Comprehensive Guide on the New Employee Welfare Fund for Foreign SMEs in Thailand

A new labor protection measure will be implemented in Thailand from October 1, 2025 called the Employee Welfare Fund (EWF). This mandatory social security scheme will affect all companies with 10 employees or higher that are operating in Thailand. This represents one of Thailand´s most significant labor protection reforms in recent years, requiring employers to contribute 0.25% of wages alongside matching employee contributions. It aims to provide financial security for workers who are facing unemployment, retirement, or death in cases where the employees are not covered by Provident Funds (PF).

Legal Framework and Implementation Timeline of the EWF

The EWF's implementation is rooted in three key regulations published in November 2024. The Royal Decree Determining the Period for Starting Collection (November 15, 2024) establishes October 1, 2025, as the mandatory start date for the EWF contributions. The Ministerial Notification on Contribution Rates sets the phased contribution structure and payment deadlines. Finally, the Ministerial Regulation on Assistance Criteria defines exemption criteria and withdrawal procedures.

Phased Implementation Structure

The EWF has a gradual implementation approach designed to allow businesses time to adapt:

Phase 1 (October 1, 2025 - September 30, 2030):

• Employer contribution: 0.25% of employee wages

• Employee contribution: 0.25% of employee wages

• Monthly submission deadline: 15th of the following month

Phase 2 (October 1, 2030 onwards):

• Increased rates: 0.5% for both employers and employees

• Same administrative procedures and deadlines

EWF´s Scope of Application and Coverage

Mandatory Participation Requirements

The EWF applies to all private sector employers meeting the following criteria: Businesses with 10 or more employees (calculated across all branches), encompassing all employee categories including full-time, part-time, probationary, temporary, and contract workers. The fund also covers foreign workers, including registered migrant workers from Myanmar, Cambodia, and Laos.

Thailand's foreign workforce of over 2.3 million registered workers will be significantly impacted, particularly the 73% from Myanmar, 17% from Cambodia, and 10% from Laos who predominantly work in sectors requiring EWF compliance.

Exemption Criteria for the EWF

There are specific exemptions for certain employer categories:

Automatic Exemptions:

• Employers with fewer than 10 employees

• Non-profit organizations, foundations, and private schools (for teaching personnel)

• Fisheries and agricultural enterprises under specific regulatory exceptions

Conditional Exemptions:

• Employers providing registered provident funds under the Provident Fund Act B.E. 2530 (1987)

Partial Coverage Requirements:

Even exempt employers must enroll employees not covered by alternative schemes. For example, companies with voluntary provident funds must register employees during probationary periods or those who opt out of existing schemes.

Implementation Procedures and Compliance Requirements

Registration Process

Employers must complete specific administrative steps before the October 1, 2025 deadline. The mandatory registration requires submitting Form SGL.3 listing employee names and particulars to the Department of Labour Protection and Welfare. Upon approval, employers receive a certificate of registration. Ongoing administrative obligations include submitting Form SGL.3/2 for any employee changes by the 15th of the following month, maintaining accurate employee records and contribution calculations, and processing employee beneficiary designations.

Monthly Contribution Process

Employers must establish procedures for deducting employee contributions from monthly wages and matching them with employer contributions. The calculation is based on total wages including overtime, position allowances, attendance bonuses, transportation, meal allowances, and shift pay, but excludes bonuses or irregular compensation. Both contributions must be submitted to the relevant authority by the 15th of the following month.

Employee Welfare Fund or Provident Fund? Why not Both?

For businesses considering their options, the cost differential between EWF participation and establishing a provident fund varies significantly:

Benefit Type	Contribution Rate	Tax Benefits	Investment Returns	Administrative Complexity
Employee Welfare Fund	0.25%-0.5%	None announced	Bank interest rates	Government managed
Provident Fund	2%-15%	Up to 15% of income is deductible	Professional fund management	Employer managed

This comparison reveals that while the EWF offers lower contribution rates and government-managed administration, provident funds provide tax benefits and potentially higher investment returns through professional fund management.

Penalties and Non-Compliance Risks

The EWF regulations establish a clear penalty structure for non-compliance which could have both civil and criminal consequences. Financial penalties include a late payment surcharge of 5% per month on outstanding amounts, with compounding monthly penalties for continued non-compliance and no caps on maximum penalty amounts.

Non-compliance carries potential criminal consequences, including imprisonment of up to 6 months and fines of up to 10,000 baht. Triggering actions include failure to register required employees, submission of false information, non-reporting of employee status changes, and deliberate evasion of contribution obligations.

Different Employee Welfare Fund Implementation Considerations for Foreign SMEs

Foreign SMEs face a strategic decision regarding their approach to the EWF regulations:

Option 1: Full EWF Participation

• Lower immediate costs (0.25% contribution rate)

• Government-managed administration

• Limited investment returns (bank interest rates)

• Mandatory for all qualifying employees

Option 2: Provident Fund Establishment

• Higher contribution rates (2%-15%)

• Tax benefits for both employers and employees

• Professional investment management with higher potential returns

• Employer discretion over eligibility criteria

Option 3: Hybrid Approach

• Provident fund for eligible employees

• EWF coverage for probationary or excluded employees

• Maximum flexibility but more complex administration requirements

Foreign SMEs should begin immediate preparations, including conducting comprehensive employee headcount analyses across all operations, reviewing existing benefit structures for potential exemption qualification, and evaluating cost implications under both contribution phases. Preparation activities should include preparing registration documentation and employee data, updating employment contracts to reflect EWF obligations, and training HR personnel on new administrative requirements.

*Disclaimer: Further details on the implementation and exemption criteria are still pending official government confirmation.

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