Tshering Dekar
2025年2月18日
Payroll is more than just paying employees on time. It involves understanding labor laws, tax rules, and compliance requirements. If it is not managed properly, it can lead to fines, penalties, and legal issues. Here are some common payroll mistakes businesses make in Thailand and how you can avoid them:
Missing Deadlines for Social Security and Tax Filings
Late filings can result in hefty fines and interest charges. In Thailand, businesses and individuals who fail to file their taxes by the deadline are charged with a fine of up to THB 2,000 per month on top of a 1.5% interest on unpaid taxes. If employees fail to remit SSO on time, they will be subject to an additional charge of 2% of the amount due per month. The key deadlines are:
Social Security contributions and VAT: Due by the 15th of the following month.
Withholding tax (personal and corporate income tax): Due by the 7th of the next month.
With multiple tax filing deadlines throughout the year, it's simple to overlook important deadlines without proper reminders. To avoid this, companies should set automated reminders for tax deadlines or use payroll software that alerts on the submission deadline.
2. Failure to Update Payroll Systems with Legal Changes
Payroll laws and tax regulations in Thailand can change frequently. For example, starting in 2025, the minimum daily wage has been increased across various provinces in Thailand, ranging from THB 337 to THB 400 per day. Such changes affect tax calculations, deductions, and social security contributions. To ensure accuracy, businesses should regularly update payroll systems to stay current with the latest legal changes.
3. Poor Record-Keeping
Under Thailand's Labour Protection Act, businesses are required to maintain employee records. These records must include payroll details, tax deductions, SSF contributions, and leave balances. It should be kept for at least two years from the date of such payments. Furthermore, employers must maintain employee records for a minimum of two years following the termination of employment. Employers who fail to comply with this requirement may face a fine of up to THB 20,000. Therefore, companies should keep payroll documentation clear, complete, and accessible.
4. Misclassification of Employees
One of the common payroll mistakes is the misclassification of employees as independent contractors which can lead to issues. In Thailand, employees are entitled to statutory benefits such as social security, paid leave, and other work protections. Whereas contractors are only subject to withholding tax and are responsible for their own taxes and social security contributions. If employees are misclassified as contractors, it can lead to penalties, back taxes, and interest on unpaid severance payments. Companies should therefore regularly audit employee classification as per the labor laws before processing the payroll.
5. Incorrect Tax Withholding
Thailand has a progressive tax system, which means tax rates change depending on income levels, deductions, and allowances. Using outdated tax brackets or missing deductions, such as those for spouses or children can cause errors in withholding taxes. These mistakes may result in penalties or dissatisfied employees. is therefore crucial to regularly update payroll software with the latest tax brackets, deductions, and allowances.
6. Inaccurate Leave & Attendance Tracking
Thai law mandates a minimum of six days of paid annual leave for employees. Employers must also provide proper compensation for public holidays. Payroll errors often occur when leave and attendance are not accurately tracked. Using an automated system can help prevent these errors in calculations and ensure accurate payroll.
Payroll mistakes can be costly but they are avoidable with the right systems and expert guidance. Don’t risk paying hefty fines for non-compliance with Thai labor laws. Contact us at contact@bizwings.co to find out more about how we can help smoothen your payroll process.
Sources:
Memo: Employment Law in Thailand