An Employer of Record (EOR) acts as the legal employer for workers in Thailand, handling HR responsibilities like payroll, taxes, and compliance. At the same time, the company directs the employees’ day-to-day tasks. This setup allows businesses to hire talent in Thailand without establishing a local entity.
Thailand offers several benefits for international companies looking to hire. The country boasts a skilled workforce of approximately 40 million people, a significant portion under 35. Around 800,000 new workers are added to the Thai labor market annually. Thailand also has a high literacy rate and lower labor costs than many other countries. As an evolving middle-income economy with strong GDP growth and favorable business reforms, Thailand is an attractive destination for global hiring.
To use an EOR in Thailand, there are six basic steps to ensure you are set up properly:
- Find talent to hire in Thailand
- Compare using an EOR to setting up a legal entity in Thailand
- Get the information needed from your talent
- Choose an EOR provider with expertise in Thailand
- Communicate your hiring needs to the EOR
- Have the EOR set up the contracts and hiring procedure
An EOR in Thailand manages payroll processing, ensures compliance with tax regulations, and administers statutory benefits such as social security contributions and leave entitlements. They also handle the complexities of Thai labor laws, including working hours, overtime pay, and termination procedures.
When hiring remotely in Thailand, it’s crucial to consider various labor laws. The country has protective employment regulations, including rules on employment contracts, working hours, and paid time off. Thailand mandates a minimum wage that varies by province, and employees are entitled to various benefits, including annual, sick, and maternity leave.
The hiring process in Thailand typically involves identifying suitable candidates, conducting interviews, and ensuring compliance with local employment laws. While written employment contracts are not strictly required by law, it’s best practice to provide them. The EOR facilitates this process, ensuring all legal requirements are met and managing the onboarding of new employees.
1. Find talent to hire in Thailand
To find talent to hire in Thailand, businesses should explore a variety of channels, emphasizing both local and global platforms to maximize reach. While LinkedIn isn’t as popular a hiring platform in Thailand as in other countries, it can still be useful for professional networking and talent acquisition.
Job posting websites like JobsDB and Ajarn are popular local job portals in Thailand. These platforms offer avenues for employers to advertise openings and are widely used by Thai job seekers. Employers can post their candidate requirements on these portals, allowing applicants to access them remotely.
Specialized recruitment agencies can provide tailored solutions for industries requiring specific expertise. These agencies manage the complexities of sourcing and vetting candidates, significantly easing the hiring process for companies.
Local job boards and regional networks can be advantageous for businesses hiring within specific industries or for particular roles. Thailand’s diverse economy offers a wide range of talent across various sectors.
It’s important to note that in Thailand, the hiring process often begins with drafting a detailed job description, followed by screening, shortlisting, interviews, and selection. Some roles may require candidates to pass a written test as part of the evaluation process.
2. Compare using an EOR to setting up a legal entity in Thailand
When working with employees in Thailand, you need to consider working with an EOR versus setting up your legal entity. Here’s a comparison of the two options:
| Factor | Employer of Record | Setting Up Legal Entity in Thailand |
|---|---|---|
| Setup Time | 1-14 days depending on the provider | 4-10 weeks |
| Initial Cost | Low (typically only employee costs) | High (varies, includes legal and registration costs) |
| Ongoing Cost | Moderate (EOR fees + employee costs) | Variable (operational costs, compliance, etc.) |
| Complexity | Low (EOR handles most administrative tasks) | High (requires understanding of Thai business laws) |
| Control over Operations | Limited (company directs daily work, EOR handles employment) | Full (complete control over all aspects of business) |
| Compliance Management | Handled by EOR (payroll, taxes, social security) | Company Responsibility (requires local expertise) |
| Scalability | Highly Flexible (easy to add or remove employees) | Less Flexible (changes may require legal procedures) |
| Local Expertise Required | Minimal (EOR provides guidance) | Extensive (need for local legal and tax advisors) |
| Suitable for | Market entry, testing Thai market, hiring < 10 employees | Long-term presence, hiring > 10 employees, full operations |
| Risk | Lower (EOR assumes employer liabilities) | Higher (company bears all legal and financial risks) |
| Customization of Employment Terms | Limited (must adhere to EOR’s policies) | Extensive (can create company-specific policies) |
| Termination Process | Simpler (EOR manages most aspects) | More complex (company must handle directly) |
| Intellectual Property Protection | May require additional agreements | Company must navigate IP protection laws directly |
An Employer of Record offers a quicker, less complex route to hiring local staff, bypassing the need for a formal company presence. This approach is particularly suitable for companies looking to test the Thai market or expand quickly without significant upfront investment.
On the other hand, setting up a legal entity in Thailand offers greater control and the ability to customize business operations and policies. However, establishing a legal entity involves complex registration processes, significant upfront fees, and a deeper understanding of local laws and tax regulations.
In comparison, using an EOR is generally less expensive. It involves less risk, making it a suitable option for small to medium-sized businesses or those in the initial stages of market exploration. It eliminates the need for a local expert or dedicated legal and tax teams, as the EOR handles these aspects.
3. Get the information needed from your talent
To hire employees in Thailand, you’ll need to collect essential personal information and employment details. This typically includes:
- Employee’s full name
- Address
- Date of birth
- Thai ID number or passport details for foreign nationals
- Bank account details for salary payments
- Comprehensive job description, including title, duties, and place of work
While written employment contracts are not strictly required by Thai law, it’s best practice to provide them. These contracts should detail the terms of employment, such as:
- Effective wages, rates, overtime pay, and any allowances
- Wage period (daily, weekly, monthly, etc.)
- The notice period required for termination
- Any end-of-year remuneration details, if applicable
It’s important to note that in Thailand, collecting this data before the employee starts working is crucial for compliance with local labor laws and regulations, including social security registration.
4. Choose an EOR provider with expertise in Thailand
When choosing an EOR provider to work with in Thailand, selecting one with deep expertise in the Thai market and a strong understanding of local labor laws is crucial to ensure compliance and smooth business operations.
Evaluate the provider’s experience managing employee onboarding, payroll, and legal compliance in Thailand. Look for a provider with a proven track record of working successfully with companies similar to yours, and check their reputation through client case studies or reviews.
Assess the range of services offered to see if they align with your needs, such as work permit support, employee benefits management, and payroll processing. It is important to choose a provider that offers comprehensive employment services and is flexible enough to adapt to changes in Thai labor laws.
Consider the provider’s technology and platforms, ensuring they offer secure, user-friendly systems with strong data protection measures. Evaluate their pricing models, looking for transparency in fees, whether they charge a fixed monthly fee or a percentage of the employee’s salary, and assess the cost-effectiveness for your business.
Finally, choose an EOR provider that demonstrates a commitment to staying up-to-date with Thai employment laws and can provide proper guidance and support to ensure your business remains compliant while operating in Thailand.
What are the best EOR providers to use in Thailand?
| EOR Provider | Why It’s a Good Fit for Thailand |
|---|---|
| Multiplier | – Extensive knowledge and experience in Asian markets, including Thailand – Competitive pricing starting at $400 per employee/month for EOR services – Covers 150+ countries, with particular expertise in Southeast Asia – Offers comprehensive benefits management, crucial for attracting talent in Thailand’s competitive job market |
| Deel | – Extensive global coverage, including Thailand – Robust support for compliance with Thai labor laws – 24/7 customer support with dedicated account managers, helpful for navigating time zone differences |
| Remote | – Strong focus on employee experience, important in Thailand’s competitive job market – Proprietary IP protection measures, valuable for tech companies expanding to Thailand – Comprehensive coverage in 180+ countries, including Thailand |
| Remofirst | – Competitive pricing, starting from $199 per employee/month, attractive for cost-conscious businesses – Offers services in 180+ countries, including Thailand – Provides employment contracts, payroll, and tax compliance services essential for Thai regulations |
5. Communicate your hiring needs to the EOR
Communicating your hiring needs to the EOR to ensure the process aligns with company goals and legal requirements is important. Provide a detailed job description, including title, responsibilities, required qualifications, and skills.
Specify the job’s expected start date, location, and whether it’s remote or onsite. Outline the proposed salary, bonuses, commission structures, and other compensation benefits. Clarify the contract length, whether permanent or fixed-term and detail the working hours, including any flexibility or shift requirements.
Discuss the company culture, growth plans, and how the position fits into future expansion. Specify equipment needs and onboarding procedures. By accurately representing these aspects, the EOR can find the right talent and ensure legal and administrative compliance.
Additionally, communicate any specific requirements related to Thai labor laws, such as the need for social security registration or any industry-specific regulations that may apply to your business.
6. Have the EOR set up the contracts and hiring procedure
Once you have chosen which provider to work with and communicated your hiring needs, the EOR will set up the contracts and hiring procedure, ensuring compliance with local labor laws and employment practices.
The EOR will draft employment contracts that comply with Thai labor laws, including specific terms regarding job details, working hours, and termination procedures. They’ll also manage the necessary documentation for tax, social security, and payroll setup, adhering to mandatory withholdings and reporting requirements.
The EOR also registers employment with relevant Thai authorities, such as the Social Security Office, to ensure the company is properly licensed and authorized to operate and hire employees in Thailand.
They’ll ensure your company complies with local regulations related to working hours, minimum wage, and leave entitlements. Additionally, the EOR administers benefits and handles formal onboarding, including the introduction to company systems and culture.
What help does an EOR provide in Thai payroll, taxes, and benefits administration?
The EOR will support Thailand’s payroll, taxes, and benefits administration, ensuring compliance with complex local laws. It calculates and processes employee salaries, withholds the correct tax amounts, and handles social security contributions.
The EOR manages payslips that reflect mandatory withholdings for income tax and social security contributions, adhering to Thai regulations. It files monthly withholding tax (WHT) returns, which have a deadline of the 7th (for manual submissions) or 15th (for online submissions) of the following month.
For benefits, the EOR ensures compliance with statutory requirements, such as annual, sick, and maternity leave. It can also administer additional benefits common in Thailand, such as private health insurance or annual bonuses.
The EOR also handles the calculation and payment of severance pay when applicable, ensuring compliance with Thailand’s labor protection laws.
When do you need an EOR to hire in Thailand?
An EOR is typically required when hiring employees in Thailand, as opposed to engaging freelancers or contractors. It’s the ideal solution when a company needs to exercise control over work hours, provide tools, and define processes or when projects call for dedicated teams integrated into the company. An EOR is also beneficial when employees’ work is regular and continuous, operations in Thailand grow beyond a small contractor team, or customization of HR policies and processes to fit local requirements is needed.
What labor laws do you need to consider when hiring in Thailand?
When hiring in Thailand, several key labor laws must be considered. Thailand’s approach to labor laws favors employees over employers and addresses various aspects of employment, such as employee provisions, benefits, and protection.
Employment contracts
While written employment contracts are not strictly required by Thai law, it’s best practice to provide them. These contracts should detail the terms of employment, including job responsibilities, compensation, working hours, and termination conditions.
Working hours and paid holidays
The typical work week in Thailand is 48 hours, with the standard working day being eight hours. Employees are entitled to at least one day off per week, and the time between days off cannot exceed six days. Thailand has 13 paid public holidays each year.
Taxes
Employers and employees contribute 5% to the social security fund for tax purposes. Employees who earn less than 15,000 THB a year are exempt from taxes. Tax rates range from 5% to 35% for earnings above this amount.
Severance pay
Employers are responsible for providing severance payments based on the length of service:
- 120 days to 1 year: 30 days salary
- 1 to 3 years: 90 days salary
- 3 to 6 years: 180 days salary
- 6 to 10 years: 240 days salary
- Ten years or more: 300 days salary
Key Thai Labor Laws
| Law | Key Points |
|---|---|
| Employment Contracts | Not strictly required by law but recommended; should include job responsibilities, compensation, working hours, and termination conditions |
| Working Hours and Paid Holidays | Based on length of service: 30 days salary for 120 days to 1 year; 90 days for 1 to 3 years; 180 days for 3 to 6 years; 240 days for 6 to 10 years; 300 days for ten years or more |
| Taxes | Employers and employees contribute 5% to the social security fund; tax rates range from 5% to 35% for earnings above 15,000 THB annually |
| Severance Pay | Based on length of service: 30 days salary for 120 days to 1 year; 90 days for 1 to 3 years; 180 days for 3 to 6 years; 240 days for 6 to 10 years; 300 days for 10 years or more |
How does the hiring process work in Thailand?
When hiring staff in Thailand, employers typically follow these steps:
- Identify the vacancy and create a detailed job description
- Advertise the position through various channels, including local job portals like JobsDB and Ajarn
- Review applications and shortlist candidates
- Conduct interviews and assessments, which may include written tests for some roles
- Select the preferred candidate and make a job offer
- Negotiate and finalize the employment terms
- Complete necessary paperwork, including social security registration
- Onboard the new employee
Employers must ensure compliance with Thailand’s labor laws and regulations throughout this process, including anti-discrimination legislation and data privacy requirements. It’s also important to be aware of cultural nuances in the Thai hiring process, such as respect for seniority and the hierarchical nature of many Thai organizations.
Is Thailand a relatively easy country to hire employees remotely through an EOR?
Thailand is generally considered a relatively easy country to hire employees remotely through an Employer of Record. The country’s growing economy, skilled workforce, and increasing openness to remote work make it an attractive destination for international hiring.
Pros of hiring employees in Thailand:
Cons of hiring employees in Thailand:
Thailand’s labor laws, while protective of employees, are clear and well-established, making compliance manageable with the help of an experienced EOR. The country’s improving digital infrastructure facilitates remote work arrangements, especially in urban areas.
However, it’s important to note that while hiring through an EOR in Thailand is relatively straightforward, employers must still be mindful of local labor laws and cultural nuances. An experienced EOR can navigate these requirements effectively, ensuring compliance while simplifying the hiring process for foreign companies.
In conclusion, Thailand’s combination of a skilled workforce, favorable business environment, and established legal framework makes it a viable option for companies hiring remote employees through an EOR, provided they partner with a knowledgeable and experienced EOR provider.
