whether the director is in fact an employee; check case by case with the Social Security Office. Director salaries are subject to withholding tax as usual.

How is a bonus taxed? A bonus is employment income and is included in withholding in the month paid, using the Revenue Department’s method.

Can we pay staff working from abroad? Tax and social security depend on where the work is actually done, the contract and both countries’ laws. Check before hiring.

Besides social security, employers meeting the criteria must contribute to the Workmen’s Compensation Fund under the Workmen’s Compensation Act, which covers employees injured or ill because of work. Only the employer contributes, at a rate set by business type, and annual wages must be reported to the Social Security Office on time. When an employee is injured at work, the employer must report it on the prescribed form within the legal period and keep medical records. Check current rates and deadlines with the Social Security Office.

Keep employment contracts, the employee register, wage records, payslips, PND 1 and PND 1 Kor, proof of social security remittances and work permits for foreign staff. The Labour Protection Act requires employers meeting the criteria to keep an employee register and wage records for the prescribed period.

This page gives general information drawn from the laws and notices of the agencies named, not advice on a specific case. Laws, rates and deadlines can change, so check with the Revenue Department, Department of Business Development or Social Security Office before deciding. Where the stakes are high, such as a tax audit, several years of overdue statements or cross-border transactions, have a licensed auditor or tax adviser review your actual documents.