hailand Labor
Thailand Labor - Severance Tax Calculation
Employees and employers alike are not often aware that the Thailand Revenue Code provides for a special rates of withholding tax and a 300,000 allowance on certain types of severance and wrongful termination payments.
Often employers will calculate the withholding tax on severance and wrongful termination payments incorrectly by applying the general personal income tax rate of 0 - 37% to such payments.
Application of the general personal income tax rare of 0 - 37% and failure to apply the 300,000 Baht allowance almost always leads to the employee being significantly overtaxed.
We highly recommend employees consult an accountant experienced in structuring and calculating termination payments especially in cases of large payments that include other income items such as stock options or pension payments.