One of the most common ways companies are found noncompliant is by offering incorrect compensation and benefits that do not meet Thailand's compensation laws. Further, compensation and benefits are often sticking points...
Read MoreOne of the most common ways companies are found noncompliant is by offering incorrect compensation and benefits that do not meet Thailand's compensation laws. Further, compensation and benefits are often sticking points for employees and can become particularly troublesome in the event of a termination.
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One of the most common ways companies are found noncompliant is by offering incorrect compensation and benefits that do not meet Thailand’s compensation laws. Further, compensation and benefits are often sticking points for employees and can become particularly troublesome in the event of a termination.
Globalization Partners takes the stress out of Thailand benefit management. We’ll handle your employees’ payment through a competitive compensation plan. Then we will source the best benefits for your company to set your business apart from other employers in Thailand and attract top talent to your company.
Thailand does not have one universal minimum wage law. Instead, the minimum wage varies based on your province. As of 2020, this amount ranged from 313 Baht to 336 Baht.
According to Thailand compensation laws, overtime is paid at one and a half times the employee’s base salary on weekdays and three times the base salary on weekends. If an employee is not eligible for overtime — such as a company officer — they should get two times their salary for overtime pay.
Deciding on the best Thailand benefit management plan for your company starts with determining the statutory minimums you need to meet.
Thailand has 13 paid public holidays, which grant employees 15 days off per year. Workers also receive a minimum of six days of paid vacation time, but many employers offer 10 to 15. Employees in Thailand are also entitled to a variety of different leaves, including:
You should also prepare to offer supplemental benefits that employees in Thailand may expect from a new position. Although the country has a universal healthcare system, employers will sometimes provide supplemental coverage as a benefit. Many executives and expats ask for additional health and life insurance. Small companies may choose to offer a stipend for these benefits instead of sourcing them.
Although not 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. As an employer, you can offer this benefit under several conditions such as working period, membership, job title, and salary rate.
Most restrictions for benefits and compensation come from agreements outside of an employment contract. Although trade unions and collective bargaining agreements (CBAs) are not as prevalent in Thailand as in other countries, you should still check to make sure you are meeting the statutory minimums.
Growing your company in a new country comes with several responsibilities, one of which is 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 abroad.
Your benefits plan can set your company apart in the labor market. A strong benefits plan can establish a positive reputation for your business 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:
While fringe benefits will make your business competitive, you’ll need to consider legal requirements first. Mandatory benefits in Thailand include:
When you’re ready to design your benefits plan, you need to find a balance between your company’s financial abilities and your employees’ needs. Achieving this balance can be challenging, but it’s possible with the proper steps.
If you spend more on benefits than you can afford, you’ll limit your success. 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 might fit into them. For instance, if you want to compete with another company in the area, you can create a benefits package similar to the one it offers.
Your competitive edge will come from your 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 out 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’d like to see more of.
Once you’ve gathered this key information, you can create a plan tailored to your location and industry. Allocate your 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 learned about during your market research.
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.
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 percent for these funds. The percentage breakdown is as follows:
Employers must also contribute up to 1 percent for work injury insurance.
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:
Thailand has a universal healthcare system covered by social security funds. Contributors can get 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 their employees, but they are not required to provide supplemental insurance. Some employers choose to offer private health insurance plans as a fringe benefit.
Reach out to our team today to learn more about our competitive benefits planning.
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