Global HiringContact us
English
Portuguese
Spanish
CXC Global
EnglishCXC Global

Employment contracts in Thailand

When creating an employment contract in Thailand, you must take into account both legal and cultural factors. It’s important to follow the labour laws and regulations in order to avoid legal and financial issues and ensure that your employees are satisfied with the contract.

In this guide, we’ll provide everything you need to know to draw up a compliant employment contract in Thailand, including statutory notice period, contract work terms, fixed-term contracts, as well as remote work policies in the country.

Thailand’s employment contract law

The main legislation governing employment contracts in the country is the Labour Protection Act B.E. 2541 (1998) and its subsequent amendments. It outlines the minimum standards for working conditions, such as wages, working hours, leave entitlements, terminations, and so on.

The law requires certain fundamental terms of employment to be clearly stated and agreed upon to ensure clarity and fairness in the employment relationship.

Another important part of the legislation is the role of individual employment contracts in determining the specifics of an employee’s work conditions, which often includes details that go beyond the minimum requirements set by Thailand’s law.

Employment contract terms in Thailand

Employers must also clearly define the terms of employment, including job title, duties and responsibilities, work location, salary, benefits, and duration of contract (indefinite or fixed term). They must specify any probation period, if applicable, and outline the conditions during this period, such as evaluation criteria and notice period of termination.

In addition, the salary structure must be detailed, including the base salary, bonuses, allowances, health insurance, retirement plan, and annual leave. As an employer, you must also be aware of Thailand’s mandatory benefits, such as social security contributions and severance pay. It should outline the conditions under which either party can terminate it. If applicable, include clauses related to non-compete agreements and confidentiality.

There should also be clauses related to dispute resolution that outline the process for handling disputes, including any internal grievance procedures and jurisdiction for legal disputes. Generally, Thailand mandates the resolution of disputes through the Thai court system or arbitration.

Employment contracts policy in Thailand

Thailand’s labour law term of contracts
There are two primary types of employment contracts in Thailand, namely fixed term contracts, and open-ended contracts. A fixed-term contract (ระยะเวลาคงที่) is used for employment situations with a specific duration that is agreed upon in advance. On the other hand, an open-ended contract (สัญญาปลายเปิด) does not specify an end date and continues until terminated by one of the parties involved.

Probationary periods in Thailand
The maximum allowable probationary period for new employees cannot exceed 119 days. Though there is no mandatory minimum duration for the probation period, many employers choose to maximise the full 119-day period. Employers prefer this extended duration as it gives them ample time to assess whether the new hire is a suitable fit for the position and the organisation.

Employment policies in Thailand

If your company has a team of 10 or more employees, you are required to have “work rules.” These rules need to be set out visibly at your place of business within 15 days from when your 10th employee joins. It’s also acceptable to distribute these rules digitally, such as through email or an employee intranet.

All rules must be laid out in Thai and cover essential guidelines regarding:

  • The standard work schedule, including rest breaks
  • Officially recognised holidays and guidelines for taking them
  • Details about overtime and working during holidays
  • When and where employees receive their regular and overtime payments
  • Leave policies
  • Disciplinary measures and penalties
  • Procedures for raising concerns or lodging complaints
  • How employment can end, as well as details on severance and special severance packages

In addition, if your workforce grows to 20 or more staff, you are required to have a written agreement detailing working conditions, which becomes part of the contractual terms with your employees. At a minimum, it should include:

  • Specific terms of employment
  • Working hours and days
  • Salary information
  • Employee benefits and welfare
  • Policy on terminating employment
  • Processes for employees to make formal requests or complaints
  • How the employment agreement can be updated or renewed

If there are doubts regarding the presence of a working conditions agreement, the work rules will stand in as this agreement.

Third-party approval in Thailand.

It’s not necessary to seek external approval in Thailand.

Contract work terms in Thailand

Typically, employment agreements do not have a set end date, and the customary retirement age is 60 years. Thailand’s regulations categorise professional relationships into two distinct types:

  • The “Hire of Work,” which covers independent contractor relationships and is regulated by the Thai Civil and Commercial Code.
  • The “Hire of Service,” which refers to traditional employment relationships and is mainly governed by the Thai Labour Protection Act, BE 2541 (1998).

In addition, employers should be mindful that while fixed-term employment contracts may appear to offer more flexibility for termination, there are significant legal restrictions placed upon them, which can lead to unexpected legal pitfalls. The Thai Labour law mainly distinguishes between two types of contractual terms for employees: indefinite-term and fixed-term contracts.

For indefinite-term contracts, no specific end date is set for the completion of employment. Either party can terminate such a contract with proper notice, or the employer can offer payment in lieu of notice. However, an employer can only legally justify termination without advance notice if there is a reasonable cause.

When using fixed-term contracts, employers must understand that these are strictly regulated and typically reserved for specific types of work that are seasonal or of definite duration. The automatic expiration of a fixed-term contract might seem convenient, but if misapplied, the employer can face legal challenges. Misusing fixed-term contracts for work that is actually of an indefinite or permanent nature can result in a court considering the arrangement to be for an indefinite term, thus imposing the more stringent termination requirements of such contracts.

Given these considerations, employers in Thailand are advised to approach employment contracts with diligence, ensuring compliance with applicable laws to protect against legal disputes and potential liabilities.

Unfair contract terms act in Thailand

The Unfair Contract Terms Act, B.E. 2540 (1997) in Thailand regulates and restricts unreasonable contract clauses that impose a heavy burden or unfairly disadvantage one party, typically the weaker or non-drafting party. It ensures that all contract terms are fair and balanced, preventing stronger parties from taking advantage of their better negotiating position.

In the workplace, this Act is important for protecting employees by making sure employment agreements are fair, especially terms like confidentiality and non-compete clauses. For example, if a court finds that a contract term is too strict or unfair to the employee, it can change or cancel it. This helps keep a fair balance of power between employers and employees, promoting a transparent and just work environment. It ensures that contracts are fair and protects employees’ rights in Thailand.

Contract extension in Thailand

The extension of an employment contract generally depends on the type of contract and the mutual agreement between the employer and employee.

Fixed-term contract extension in Thailand

If a fixed-term contract is not formally extended or renewed before it expires, it will generally end on the specified expiration date. Nonetheless, employers and employees can agree to extend a fixed-term contract. This typically involves drafting a new agreement or an addendum to the original contract. The contract extension should be documented in writing.

Indefinite-term contract extension in Thailand

Indefinite-term contracts do not have a fixed end date. They continue until either party decides to terminate the agreement, following the notice period specified in the contract or as per Thailand’s labour law.

Contract extension for independent contractors in Thailand

There are no specific limits for contract extensions with independent contractors. Instead, the Civil and Commercial Code (CCC) provides general rules about how long obligations under a contract can be enforced, ranging from 2 to 10 years, depending on what the contract is about. It’s important for both the employer and the contractor to agree on the details of the contract, including its duration.

In addition, both parties need to clearly agree on the extension terms. This flexibility allows businesses to adjust based on their needs, but it’s essential to carefully negotiate and document any changes to ensure they are legally valid and meet both parties’ expectations.

If you’re extending your worker’s contract or transitioning from a fixed-term to an indefinite-term contract, you must comply with any notice requirements and legal obligations, such as giving appropriate notice if terminating the contract.

Requirements for extension of work permit in Thailand
To extend a work permit in Thailand, workers must meet specific requirements and provide necessary documents. These typically include a passport valid for at least six more months, proof of current employment, and the appropriate visa. The process also involves coordination with the Thai Ministry of Labour and related governmental bureaus.

Documentation often required for a work permit extension in Thailand includes the following:

  • Current work permit book.
  • Passport with valid non-immigrant visa entries.
  • A letter of employment stating the extension reason from the employer.
  • The company’s commercial registration documents, displaying the business is still operational.
  • Financial statements to validate the company’s operation.
  • Evidence of income tax payment and VAT submissions, if applicable.
  • Proof of Social Security payments.
  • A map indicating the location of the workplace may also be required.

The extension process usually involves filling out forms, paying fees, and possibly attending interviews. Be prepared to provide additional information if requested.

Fixed-term employment contracts in Thailand

Fixed-term contracts in Thailand are used for specific types of work, such as special projects, temporary tasks, or seasonal jobs. The Labor Protection Act requires that these contracts be written and clearly state the start and end dates of the employment. To be valid, the contract must clearly indicate that it is of fixed duration by specifying a predetermined period of employment explicitly.

Maximum duration of a fixed-term employment contract in Thailand

The total duration of a fixed-term contract, including any extensions, cannot exceed two years. If the work continues beyond this period, it might be considered an indefinite-term contract.

The contract should state that the employment will end on the agreed date without the need for further notice.

Restrictions of a fixed-term employment contract in Thailand

There are various restrictions for this kind of contract, including:

  • Probation period: Fixed-term contracts cannot include a probation period.
  • Early termination: The contract cannot be terminated before the end date unless there is a serious breach of contract by either party.
  • Extensions: Fixed-term contracts cannot be extended beyond the two-year limit. If more work is needed, a new contract might be required.

Typically, employers prefer fixed-term contracts for their apparent simplicity in termination compared to indefinite-term agreements; however, there are legal complexities and potential pitfalls that companies should be cautious of under Thailand’s labour law.

When hiring workers under fixed-term contracts in Thailand, you must keep in mind the following aspects:

  • Ensure the contract is in written form from the start of employment.
  • Clearly define the fixed duration of the contract, with start and end dates.
  • Understand the implications and restrictions under the Labor Protection Act and related regulations to mitigate any legal risks.

Extending a fixed term employment contract in Thailand

As an employer, you must be cautious when considering extending or renewing a fixed-term employment contract. Thailand’s labour law prohibits the use of successive fixed-term contracts with the same employee.

If an employer continues to employ a worker on a consecutive fixed-term contracts to avoid giving them permanent status, Thailand’s courts might see this as an attempt to bypass labour protection regulations. In such cases, if the person continues working right after a fixed-term contract ends or if there are multiple fixed-term contracts in a row, the job may be considered permanent, even if the contracts were meant to be temporary.

Working hours in Thailand

The working hours in Thailand are eight hours per day, or 48 hours per week. On working days, employers must set a rest period during work for their employees of not less than one hour per day after the employee has been working for no more than five consecutive hours.

Thailand’s labour law on working hours

The Labour Protection Act (LPA) B.E. 2541 (1998) and its subsequent amendments are the primary legislation regulating working hours, alongside other labour-related matters. This Act establishes acceptable working conditions and upholds the welfare of employees within Thailand’s labour market.

Employers and employees can agree to arrange the working hours for some types of work, as allowed by the country’s labour laws and regulations, but the total number of hours worked must comply with the statutory limits.

Overtime in Thailand

Employees can work up to 36 overtime hours in a week. For regular working days, employees can be paid at 1.5 times of their regular rate. For work on holidays, the pay rate is between two (2) and three (3) times the usual rate of the employee.

However, overtime requirements typically do not apply to management role positions.

Working week in Thailand

Monday – Saturday

Remote work in Thailand

The new Section 23/1 of the Labour Protection Act, which started on April 18, 2023, provides guidance and regulations on remote work. This development represents a shift towards more flexible work options for Thai workers. The law aims to improve employees’ work-life balance, reduce traffic jams, and cut down on energy and fuel use by promoting work-from-home arrangements.

Here are the key guidelines for the new section:

  • Remote work definition: It defines remote work as any work performed by an employee outside of the company’s premises. This includes working from home or other locations that are not the employer’s official workplace.
  • Employer-employee agreement: Remote work must be agreed upon by both the employer and the employee. They must establish an agreement that learly outline the terms and conditions of the setup, including work hours, performance expectations, and communication protocols.
  • Workplace safety and equipment: Employers are responsible for ensuring that remote work setups meet safety standards. This includes providing or reimbursing employees for necessary equipment and ensuring that remote work environments are safe and suitable for performing job duties.
  • Working hours and compensation: Employers must ensure that remote employees adhere to agreed-upon work hours. Compensation for remote work should be in line with the employee’s contract and the country’s labour laws. Any overtime work must be compensated according to the established rates.
  • Data protection and confidentiality: Employers must ensure that remote work does not compromise the security of company data. This includes implementing measures to protect sensitive information and ensuring that remote employees follow company policies on data protection and confidentiality.

Remote work visa in Thailand

The country has introduced new visa options to attract digital nomads—people who work remotely while traveling. The Destination Thailand Visa (DTV) was launched for remote workers, freelancers, and digital nomads, allowing them to live, work, and travel in Thailand for up to 180 days per visa. This is part of Thailand’s effort to become a top spot for digital nomads from around the world.

Is it legal to work remotely in Thailand?

Yes, it is legal to work remotely in Thailand, but there are specific legal requirements that must be met. Foreigners wishing to work remotely in Thailand must have an appropriate visa, obtain a work permit, and pay taxes. For instance, digital nomads—people who work remotely and usually travel to different locations—can now apply for Thailand’s new long-term visa explicitly designed for remote workers.

Remote workers must still comply with Thai law, which traditionally mandates a work permit for any form of employment conducted within the country. Even if the remote worker’s employer is located outside of Thailand, this legal requirement remains for the duration of the stay.

Remote work permit in Thailand

Commonly known as Digital Work Permit, this allows individuals or foreign nationals to legally work remotely within Thailand for employers or clients located outside the country. Applicants typically need to provide proof of employment or freelance work, evidence of sufficient income, and other supporting documents. The application process involves approval from Thai authorities, who will review the applicant’s eligibility and documentation.
Digital workers must comply with Thai laws, including those relating to work and residence. It’s essential to understand the visa requirements and ensure that all conditions are met.

Tailored employment contracts in 100+ countries

Like all countries, Thailand has its own rules and regulations when it comes to employment contracts — and non-compliance could land your company in hot water.

Thankfully, our team is experienced in drawing up tailored, compliant contracts in Thailand (and more than 100 countries worldwide). That means that, when you work with us, you won’t need to waste time worrying about whether you’ve got it right. Instead, you can focus on what matters: growing your business.

FAQ's

What is the legal framework for employment contracts in Thailand?

Employment contracts in Thailand are primarily governed by the Labour Protection Act B.E. 2541 (1998), as amended, and the Civil and Commercial Code. These laws set the minimum employment standards that employers must meet, including wages, working hours, leave, termination, severance and employee rights.

Several other laws may also apply depending on the employee and the business. For example, employers must comply with the Social Security Act for statutory contributions, the Personal Data Protection Act (PDPA) when handling employee information, and immigration laws when hiring foreign employees. The Labour Relations Act and occupational safety legislation may also apply to workplace relations, employee representation and health and safety obligations.

The table below summarises the main legislation.

Law

What it covers?

Labour Protection Act

Minimum employment standards, leave, working hours, termination, severance and employee protections.

Civil and Commercial Code

General contract principles and contractual obligations between employers and employees.

Social Security Act

Employer and employee Social Security contributions and benefits.

Personal Data Protection Act (PDPA)

Collection, use and storage of employee personal data.

Immigration Act and Foreigners’ Working Management Emergency Decree

Employment of foreign nationals, visas and work permits.

Employers in Thailand cannot contract out of the minimum standards set by Thai law. If an employment contract provides conditions that are less favourable than the Labour Protection Act, the statutory minimum will generally prevail.

Thai law generally recognises written, oral and implied employment contracts. However, a written agreement is strongly recommended because it clearly records the employee’s duties, compensation, benefits, confidentiality obligations and termination provisions. Fixed-term arrangements intended to qualify for the statutory severance exemption must satisfy specific legal requirements and be documented in writing from the beginning of employment.

In summary, an employment contract in Thailand should comply with both the Labour Protection Act and the Civil and Commercial Code while reflecting the employer’s operational needs.

What types of employment contracts exist in Thailand?

The most common employment contracts in Thailand are indefinite-term and fixed-term contracts. The right contract depends on whether the role is ongoing or for a specific project or period.

Most permanent employees in Thailand are hired under an indefinite-term contract. There is no predetermined end date, and employment continues until either the employer or employee terminates the relationship in accordance with Thai law.

Thai law permits fixed-term employment contracts, but simply including an end date does not automatically exempt the employer from notice or statutory severance obligations. The Labour Protection Act provides a narrow severance exemption for qualifying fixed-term work, including certain specific projects outside the employer’s normal business, occasional work with a defined completion date and seasonal work. To qualify, the arrangement must meet the statutory conditions, generally be completed within two years and be recorded in a written contract at the start of employment.

. Using repeated fixed-term contracts for ongoing work may expose employers to legal disputes if the arrangement does not reflect the true nature of the employment relationship.

Common types of employment contracts in Thailand include:

Contract type

Typical use

Indefinite-term contract

Permanent positions with no specified end date.

Fixed-term contract

Project work, seasonal work or work with a genuine end date permitted under Thai law. Statutory severance may still apply unless the contract satisfies the specific exemption requirements.

Part-time contract

Employees working fewer hours than a full-time schedule. Part-time employees remain protected by applicable statutory employment standards.

Probationary employment

Usually forms part of an indefinite-term contract rather than a separate contract type. Employees on probation generally receive the same statutory protections as other employees, and employers should consider the severance entitlement that arises once an employee completes 120 days of continuous service.

Foreign companies should choose the contract type in Thailand carefully. A contract labelled as fixed-term will not necessarily be treated as one if the employee performs ongoing work that forms part of the employer’s normal business.

In summary, most employers in Thailand use indefinite-term contracts, while fixed term contract in Thailand arrangements should only be used where the work genuinely has a defined end point.

Are written employment contracts required in Thailand?

No. Thai law does not require every employment contract to be in writing. An employment relationship can exist through a verbal agreement or the conduct of the parties.

Despite this, it is still advisable for employers use a written employment contract in Thailand. A written agreement helps both parties understand their rights and responsibilities and provides evidence if a dispute arises over salary, benefits, notice periods or termination.

A written contract in Thailand also makes it easier to document matters such as:

  • Job title and duties.
  • Salary and payment frequency.
  • Working hours.
  • Probation arrangements.
  • Leave entitlements.
  • Confidentiality obligations.
  • Notice periods.
  • Post-employment restrictions where appropriate.

Written documentation is particularly important for qualifying fixed-term contracts. An employer seeking to rely on the statutory severance exemption for certain fixed-term employment must enter into a written contract at the beginning of employment and satisfy the other conditions under the Labour Protection Act.

Where employees work remotely, the employer and employee should also document the remote-working arrangement in writing or electronically. This may address the duration of the arrangement, working days and hours, overtime, leave, responsibilities, equipment, expenses and the employee’s right to disconnect outside agreed working hours.

For international employers, bilingual contracts are common. If both Thai and English versions are used, the contract should clearly state which version will prevail if there is any inconsistency. Employment proceedings and official communications in Thailand are generally conducted in Thai, so an English-language contract may need to be translated for use before Thai authorities or courts. Using a carefully aligned bilingual agreement can reduce interpretation issues and provide a better employee experience.

Although written employment contracts in Thailand are not legally mandatory, they are strongly recommended for both local and international employers.

What must be included in an employment contract in Thailand?

Thai law does not prescribe a standard employment contract, but every contract should clearly set out the key terms of employment. A well-drafted contract helps employers meet their legal obligations and reduces the risk of misunderstandings later.

Most employers in Thailand include the following information.

Contract term

Why?

Job title and duties

Defines the employee’s role and responsibilities.

Employment start date

Confirms when employment begins and supports the calculation of continuity of service and statutory entitlements.

Workplace

Identifies the employee’s normal work location or remote work arrangements.

Salary and payment frequency

Records remuneration and when it will be paid.

Working hours

Sets ordinary working hours and overtime arrangements where applicable.

Leave entitlements

Documents annual leave, sick leave and other benefits.

Probation period

Explains whether a probation period applies and any expectations during that period.

Notice period

Specifies how either party may terminate the employment relationship.

Confidentiality

Protects confidential business information during and after employment where appropriate.

Depending on the role, employers in Thailand may also include intellectual property provisions, bonus arrangements, commission structures, hybrid working arrangements and post-employment restrictions. Any post-employment restriction should protect a legitimate business interest and be reasonable in its duration, geographic scope and restricted activities to improve its prospects of enforceability.

Where remote work is agreed, the employer should document the arrangement in writing or electronically. The agreement may address working days and hours, rest periods, overtime, leave, work responsibilities, supervision, equipment, expenses and the duration of the remote-working arrangement.

The contract should also be consistent with Thai employment laws. Terms that provide less favourable conditions than the statutory minimum may not be enforceable.

In summary, a clear labour contract in Thailand should record the key employment terms while remaining consistent with the minimum protections provided under Thai law.

Can employers modify or terminate employment contracts in Thailand?

Yes, but employers in Thailand cannot change important employment terms without the employee’s agreement. Changes to salary, duties, working hours or other fundamental terms should generally be discussed and documented before they take effect.

Minor operational changes may be possible depending on the employment contract and the nature of the role. However, significant changes imposed unilaterally may give rise to employment disputes if they disadvantage the employee.

When updating an employment contract in Thailand, employers should:

  • Explain the proposed changes.
  • Obtain the employee’s agreement where required.
  • Record the changes in writing and keep updated employment records.
  • Confirm that the amendment remains consistent with statutory minimum standards, workplace rules and any applicable agreement relating to employment conditions. 
  • Coordinate related payroll, benefits, tax or immigration updates.

Employment contracts in Thailand can also be terminated in accordance with the Labour Protection Act and the agreed notice provisions. Depending on the circumstances, employers may need to provide notice, payment in lieu of notice, statutory severance or other contractual entitlements.

Before terminating employment in Thailand, employers should also consider whether:

  • The termination complies with Thai labour law.
  • Severance pay is required.
  • Final salary and accrued benefits have been calculated correctly.
  • The employee’s contractual rights have been met.

For international employers hiring through an Employer of Record, the EOR manages these employment changes and termination requirements under Thai law while the client continues to manage the employee’s day-to-day work. Because the EOR is the legal employer, it coordinates the formal process, prepares the required documentation and calculates the employee’s statutory and contractual entitlements. This gives the client access to local guidance before a decision is implemented and helps reduce avoidable termination disputes.

In summary, employment contracts can be updated or terminated in Thailand, but employers should follow the agreed contract terms and Thai labour laws before making significant employment decisions.

How do fixed-term contracts work in Thailand?

A fixed-term contract in Thailand specifies a definite employment period or end date. However, employers must distinguish between a contract that merely has an agreed end date and a qualifying fixed-term contract that is exempt from statutory severance under the Labour Protection Act.

Unlike an indefinite employment contract, it is intended to end automatically when the agreed project or contract period finishes. A contract with a genuinely definite duration generally expires at the end of the specified period without advance notice. Nevertheless, statutory severance may still be payable unless the arrangement meets the specific fixed-term exemption or another statutory exception applies.

The severance exemption is narrowly defined. It generally applies to employment for a specific project outside the employer’s normal business or trade, occasional work with a definite ending or completion, or seasonal work performed during the relevant season. The work must be completed within no more than two years, and the written contract must be entered into at the beginning of employment.

Thai labour law does not allow employers to use fixed-term contracts simply to avoid employment obligations for permanent roles. If an employee is performing work that forms part of the employer’s ongoing business, the contract may be treated as an indefinite-term contract, regardless of its title.

Fixed-term contracts in Thailand are commonly used for project-based work, seasonal work, temporary assignments and work with a clearly defined completion date

The contract should clearly state the duration of employment and the event or date on which it will end. It should also include the same key employment terms found in any other employment contract in Thailand, such as salary, working hours, leave entitlements and confidentiality obligations.

Before using a fixed term contract Thailand, employers should consider whether the role is genuinely temporary. Using the wrong contract type can increase the risk of employment disputes, particularly if the employee later claims they should have been treated as a permanent employee.

An EOR in Thailand can assess the proposed role, prepare the appropriate contract and explain the notice and severance consequences before employment begins. This is particularly valuable for international companies unfamiliar with Thailand’s narrow fixed-term severance rules.

In summary, a fixed term contract in Thailand should only be used where the work has a genuine end date rather than for ongoing positions that are part of the employer’s normal business.

Can a fixed-term contract in Thailand become permanent?

Yes. A fixed-term contract in Thailand may effectively become permanent if the employment relationship no longer reflects a genuine fixed-term arrangement.

Thai courts look at the substance of the employment relationship rather than simply the title of the contract. If an employee continues working after the contract expires, and the employer knows this and does not object, Thai law presumes that the parties have entered a new employment contract on the same terms, which either party may terminate by giving the applicable notice.

An arrangement may also be treated as indefinite or may lose the intended fixed-term severance treatment, where the employee is repeatedly given new fixed-term contracts for the same ongoing role or performs work that forms part of the employer’s normal business.

This is particularly relevant where employers repeatedly renew contracts without a genuine business reason. Although Thai law does not automatically convert every renewed contract into permanent employment, repeated renewals can make it more difficult to argue that the employment was genuinely temporary. Successive contracts may also be considered together when determining continuity of service and statutory severance entitlements.

Before renewing a fixed-term contract in Thailand, employers should ask:

  • Is the project or temporary assignment still continuing?
  • Has the employee moved into an ongoing business role?
  • Would an indefinite-term contract better reflect the employment relationship?

Reviewing these questions before each renewal helps ensure the contract remains consistent with the nature of the work. When employees are hired through an Employer of Record, CXC can monitor contract end dates, review proposed extensions and prepare the appropriate renewal or conversion documentation. This helps clients avoid accidental extensions and provides greater visibility over the employment and cost implications of each decision.

To summarise, renewing a fixed-term contract does not automatically create permanent employment, but employers should ensure the arrangement genuinely remains temporary.

How did the 2024 foreign income tax change affect employment contracts in Thailand?

The 2024 foreign income tax change has affected how some employer’s structure compensation for internationally mobile employees. The change concerns the employee’s personal income tax position and does not automatically amend existing employment contracts. However, it may affect how cross-border compensation, tax support and assignment benefits are documented.

From 1 January 2024, Thai tax residents who earn assessable foreign-sourced income from that date onwards may be subject to Thai personal income tax when the income is remitted into Thailand, even if it is remitted in a later tax year. Income earned before 1 January 2024 is outside this revised treatment.

An individual is generally treated as a Thai tax resident when they are present in Thailand for at least 180 days during a calendar year. Whether foreign-sourced income is taxable depends on factors including the employee’s tax residence when the income was earned, the nature and source of the income, when it was earned and whether it is remitted into Thailand.

Because of this, employers hiring expatriates, remote workers and internationally mobile employees have reviewed how compensation is structured and documented.

For some employers, this has prompted updates to employment contracts and assignment agreements covering matters such as:

  • Tax equalisation or tax assistance.
  • Overseas allowances.
  • Relocation benefits.
  • Cross-border bonus arrangements.
  • Responsibilities for obtaining tax advice.

The impact varies depending on where the employee lives, where they perform their work and whether they become a Thai tax resident. Companies hiring local Thai employees are generally less affected than businesses relocating employees into Thailand. Income from employment exercised in Thailand may be taxable in Thailand regardless of whether the remuneration is paid locally or from overseas, so employers should not assess the position solely by reference to the payment location.

Foreign tax paid may be available as a credit were permitted by an applicable double taxation agreement, although the employee may need supporting documentation to claim the relief. Employment and assignment agreements should clearly explain whether tax assistance is provided and avoid unintentionally guaranteeing a particular personal tax result.

If your workforce includes expatriates or employees working across multiple countries, employment contracts should align with your broader payroll, tax and mobility policies. CXC can coordinate the local employment and payroll elements of an international assignment, helping businesses maintain consistent documentation and identify when specialist tax advice may be required.

In summary, the 2024 change does not create a new mandatory employment-contract clause, but it makes clear tax and mobility provisions more important for internationally mobile employees. Using CXC’s EOR and payroll support gives businesses an established framework for coordinating local employment, compensation and payroll requirements in Thailand.

How are employment contracts in Thailand different from other countries?

Employment contracts in Thailand are generally more prescriptive than in many other countries because employers cannot contract out of the minimum protections provided by Thai labour law.

While many jurisdictions allow greater flexibility in negotiating employment terms, Thailand’s Labour Protection Act sets minimum standards for matters such as working hours, leave, termination and severance. Employment contracts in Thailand can provide more favourable benefits, but they cannot reduce an employee’s statutory rights.

International employers should also be aware of several practical differences.

Area

Employment contracts in Thailand

Statutory minimum protections

Cannot be reduced by contract.

Written contracts

Not legally required but strongly recommended.

Fixed-term contracts

Should only be used where the work is genuinely temporary.

Severance

Statutory severance may apply depending on the reason for termination and the employee’s length of service.

Foreign employees

Separate visa and work permit requirements apply before employment begins.

International companies often use employment contract templates from other countries when entering Thailand. These documents may not reflect local labour laws or employment practices, particularly around termination, probation, severance and statutory benefits. They may also contain restrictive covenants, intellectual property terms, payroll provisions or choice-of-law clauses that require adaptation for Thailand

Reviewing contracts before hiring employees can help avoid compliance issues later. An Employer of Record provides international companies with locally appropriate documentation without requiring them to create and continuously maintain their own Thai contract templates.

In summary, employment contracts used in other countries should not be copied into Thailand without reviewing them against Thai employment laws and local employment practices.

How can CXC reduce legal risks when creating employment contracts in Thailand?

CXC helps employers prepare employment contracts that align with Thai labour laws and support compliant hiring from the employee’s first day of work.

Employment contracts are often the first legal document an employer signs with a new hire. If key terms are unclear or inconsistent with Thai employment law, issues may not become apparent until there is a dispute over salary, leave, termination or severance. Correcting those issues after employment has started is often more difficult than getting the contract right at the outset.

When businesses use CXC’s Employer of Record in Thailand, we prepare compliant employment contracts and manage the local employment obligations that follow. This includes payroll administration, statutory contributions, leave administration, employment record management and support throughout the employee lifecycle.

For employers expanding into Thailand, CXC helps ensure contracts are aligned with:

  • Thai labour law requirements.
  • Local payroll and statutory obligations.
  • The agreed employment terms.
  • The practical needs of both the business and the employee.

Because CXC also supports hiring across multiple countries, businesses can apply consistent employment standards while ensuring each contract complies with local laws.

Whether you are hiring one employee or building a larger team, CXC helps reduce legal risks by ensuring employment contracts are appropriate for Thailand rather than relying on templates drafted for another jurisdiction.

Compliantly hire workers anywhere with CXC

With our EoR solution, you can engage workers anywhere in the world, without putting your business at risk. No more worrying about local labour laws, tax legislation or payroll customs — we’ve got you covered.

DISCLAIMER: The information contained on this website is provided for general informational purposes only and should not be construed as legal, tax, or other professional advice on any subject matter. While we endeavor to ensure that the content is accurate and up to date, we make no warranties or representations of any kind regarding the completeness, accuracy, reliability, suitability, or availability of the information contained herein. The content on this site is not intended to be a substitute for professional advice. Users should not act or refrain from acting based on any information on this website without seeking the appropriate legal, tax, or other professional advice tailored to their specific circumstances from qualified professionals. We expressly disclaim all liability in respect to actions taken or not taken based on any or all of the contents of this website. Use of the information on this site does not create an attorney-client, tax advisor-client, or any other professional-client relationship between the user and the website or its authors.

BLOG

Helping businesess to compliantly engage talent since 1992