Engineering — 6 min
Apart from being a popular tourist destination, Thailand is also Asia’s second-largest economy. The country is also home to a high number of Western expats, remote workers, and digital nomads, thanks to factors such as the low cost of living, reliable internet speeds, stunning scenic beauty, and low crime rate.
But, once you’ve found workers in Thailand, how do you hire them? To start with, you’ll have to establish a local entity in Thailand — which involves getting employment permits, sorting out paperwork, and understanding the country’s employment laws and regulations. You’ll also need to find HR systems to onboard and pay your employees. Finally, you’ll have to continue to stay on top of labor laws and tax practices and manage your employees seamlessly.
Sounds like a lot? Well, it is! International hiring is no mean feat. It’s a costly process that can take months. Unless, you rely on an employer of record to do the hard work for you. An employer of record (EOR) hires workers on your behalf and takes on the legal responsibility of hiring employees in Thailand. An EOR can help you navigate the complexities around local taxes, salaries, benefits, and labor standards in Thailand.
This article will help you understand how EORs work and how you can use one to expand into Thailand. We’ll also explain the costs and benefits of using an EOR, and how to select an EOR partner that’s ideal for your business.
There are dozens of EORs available in the market today, and each offers a different suite of services. So how do you find the right partner who has the infrastructure to support your international expansion needs? Follow these six steps to find the right EOR for your business.
Make a shortlist of your business requirements and rank your chosen EOR providers based on their services.
Here are some questions you can ask to determine whether the EOR is the right fit for you.
Does the employer of record own its own legal entities in the countries they operate in?
How transparent is their pricing? Do you have to pay a flat fee or a percentage of your employees’ take-home as fees? Compared to other alternatives, how much value for money do they offer?
Do their employment contracts secure the rights to the intellectual property your global employees create using your company’s resources?
How secure is their platform? Do they meet the basic cybersecurity standards required to handle sensitive financial and HR data?
How easily can you convert your contractors to full-time employees (and vice versa) using their platform?
What kind of benefits do they offer? Do they provide the mandatory benefits required in Thailand and other countries you intend to expand to?
How long does it take for employees and contractors to get paid after you authorize payroll? How many currencies does the EOR support?
How quickly can you get hold of a customer support rep when you encounter an issue?
An employer of record serves as a passthrough entity that helps you hire employees around the world without setting up local entities and filing endless paperwork. That’s the business model of EOR provider. They typically maintain local entities in Thailand (or wherever you want to hire), and on paper, your employees work for them while they actually provide their services to you.
Not surprisingly, many EOR operators don’t actually own local entities in the countries they operate. Instead, they depend on third-party agencies. As a result, their pricing is unpredictable since their local partners can hike their fees at will, which will end up being passed along to you. You also can’t be sure about keeping your data safe as external providers may not have property data security measures in place, which means there’s always a risk that your data might be compromised.
Reviews and testimonials give you an unbiased look at what an EOR’s existing customers think about the quality of their service. Check out third-party review sites such as Saasworthy, G2, Capterra, or Trustpilot, and read online press coverage and client testimonials to learn more about how well (or not) the EOR treats its clients. You can also find out information about what the EOR does well and where they could improve, such as their onboarding processes, prices, transaction speed, and speed of their customer support response.
Your EOR acts as the face of your brand, so ensure that they’re able to give your employees a positive and engaging experience. At the least, an ideal EOR provider should demonstrate that they’re able to:
Process salaries and invoices quickly while making sure employees and contractors get paid roughly 24 hours after you authorize payroll
Onboard employees quickly — generate contracts, collect new hires’ personnel details, bank account details, etc.
Offer payslips that explain any taxes, levies, and contributions deducted from your employees’ salaries.
Resolve employee queries quickly, and
Maintain a clean UX that’s easy to navigate on web and mobile devices
Salaries for remote roles tend to vary drastically, depending on each individual’s experience, role, and tenure within an organization. So, how do you determine a fair rate for your international employees?
Most companies either set a global minimum wage for all their international employees or benchmark against where their company is located. For instance, a startup based in San Francisco might decide to pay all their developers Silicon Valley salaries, regardless of where they are located.
An EOR can help you strike a balance to ensure you’re paying highly enough to attract top-tier talent, and that you still reap cost savings from hiring from around the world. Your EOR should also have the expertise to offer a modern and locally compliant benefits package to your employees, keeping in mind the individual’s role, skills, and experience.
Due to the nature of EOR operations, your international employees’ contracts will state that they work for the EOR — which is okay since it’s just a proxy for dispensing their services to you. But, just how much security do those contracts provide?
Your EOR’s contracts with your employees should clearly state that any IP your employees produce belongs to you, including any patents, copyrights, and trade secrets. That’s why it’s essential for your EOR to understand how IP rights operate in each country where you want to hire.
Secondly, since an EOR will be processing sensitive financial and human resource data on your behalf, they need to be SOC2 and GDPR-compliant to help protect your employee’s sensitive details.
If you decide to use an EOR, you save time, money, and the hassle of handling the multiple moving parts involved in international hiring. An EOR maintains its own local entity in the country of hiring, which means you don’t have to take on legal responsibilities or worry about the admin and paperwork. Additionally, an EOR also provides you HR systems needed to hire and pay your employees compliantly — onboarding, benefits, taxes, compliance, and payroll.
An employer of record can help you to:
Maintain a local entity via which you can hire workers in Thailand or globally
Issue employment contracts that detail the terms and conditions of employment, including details of working hours, wages, vacation, termination terms, etc.
Create seamless onboarding procedures
Manage global payroll and make sure your employees abroad are paid on time, in their local currency
Classify your workers accurately as employees or contractors
Stay compliant with local labor rules and regulations
Pay taxes and levies in compliance with local tax practices
Manage termination procedures according to local laws.
EOR operators use two main pricing strategies — they either charge a flat rate or a percentage of your payroll expenses. On one hand, older, established EOR agencies charge 15% to 18% of your payroll spending or charge enterprise rates that can be as expensive as $2,000 per employee per month.
On the other hand, modern tech-enabled EORs may charge significantly less, but it’s typically because they don’t have the infrastructure to support you as you scale globally.
In comparison, Remote offers an extensive employer of record service that gives you all the infrastructure needed to hire workers abroad — benefits, taxes, payroll, security, and compliance — at an affordable rate. Our Fair Price Guarantee means there are no commitments or hidden fees.
Compare Remote to other EOR providers to find the solution that works best for your business.
Thailand has several laws that regulate workers’ rights, labor arbitration, compensation, social security, and collective bargaining agreements.
Labor Protection Act BE 2541 (1998).
Labor Relation Act BE 2518 (1975).
Establishment of Labor Courts and Labor Court Procedure Act BE 2522 (1979).
Social Security Act BE 2533 (1990).
Workmen's Compensation Act BE 2537 (1994).
Emergency Decree on the Work of Aliens BE 2560 (2017) (setting out business visa and work permit requirements).
Our guide to hiring in Thailand covers the local employment environment in detail, with detailed explanations of the minimum wage, holidays, leave entitlements, and the provisions for dismissing employees.
Full-time employment contracts can be verbal, but fixed-term contracts must be stated in writing, although we advise employers to always have a written contract signed by both parties whether they’re hiring a full-time employee or a freelancer.
An employment contract between your company and a Thai employee should state:
Both parties' identities, i.e., name, address, etc.
An agreement to hire
A job description
The length of the contract (if it’s a temporary contract)
Effective salary, bonuses, and any other compensation to be paid
The date the contract commences, and
Both parties signatures
Salaries are paid monthly, usually on the last working day of the month. Income taxes range from 0% on salaries up to THB 150k ($4,573) to 35% on salaries of THB 5 million ($152,346) and above. Employer payroll taxes include pension contributions (3%), health insurance (1.5%), unemployment (0.5%), and injury insurance (up to 1%).
There are several mandatory benefits Thai employees are entitled to, namely:
Paid time off: Six days off per year
Public holidays: 16 public holidays
Sick leave: Up to 30 days’ paid leave
Maternity leave: 98 days’ leave, with 45 days paid for by the employer and the rest funded by social security
Education leave for upskilling, government-mandated skills assessment programs, etc.
Personal leave: Up to three days off
Military service leave: Employees can request up to 60 days of paid leave for military exercises
Pensions: Employers are required to set up a provident fund scheme for permanent employees.
Workers can be dismissed without any severance benefits for cause if they’ve been employed for less than 120 days or if they’re found guilty of fraud, negligence, or gross misconduct.
Otherwise, an employee is entitled to up to three months’ notice and 400 days’ severance pay, depending on their tenure.
When you’re hiring workers in Thailand, you’ll have to be careful about classifying them correctly. Misclassifying your workers abroad can have serious consequences for your business, from fines and penalties to paying back wages and benefits to legal disputes.
In Thailand, an employee can file a claim for unpaid entitlements if they determine they’ve been wrongly classified as a contractor while their scope of work actually makes them an employee. Read our guide on employee and contractor misclassification to learn more about misclassification risks.
Working with an employer of record is the best way to avoid the risks of misclassification. Remote has a team of employment experts who can help you correctly classify your workers, and promote compliance with local labor rules.
An employer of record simplifies the process of hiring international employees and helps global businesses focus on finding great talent. So instead of worrying about Thai payroll taxes, benefits, and ever-changing regulations, you can focus on business growth.
Without an EOR, you’d need to create local entities, file for employment permits, create local bank accounts, and comply with tax laws, before you’re cleared to hire employees in a country like Thailand. Remote does all the legal legwork required to hire abroad. Essentially, we simplify your international HR process to a dashboard where you can run your global team with a few clicks.
Whether you’re hiring a developer based in Bangkok, customer reps from Chiang Mai, or designers from Phuket, Remote offers a full-stack global employment toolkit that will help you:
Pay your employees and contractors in countries all over the world in their preferred currencies.
Offer a wide range of benefits, such as stock options, retirement accounts, paid holidays, health insurance, etc.
Withhold payroll taxes, levies, and contributions and remit them to the authorities in a few clicks
Protect the intellectual property and invention rights your employees produce for your company with watertight contracts.
Stay compliant with local employment legislation and keep tabs on any emerging changes that might affect your employees.
Learn more about how Remote can help you scale your global team with skilled workers around the world. Ready to onboard your team in Thailand? Get started with Remote in minutes and make international hiring fast and simple!
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