There are many advantages to hiring workers based in Thailand, especially with the high concentration of digital nomads who now call the country home. Thanks to an affordable cost of living, a rich culture, and a thriving tech industry, Thailand offers a deep pool of talent to draw from.
But there’s still a lot to consider before you can start hiring. As with any other country, employers working with Thai talent need to adhere to the local employment regulations and practices, or risk significant legal and financial ramifications.
For many companies, contracting with a professional employer organization (PEO) is an efficient way to manage compliance and logistics when hiring employees in Thailand.
Working with a PEO in Thailand
A PEO is a third-party organization that handles human resources functions for your company, including onboarding, payroll, taxes, and benefits administration. While many companies use PEOs to streamline HR operations—especially small businesses and startups that don’t have a dedicated HR department—it’s important to note that PEOs act as a co-employer, so the hiring company and the PEO share the responsibilities and risks of employing workers. This means your company will need a legal entity in Thailand in order to partner with a PEO in the country.
Employment regulations vary by country, and Thailand is no exception. When you hire someone in Thailand, you must comply with their local laws. A PEO based in Thailand will have in-depth knowledge of local employment and tax regulations, which will help ensure compliance for your company.
A PEO in Thailand can save you time by handling some of the admin, logistics, and HR tasks, such as:
- Ensuring compliance in all employment matters, from hiring to termination
- Developing Thailand-specific employment contracts
- Managing payroll and taxes according to Thai laws and in the local currency
- Overseeing and documenting time off, including paid leave and holidays
- Administering benefits in line with statutory requirements
- Keeping you up to date with relevant changes to local employment rules and policies
Benefits of using a PEO in Thailand
Establishing a business in Thailand is an expensive and time-consuming process. For example, if you plan to hire expatriates to work for your company, you must demonstrate that you have at least $90,000 in registered capital per visa application and prepare to wait months for them to receive permission to work in the country. This is just one of the many fees businesses must pay to start hiring in Thailand, and the costs add up quickly.
Working with a PEO can help offset some of these costs because as a local partner and co-employer, the PEO can handle some of the administrative tasks that might otherwise require specialized local staffing. Here’s what this means for your business:
- Faster market entry: With a PEO, it’s possible to enter the Thai market much faster by leveraging their local knowledge and expertise.
- Fewer administrative tasks: The PEO can handle the time-consuming HR admin tasks for your Thailand-based workers, freeing up your time for other priorities. The PEO can also streamline HR processes to improve efficiency and better manage your Thai workforce.
- Improved focus: Instead of wading through stacks of paperwork and researching employment rules in Thailand, your team can focus on core business activities.
- Better recruiting and training: Working with a PEO can help you attract top talent in Thailand. Prospective employees can feel confident knowing they’re working with a company that takes compliance seriously and will adhere to the standards and customs they expect.
- Fewer labor issues: When your workers in Thailand have questions or concerns, they can get help from someone who understands their local laws.
Delegating administrative and human resources tasks to a PEO doesn’t mean giving up autonomy over your workers. In this co-employment relationship, your company will still oversee their day-to-day work and responsibilities while the PEO handles behind-the-scenes administrative tasks.
Choosing the right PEO in Thailand
The success of any relationship rests on finding the right partner, including choosing a PEO to oversee your hiring in Thailand. Your company’s name and reputation are on the line, so here are some considerations to help you choose the best PEO for your company.
Well-established infrastructure
Whether hiring in Thailand or elsewhere, it’s critical to partner with a PEO with in-depth knowledge and expertise in the country where you plan to hire. Your PEO partner in Thailand should help keep you compliant with Thai labor laws and tax regulations. For example, did you know:
- Thai workers are entitled to 13 paid holidays, at least six days of paid annual leave, 30 days of sick leave, and three personal days yearly.
- Female employees are entitled to maternity leave of up to 90 days, half of which is paid. Male employees are only entitled to paid statutory paternity leave if they work in the government sectors.
- The standard working hours are 8 hours a day or 48 hours a week.
- The tax rate depends on income, ranging from 5% to 35%.
- Employment contracts end either upon completion of the specified period with no notice required, or if no period is specified, either party can terminate the contract by providing written notice before any wage payment due date, effective on the following payment date, with a maximum notice period of three months.
- Employers are allowed to implement probationary periods without a legal maximum duration. Nevertheless, once an employee's tenure surpasses 119 days, they become eligible for statutory compensation upon termination. Employers typically consider this when determining probationary durations.
- Thai labor laws require employers to provide a physically and mentally safe workplace.
These are just some of the rules and norms a Thai PEO should be aware of as your local partner and co-employer.
A well-established infrastructure also allows you to take advantage of economies of scale when it comes to offering employee benefits, insurance, and more. Because PEOs typically work with multiple organizations, they have a larger employee base from which they can negotiate. This allows you to offer better benefits packages and attract more talent.
Transparent pricing
As with any vendor partner, it’s imperative to choose a PEO that provides transparent pricing for their services and clearly explains what’s included in the price. A PEO should be able to provide detailed and accurate information about the total cost of employment in Thailand.
Location-specific compensation
A good PEO partner will give you insights into what makes an offer competitive in the Thai job market. Their experience and knowledge should help you to tailor offers to local standards, ensuring that you compensate your team equitably.
Integration with existing processes
When you hire global workers, it’s critical to integrate them into your existing processes and platforms, including productivity, expense management, and equity. The better your PEO integrates with your existing company protocols, the easier it is to onboard new hires.
Use Oyster to onboard Thai talent
When hiring in Thailand, a PEO can streamline the process and make it easier for you to tap into the local talent pool. But due to the co-employment requirement, a company can only engage a PEO in Thailand if it has already set up a legal entity in the country.
If you want to avoid the hassle of setting up an entity, you might instead consider working with an employer of record (EOR) in Thailand. Similar to a PEO, an EOR is a third-party entity that manages legal and administrative obligations related to employment on behalf of their clients. However, unlike a PEO, EORs directly employ individuals through their own legal entities in foreign jurisdictions.
An even better option is to use a global employment platform like Oyster. Oyster’s Direct+ infrastructure lets you hire in 180+ countries without the cost and hassle of opening an entity or working with multiple local EOR providers. With an automated system that’s built for compliance, Oyster provides a robust and easy-to-use platform for businesses that want to hire globally. We take care of compliance, payroll, benefits, and more, so you can focus on your business.
Learn how Oyster’s all-in-one solution makes it easy to compliantly hire, pay, and manage a global team.
About Oyster
Oyster is a global employment platform designed to enable visionary HR leaders to find, engage, pay, manage, develop, and take care of a thriving distributed workforce. We let growing companies give valued international team members the experience they deserve, without the usual headaches and expense of hiring abroad.
Oyster enables hiring anywhere in the world—with reliable, compliant payroll and great local benefits and perks.
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