Professional Payroll Outsourcing Services in Thailand for International SMEs

Foreign Direct Investments (FDI) continue to flow into Thailand amidst the sluggish growth that the Kingdom has experienced since the COVID pandemic. Many foreign SMEs from all over Asia, Europe, and North America continue to see Thailand´s overall value in terms of its strategic position in Southeast Asia´s dynamic economy. Thailand provides a good balance between economic opportunities and quality of life, which has also attracted many expats who are subject to Thailand´s complex payroll requirements. Thailand currently ranks 35th in the Global Payroll Complexity Index due to its multi-layered regulatory framework, dynamic minimum wage structures, and intricate tax obligations that require specialised expertise to stay compliant and navigate effectively.

Thai Payroll´s Multi-Layered Registration Requirements 

Foreign SMEs that are operating in Thailand must go through a comprehensive registration ecosystem involving multiple government agencies when it comes to payroll matters. For foreign expats, it first starts with work permit applications through the Department of Employment, followed by social security registration with the Social Security Office (SSO), and finally tax registration with the Revenue Department.

Each government agency maintains distinct requirements, deadlines, and penalty structures that need to be complied with, which can pose challenges for new foreign SMEs that have started or are planning to start their operations in Thailand. Foreign workers must obtain work permits within 15 days of employment commencement, and employers must register these employees with the SSO within 30 days.

Thailand Personal Income Tax Compliance and Cross-Border Considerations

The personal income tax structure in Thailand operates on progressive brackets from 5% to 35%. The tax-exempt threshold begins at THB 150,000 annually, and the highest rate of 35% applies to income exceeding THB 5 million. 

• THB 0-150,000: Exempt 

• THB 150,001-300,000: 5% 

• THB 300,001-500,000: 10% 

• THB 500,001-750,000: 15% 

• THB 750,001-1,000,000: 20%

• THB 1,000,001-2,000,000: 25% 

• THB 2,000,001-5,000,000: 30% 

• Over THB 5,000,000: 35%

Thailand recently implemented a worldwide income tax scheme for Thai tax residents in 2025, requiring foreign businesses and expats to navigate complex source of income determinations and potential double taxation scenarios. This means that individuals present in Thailand for 180+ days annually now face taxation on foreign-sourced income that are remitted to Thailand.

This new regulation means that foreign businesses and expats must now consider Thailand's extensive network of 61 double taxation agreements (DTAs) to avoid unnecessary double taxation.

There is also a special tax incentive from 2025 that applies to skilled Thai professionals returning from overseas for employment in certain targeted industries. Applicable employees may benefit from a reduced 17% income tax rate until December 2029.

The personal income tax system in Thailand is based on withholding taxes. Employers must withhold taxes monthly and submit them to the Revenue Department by the 7th of the following month. Both the employer and the employee must also contribute up to 5% of the monthly wage (capped at THB 750) towards social security by the 15th of the following month.

The Value of Professional Payroll Support in Thailand

Payroll support for foreign SMEs operating in Thailand can represent a low-cost strategic investment rather than simply an operational expense. The combination of financial risk mitigation, local regulatory compliance assurance, and efficiency gains for SMEs that can focus on their core operations provides a compelling value proposition that enables long-term success in the Thai market. Outsourcing payroll also enables SMEs to get access to HR technology platforms without substantial upfront investment.

Overview of the advantages of payroll outsourcing:

• Decreased overhead expenses for human resources and payroll departments.

• Confidential management of executive compensation and sensitive payroll data.

• Assistance with cross-border employee relocations and international payroll.

• Professional consultation on employment law, insurance requirements, and tax obligations.

• Business continuity protection during administrative staff shortages or personnel changes.

• Optimized workflow processes and enhanced operational productivity.

Overall, these benefits not only enhance day-to-day operations but also deliver cost efficiencies through economies of scale that frequently justify the investment in outsourcing services.

Contact BizWings Thailand at contact@bizwings.co to find out more about how we can support your payroll activities in Thailand!

Payroll Support Service