Employment and termination cost worksheet for Thailand

01Why this worksheet exists

What gets underestimated about employing people in Thailand is never the salary itself. It is two costs that never appear on the payroll: the statutory employer-side contributions that run every month, and the items paid in one lump on the day employment ends. Almost every surprise we have seen is not "severance was higher than we thought" but "we thought we did not owe it, and we did".

The ways this goes wrong in practice:

• "He chose to retire, I did not dismiss him" does not work in Thailand. Retirement agreed between the parties, a retirement age set unilaterally in the employer's work rules, and an employee asking to retire are all treated in law as dismissal and trigger statutory severance.
• Leaving the retirement unprocessed and letting the person keep working does not save money. Where an employee continues past retirement age and has never received severance, the employment counts as continuous and unbroken; when it finally ends, the calculation runs on the full length of service at the final salary. The bill is deferred, then settled at a higher wage.
• "Put them on a fixed-term contract and simply not renew" does not work either. The exemption requires every condition to be met at once, and even where the form is complete, if the employee is in fact doing the same work as permanent staff a court may still order payment.
• Still withholding social security at the old ceiling is a breach. The contribution base rises in three stages from 2026; a payroll run on the old basis is wrong every single month.
• Nobody will come and tell you about the Employee Welfare Fund or that annual employment report. The fund's contributions and its employee departure and change filing are due by the 15th of the following month, with a 5% penalty per month for late payment. The report is a new mandatory annual filing: it costs nothing and is the easiest item here to miss, because it sits on nobody's old calendar.

02What the three tabs do

Three tabs: one for the monthly cost, one for termination, one for the new rules and the internal deadlines.

• Monthly employment cost tab. Salary, the employer and employee sides of social security, both sides of the Employee Welfare Fund, and paid leave converted to cost, each worked out separately, then totalled as the employer-side monthly cost. For foreign-national positions, the staffing ratio threshold and the work permit sit on two rows of their own, but one is an entry threshold and the other is not a monthly recurring cost, so neither goes into the monthly total and nothing is counted twice against the base salary row.
• Termination tab. Severance by band of continuous service, retirement treated as dismissal, exposure built up by employment continued past retirement age, a second severance on re-hire, whether the fixed-term contract exemption holds, and whether the special redundancy rules apply. The first three rows are three ways of calculating the same statutory severance in three situations. They are mutually exclusive and are never added together — the total takes only the row you selected.
• New-rules self-check tab. The four changes of the past year, judged one by one for whether they apply to you, followed by three items worth reviewing at the same time that are not themselves new rules: the foreign-national staffing ratio and work permits, the internal headcount cost sheet and retirement scheduling, and the tax treatment of Employee Welfare Fund contributions. Two spare columns, owner and internal due date, let the tab serve as an internal control record as it stands.

03The amber cells are the point of the sheet

Every figure that moves from case to case is left blank and shaded amber: your actual salaries and lengths of service, the final severance amount, the contribution base used for the Employee Welfare Fund, the basis for converting paid leave, and the registered capital and Thai staffing ratio behind foreign-national positions. This is not an unfinished sheet. The blanks are deliberate.

The reason is plain. Those figures depend on your contract wording, your salary structure, your roster and whether you hold a BOI certificate, and no two companies are alike. Severance most of all: ordinary dismissal and redundancy caused by machinery or technology upgrades or by a change in the business are two separate sets of rules, the number structures differ, and they cannot be mixed. You have to establish which set this termination falls under, then take the days for the band from the current text of the Labour Protection Act. That is why this is a working paper you and the advisory team fill in together, not an answer.

The reverse also holds: your own current practice is not shaded amber. Whether a rule applies to you, how you handle it today, who owns it, when the numbers are due internally — fill those columns in yourself. They are not waiting on anyone's verification.

04How to work through it

Four steps.

• Run the new-rules self-check first and decide which items apply to your company, then delete the rows that do not.
• Take your current roster and fill in the monthly employment cost tab person by person, to get the employer-side monthly base.
• For factory managers approaching retirement age and long-serving technical staff, fill in a separate termination tab for each, so the exposure is laid out. Remember that the first three rows are three calculations of the same severance: decide which situation this case falls under and fill in that row only. Do not fill all three and add them up.
• Set an internal due date seven to ten days ahead of each statutory deadline, and put a name against it.

Do this kind of stocktake before the annual headcount budget or a decision on production line changes, not after. Once it is filled in, the amber cells still need the advisory team to verify them against your employment contracts, payroll, roster and approvals, and the days, rates and headcount thresholds under the new rules follow whatever the Ministry of Labour and the Social Security Office currently publish.