An employer of record in Thailand is a locally registered company that legally employs your hire, files payroll and Social Security Fund contributions, and sponsors the work permit if the hire is a foreign national, while you direct their actual work. It exists because setting up a Thai limited company and getting it Foreign Business Act cleared, licensed and payroll ready takes materially longer than most single hires can wait. The statutory frame that decides whether an EOR is doing its job properly in Thailand runs through the Labour Protection Act, which sets severance pay and notice on termination, the Social Security Act, which sets mandatory contributions, and the Alien Employment Act, which governs work permits for anyone who is not a Thai national.
The Labour Protection Act governs severance and remuneration
Thailand's Labour Protection Act, B.E. 2541, is the statute an employer of record works against for day to day employment terms: minimum wage remuneration, working hours, and severance pay owed on termination without cause. Thailand's Ministry of Labour describes the Act as establishing minimum standard practices covering remuneration, severance and the Employee Welfare Fund, with severance graduated by how long the employee has worked for the business rather than a single flat payment. An EOR quoting a Thai hire should be able to walk you through how its severance calculation is built, not just state a headline monthly fee, because severance liability sits with whichever entity is the legal employer on the day of termination.
Social Security Fund contributions
Employment in Thailand is backstopped by the Social Security Fund under the Social Security Act, B.E. 2533. Thailand's Ministry of Labour confirms the standard contribution for Section 33 insured employees is 5% of wages from the employee and a matching 5% from the employer, with the government separately contributing 2.75%, funding sickness, maternity, disability, death and old age benefits. These are mandatory percentages on top of gross salary, in Thai baht, and an EOR's payroll should show them itemised on every payslip rather than folded into an opaque service fee.
Work permits for foreign hires
If the person you are hiring in Thailand is not a Thai national, employment is governed separately by the Alien Employment Act, B.E. 2521, which Thailand's Ministry of Labour describes as controlling which categories of foreign nationals may work and reserving certain occupations for the Thai labour force. In practice this means securing a work permit tied to the employing entity before the hire can legally start, and the entity named on that permit is the EOR, not your own company. Ask the provider how long their typical permit turnaround runs and what documentation they need from the candidate before day one, since this, not the payroll setup, is usually the pacing item for a Thai hire.
Entity versus EOR in Thailand
A Thai limited company gives you full control and is worth the setup time once you are hiring a team locally, but foreign ownership restrictions under the Foreign Business Act and the paperwork to get a company registered, tax registered and Social Security Fund registered add real weeks to the timeline. An employer of record skips all of that for a single hire or a market test, at the cost of an ongoing service fee and less control over benefits design. The break-even point is usually somewhere around three to five hires, though it depends heavily on salary levels and how quickly you need people working.
Questions people ask about employer of record thailand
How is severance pay calculated for a Thai employee?
Severance is set by the Labour Protection Act and scales with length of continuous service, rather than being a flat number, so an employer of record's quoted termination cost should reflect the specific hire's tenure at the point of termination, not a single average figure across all hires.
What do employer and employee pay into Thai social security?
Under the Social Security Act, Section 33 employees and their employers each contribute 5% of wages to the Social Security Fund, with the Thai government adding 2.75%, per Thailand's Ministry of Labour. These fund sickness, maternity, disability, death and old age benefits.
Can an employer of record sponsor a work permit in Thailand?
Yes, that is one of the core reasons buyers use an EOR in Thailand. The work permit is issued against the employing entity under the Alien Employment Act, and since the EOR is the legal employer, it is the entity that sponsors and holds the permit on the hire's behalf.
How long does it take to hire someone in Thailand through an EOR?
For a Thai national, payroll onboarding can often run inside one to two weeks. For a foreign hire needing a work permit under the Alien Employment Act, timelines extend depending on documentation and the specific provider's permit processing speed, so ask for a realistic range rather than a best case number.