Running payroll in Thailand means operating two systems every month: personal income tax withheld at source from each salary, and social security contributions split between employer and employee. Both are administered in Thai baht through Thai authorities, the Revenue Department for tax and the Social Security Office for contributions, and both assume the employer is a registered Thai entity. That last assumption is the fork in the road for foreign companies: with a Thai entity you can run payroll directly or through a local payroll provider; without one, an employer of record is the compliant route. This page covers the mechanics and the figures published by the authorities and by PwC's country summary.
Personal income tax: withheld at source, settled annually
Thai personal income tax is progressive. Per the Revenue Department's published schedule, the first 150,000 baht of net income is exempt, and the rates then step up through bands: 5% above 150,000 baht, 10% above 300,000, 15% above 500,000, 20% above 750,000, 25% above 1,000,000, 30% above 2,000,000, and 35% on income over 4,000,000 baht. The payer of income withholds tax at source and files with the District Revenue Office, and the employee's annual return is due within the last day of March following the tax year. For a monthly payroll this means projecting the employee's annual income, withholding a pro-rated amount each month, and truing up through the annual filing.
Social security: a small, capped contribution
Thailand's social security fund takes 5% of salary from the employee, matched by 5% from the employer, with each side's contribution capped at THB 875 per month, and the state contributes an equal amount on top. The cap makes this one of the lighter statutory burdens in the region: for anyone earning above the wage ceiling the employer's contribution is a fixed, small line item rather than a percentage that scales with salary. Registration with the Social Security Office is still mandatory, the remittance is monthly, and the fund is what gives the employee access to healthcare, disability, maternity and unemployment coverage, so late or missed filings surface quickly and matter to the hire.
Entity, payroll provider or EOR
If your company has a Thai entity, a local payroll provider can run the monthly cycle: calculating withholding against the progressive bands, remitting social security, issuing payslips and handling the annual reconciliation. If you have no Thai entity, you cannot register as an employer, so the choice is between engaging people as contractors, which carries misclassification risk if the relationship looks like employment, or hiring through an employer of record whose Thai entity holds the employment contract and runs this entire machinery as the legal employer. The EOR route prices as a flat monthly fee on top of salary and employer contributions; the vendor comparison on this site shows verified fees for providers covering Thailand.
Questions people ask about thailand payroll
What income tax rates apply to salaries in Thailand?
The Revenue Department's schedule is progressive: the first 150,000 baht is exempt, with bands of 5% to 35%, the top rate applying to income over 4,000,000 baht. Employers withhold at source each month and employees settle through an annual return due by the last day of March.
What does an employer pay into Thai social security?
5% of salary, capped at THB 875 per month, matching the employee's 5% contribution at the same cap, with the state adding an equal amount. Registration and monthly remittance run through the Social Security Office.
Can a foreign company run Thailand payroll without a Thai entity?
Not directly; employer registration for tax withholding and social security assumes a Thai entity. Foreign companies without one typically hire through an employer of record, whose local entity becomes the legal employer and runs the payroll.
Are these figures guaranteed to be current?
They come from the Revenue Department's published schedule and PwC's Thailand summary as read at the time of writing. Rates and caps change; verify against the sources linked below before relying on a number, and treat nothing on this page as tax advice.