What are Employee Benefits?
In this competitive era, one of the biggest challenges companies face is to retain talent. A well-designed and well-drafted benefits and compensation plan help attract new hires and retain talent within the organization.
Employee benefits in Thailand are provided to employees as required by the country’s law, enhancing the value and quality of work. These benefits secure the working conditions and social welfare of the employees.
Compensation Laws in Thailand
The compensation and benefits policy in Thailand is imperative for organizations to collaborate with professional experts.
- One of the fundamental elements of the compensatory laws in a country is its minimum wage. Interestingly, the minimum wage law of Thailand varies from state to state. In 2022, the standard minimum wage amount is 354 Baht.
- The maximum working hours for employees in Thailand is 8 hours per day and should not exceed 48 hours a week. For work that can challenge the personal safety of any employee, the maximum working hours should be seven hours a day and must not exceed 42 hours a week. A rest period of one hour should be granted to each employee after 5 hours of consecutive work. Any work done beyond this period will be considered overtime.
- Employees who work for more than 8 hours per day are entitled to overtime compensation. As per the compensation structure in Thailand and the Labour Protection Act, overtime is covered at 1.5 times the employee’s basic salary on weekdays and 3 times the basic salary on weekends. If an employee does not fall under the criteria for overtime (such as a senior manager), he will receive double the salary for overtime.
How to Design an Employee Benefits Program for Employees in Thailand?
Providing benefits to employees in Thailand shows that you are investing in their overall health and their future. Employee benefits include overtime, health insurance, vacations, profit sharing, severance pay, and more. Here is a step-by-step procedure to frame a lucrative employee benefits program for employees in Thailand
Step 1 – Identify the Key Goals of the Benefits
Before you design your employee benefits and compensation program, be clear about its objectives. There is no one-size-fits-all rule. Employee benefits depend on various factors. These are age, gender, citizenship, social strata, medical health, and financial wellness. Analyze the key objectives of the organization before you frame the benefits which can be.
- To attract new hires
- Offer unique benefits to employees adhering to the country’s laws and regulations
- Retain talent
Step 2 – Employee Benefit Budget
Benefits and compensation to employees come at a cost. You must design a budget and a cost-benefit analysis, including projected and annual costs. Accordingly, you can design the plan and align benefits for your employees.
Step 3 – Conduct a Survey
Your goal should be to get the right mix of benefits to benefit your employees and help you meet organizational goals. You must survey your employees to analyze their needs, expectations, and perspectives. You can accordingly formulate health benefits and compensation plans.
Step 4 – Draft the Right Benefits Plan
Make sure your benefits and compensation package has something for everyone. Employees range from various age groups or cultural, social, and economic backgrounds.
Step 5 – Evaluate Periodically
You must assess the workability of your benefits program to find out whether your employees are satisfied with the perks or not. You can measure the success of your plan by regular supervision, monitoring, and evaluation of your benefits program.
Types of Guaranteed Benefits in Thailand
To determine the best Thailand benefit management plan for your business, you must determine the minimum legal requirements you must meet. Some of the guaranteed employee benefits in Thailand that you should provide are –
Leave Benefits in Thailand
Thailand has 21 public holidays. Thai workers are also entitled to a variety of other leave benefits in Thailand like:
- National service leave
- Research/exam leave
- Sterilization leave
- Monk vacation
- Leave for Hajj
- Compassionate Leave
- Marital vacation
- Hospital or Medical leave
If an employee who pays contributions under the Social Welfare Act dies without suffering from a non-work accident or illness. In that case, the following compensation will be provided for the 6 months after death:
- A funeral allowance of THB 50,000 paid to a documented and licensed person
- The survivor allowance will be paid to the beneficiary specified in writing by the insured
Insured employees in Thailand get an advantage in case of non-occupational disability. If they paid a contribution for at least 3 months in the 15 months before the onset of the disability, as certified by the Medical Association.
- Health check-ups and diagnostic costs
- Treatment costs
- Dosing and medical spending
- Costs of hospitalization and treatment at medical facilities
- Ambulance or transportation costs for the disabled
- Physical, mental, and professional rehabilitation spending
- Other necessary expenses based on Articles 69 and 70 of the Social Welfare Act
Therapeutic Effects or Benefits of Medical Treatment
Insured persons are eligible for non-work accident benefits or sickness benefits. They must contribute for at least 3 months in the 15 months preceding their medical services.
Insured persons can receive free medical treatment for work-related injuries and illnesses. This is applicable at the registered hospitals listed on the social security card. This excludes 14 illnesses not covered by the social welfare chronology.
The reward payments include:
- Health check costs
- Treatment costs
- Hospital accommodation, meals, and treatment costs
- Medical and drug costs
- Ambulance or patient transportation costs
- Other necessary costs such as medical care and subsidies are given due to inadequate medical care. These are according to the rules and fees prescribed and approved by the Medical Commission.
Maternity Benefits in Thailand
The insured employee is entitled to compensation for the birth of a child for themselves or their spouse. This benefit is also applicable for a woman living with the insured person as a partner, as per the rules set by the Secretary-General, even if she is not legally married. The insured must have contributed for at least 5 months in the 15 months leading up to the medical services.
Parents who have paid contributions for at least 12 months in the previous 36 months will receive a monthly child supplement of 600 Baht per child. This is applicable for up to 3 children.
The insured person gets an old-age pension if he is 55 years old or older and has paid contributions for at least 180 months. This could be continuous or discontinuous. The old-age pension is paid based on the monthly salary percentage and the contribution period set by the rules in the Ministerial Governance.
Workers’ Compensation Fund (WCF)
The Thailand Workers’ Compensation Fund was established according to the Workers’ Compensation Act. The purpose of this fund is to provide immediate and appropriate protection. This protection is against injury, illness, disability, or death resulting from employment.
It is the employer’s sole responsibility to pay WCF annual contributions like premiums. Employees are entitled to compensation benefits like medical benefits for employees in Thailand, rehabilitation, monthly compensation, and funeral benefits. This is in case of work-related injuries.
The insured person is entitled to the unemployment compensation structure in Thailand if he contributes for at least 6 months within 15 months. This should meet the following conditions:
- They are willing to be provided with appropriate work or vocational training.
- They can work without refusing vocational training.
- They are registered with the state employment service, where they appear at least once a month.
The insured’s unemployment must not be due to:
- Dismissal due to fraudulent performance
- Deliberately commit a criminal offense against your employer
- Deliberately harm your employer
- Serious negligence of duties for 7 consecutive days without good reason
- Negligence causing severe harm to employers
- Prison sentence, excluding negligent or misdemeanor offenses
Employee Benefits for Expatriates
Employees accept jobs not only for salary but also for benefits associated with the position. In Thailand, employee benefits are often a significant work bonus that can convince foreign-based employees to join your company.
Therefore, when designing an attractive compensation package in Thailand, you may want to include unique benefits for people moving into Thailand from abroad. The most common benefit is a salary increase, but the quality of life in Thailand also attracts many people to the country. Examples of possible ex-pat benefits include:
- Health insurance
- Relocation allowance
- Visa and work permit payments
- Language lessons
- Hardship allowance
- A fixed number of return flights each year
- Tuition fee
How Are Employee Benefits Taxed in Thailand?
All cash and in-kind benefits are considered taxable income. The tax year is from 1 January to 31 December, and the employer is responsible for deducting the income tax from the employee’s salary. Employers must submit the monthly withholding tax return to the Revenue Department by the 7th day of the next month.
However, some benefits are related to allowances that employees can deduct for tax purposes. These benefits are:
- Life insurance premiums up to 100,000 Baht
- Donation of Provident Fund up to 500,000 Baht
- Contribution to social security amount to 5% of salaries – up to a maximum of 750 Baht per month.
Income tax rates in Thailand range from 0% for the lowest-earning workers’ compensation in Thailand to 35% for those earning over 5,000,001 Baht. This tax should be reported to the Thailand Revenue Department.
Employee Income Tax
- 0.00% – 0 to 150,000 THB
- 5.00% – 150,001 to 300,000 THB
- 10.00% – 300,001 to 500,000 THB
- 15.00% – 500,001 – 750,000 THB
- 20.00% – 750,001 – 1,000,000 THB
- 25.00% – 1,000,001 – 2,000,000 THB
- 30.00% – 2,000,001 – 5,000,000 THB
- 35.00% – 5,000,001 THB and above
Restrictions for Thailand Benefits and Compensation
Most benefits and compensation restrictions arise from contracts other than employment contracts. Trade unions and collective bargaining agreements (CBAs) are not as widespread in Thailand as in other countries. You still need to ensure that they meet minimum legal requirements.
Supplemental Benefits for Employees in Thailand
Thailand’s Supplemental Benefits
These are not mandatorily required by Thailand law. Employers may opt-in and provide these advantages according to their employees’ employee compensation policy in Thailand.
Life Insurance (Group Life Insurance-Death Insurance)
Most group life insurance benefits and plans for employees in Thailand are renewable annually. This includes optional additional coverage for accidental death and disability – total and permanent disability. Indemnity ranges from 12 to 48 times the monthly salary, or even a flat rate for all employees, regardless of rank.
All eligible members of Group Life Insurance are insured up to the tax exemption limit. This comes without the need for medical certification. Group life insurance covers all causes of death for insured people 24 hours a day, 7 days a week, worldwide. This benefit provides a lump sum equal to the total insured person paid at the time of the insured person’s death.
- Benefits are excluded if the insured person loses their life within a year of joining or is intentionally killed by the beneficiary.
- Employer contributions are tax-deductible as a project cost. Employees usually do not contribute. Benefits are taxable income for employees, but exemptions from this requirement are considered.
Benefits of Group Disability
Most group life insurance plans are annually renewable. These plans have options for accidental death and disability and total and permanent disability. Indemnity ranges from 12 to 48 times the monthly salary, or even a flat rate for all employees, regardless of rank.
Group Medical Services
A one-year renewable contract also covers group health insurance for Thailand employees. A life insurance company can underwrite health insurance as an additional life insurance contract or a non-life insurance company as a framework contract.
- Employers’ medical plans can be found in most businesses.
- Standard benefits are for non-work accidents or illnesses.
- Features such as deductions and out-of-pocket costs are relatively rare but can be used.
- Health insurance benefits in Thailand cover reasonable medical costs in a licensed hospital or clinic. It also includes dental benefits that a licensed doctor carries out.
- Many health insurance policies usually cover both 24 hours and around the world. Insurance companies issue medical cards for the insured for cashless treatment at hospitals and clinics. These need to be displayed in the Thailand insurance company network.
- The employer pays most health insurance plans, but it is not uncommon for employees to contribute if they want higher benefits or compensation for their dependents. These contributions are tax-deductible to the employer as a project expense and are not considered taxable income for the employee.
Retirement Registered Provident Fund
A fund was established in 1987 to ensure private-sector workers can save for retirement. Employers offer these to encourage employees to build a source of long-term savings for their retirement. The fund can be set up voluntarily with the cooperation of employers and employees. By agreement, both sides have set up a committee to oversee the fund.
In Thailand, Provident Funds are always set up in large companies. Companies with 100 or more employees are obliged to pay employee contributions to the fund. The committee overseeing the fund consists of employer representatives and elected employee representatives. The committee then selects a fund manager.
The system regulator reports to the Securities and Exchange Commission (SEC). Employees get a good amount as a lump sum when they resign from the company. Contributions paid by employees and employers to the fund are tax-deductible, and benefit payments are tax-exempt.
The SEC has introduced new rules that allow Provident Fund Managers to offer investment opportunities to their members.
How Can Multiplier Help With Benefits Management in Thailand?
Your benefits plan can differentiate your company in the employment market. The employee benefits offered to Thailand employees can balance your company’s financial capabilities and your employees’ needs. You must evaluate your organization’s resources and goals, learn about the employment market in Thailand, and design a lucrative plan.
This can be a challenging process. To create sound employee benefits and compensation packages in Thailand, many employers turn to third-party professionals or expert PEO and EOR services to manage the same.
Multiplier is a globally-acclaimed service well-versed with Thailand’s compensation laws and regulations. Our local teams will help your organization create budget-friendly and employee-centric compensation packages. These packages will be according to the rules set by the Thailand Government.
You can focus on expanding your business, while we can deal with several other regulations. We will help you with payroll management, employee onboarding, and a compensation plan for your employees. A strong benefits strategy created in consultation with an agency like Multiplier creates a positive reputation for your company and encourages people to apply for your positions.