You are using an outdated browser and your browsing experience will not be optimal. Please update to the latest version of Microsoft Edge, Google Chrome or Mozilla Firefox. Install Microsoft Edge

August 2, 2024

Thailand Adjusts Income Tax Exemption for Severance Pay

On July 17, 2024, Thailand issued the Ministerial Regulation under the Revenue Code regarding Revenue Tax No. 394 (B.E. 2567) to increase the personal income tax exemption amount on severance pay for terminated employees.

Under this ministerial regulation, terminated employees are exempt from personal income tax on their severance pay up to a severance pay amount equivalent to their last 400 days’ wages, capped at THB 600,000. This tax exemption does not apply to severance pay relating to retirement or the expiration of a fixed-term employment agreement.

Previously, this exemption, which has been in effect since 1998, only applied to an amount equivalent to their last 300 days’ wages, capped at THB 300,000. This aligned with the maximum severance pay rate specified in the Labour Protection Act B.E. 2541 (LPA). However, when the LPA was amended in 2019, the maximum severance pay rate was increased from a rate equal to employees’ last 300 days’ wages for those who have worked for 10 years or more, to a rate equal to employees’ last 400 days’ wages for those who have worked for 20 years or more. The recent ministerial regulation was enacted accordingly to align with the updated severance pay rate and account for Thailand’s rising inflation rate.

The new exemption rate applies to assessable income received from January 1, 2023, onward. For any excess severance pay withheld in 2023 and filed in 2024, individuals may request a tax refund from the Revenue Department, according to Revenue Department clarification. This should be done according to the applicable procedure within three years of the income tax return filing deadline.

For more information on severance pay exemptions, or any aspect of employment law in Thailand, please contact Pimvimol (June) Vipamaneerut at [email protected], Ketnut Pukahuta at [email protected], Dusita Khanijou at [email protected], or Chomanut Arif at [email protected].

RELATED INSIGHTS​ 

November 12, 2025
Thailand has amended the Labor Protection Act to significantly expand family leave benefits and strengthen employment protections, effective December 7, 2025. The Labor Protection Act (No. 9) B.E. 2568 (2025), published in the Government Gazette on November 7, 2025, provides enhanced maternity and paternity benefits, introduces new childcare leave provisions, and extends labor protections to certain public sector contractors. Key changes introduced by the amendments are detailed below. Extended Maternity Leave Female employees are now entitled to up to 120 days of maternity leave per pregnancy, increased from 98 days. Employers must pay full wages for 60 days, increased from the current 45 days. New Childcare Leave for Health Complications Female employees who have taken maternity leave are entitled to an additional 15 days of leave to care for newborns with health complications, disabilities, or conditions that could lead to future medical risks. This leave requires a medical certificate and is compensated at 50% of the employee’s regular wage. New Paternity Leave Male employees are now entitled to 15 days of paid paternity leave to support their spouse or partner during childbirth. This new leave allowance may be taken before or within 90 days after childbirth, with employers required to pay full wages for all 15 days. Protection for Public Sector Contractors The law extends protection to individuals engaged under service contracts with government agencies, including central, regional, and local administrations, state enterprises, and public organizations. When such workers are supervised or controlled in a manner similar to employees, the contracting government agencies must provide them with rights and benefits equivalent to those under the Labor Protection Act, including remuneration, weekly holidays, public holidays, annual leave, sick leave, regulated working hours, and rest periods. New Annual Reporting Requirement All employers with 10 or more employees must now submit an
October 29, 2025
On September 15, 2025, Thailand’s Senate approved a draft amendment to the Labor Protection Act (LPA), which is currently awaiting publication in the Government Gazette. The amendment, which will take effect 30 days after publication, extends labor protections to certain service contractors working for state entities, enhances maternity and spousal support leave, and updates employer reporting obligations. Expanded Protections for State-Contracted Service Providers The amendment adds a section to the LPA that extends core labor protections to individuals engaged by government bodies under service contracts. This provision covers workers hired by central, regional, and local government agencies; state enterprises governed by the State Enterprise Labor Relations Act; public organizations; and other state agencies when these entities retain individuals under service procurement contracts (or similar arrangements) and exercise supervision, direction, and control over their work. In such cases, the hiring agencies must provide terms no less favorable than those required under the LPA for remuneration, weekly holidays, traditional holidays, annual leave, sick leave, maternity leave, working days and hours, and rest periods. Ministerial regulations will establish specific criteria for implementation. Disputes regarding rights and duties under this provision will fall under Labor Court jurisdiction. This change aligns the treatment of controlled service contractors with that of regular employees, addressing a longstanding coverage gap in the public sector. Enhanced Maternity Leave and New Caregiving Provisions The amendment includes a maternity leave entitlement of up to 120 days per pregnancy (an increase from the previous 98 days), unless otherwise prescribed by royal decree, and also introduces a new postnatal caregiving leave for mothers in complex medical situations who have used their childbirth leave, granting up to 15 additional days to care for children who are at risk of complications, have abnormalities, or have disabilities. This supplemental leave requires support from a medical
October 20, 2025
Attorneys from Tilleke & Gibbins’ Yangon office have contributed Employment and Employee Benefits in Myanmar: Overview, a Q&A-style guide published by Thomson Reuters Practical Law. The resource provides a concise overview of key legal and practical considerations for employers operating in Myanmar and reflects the country’s most recent regulatory developments in employment law. The chapter addresses the following core topics: Scope of employment regulation: Application of Myanmar labor laws to foreign nationals and Myanmar citizens working abroad. Employment status: Classification of workers, statutory employment rights, and requirements for official employment contracts. Regulation of the employment relationship: Mandatory contract provisions, collective agreements, and procedures for amending employment terms. Wages and working hours: National minimum wage updates, overtime rules, and leave entitlements. Termination of employment: Notice requirements, severance payments, and protections against dismissal. Discrimination and harassment: Statutory protections and remedies under Myanmar labor law. Health and safety: Employer obligations under the Occupational Safety and Health Law and related regulations. Tax and social security: Income tax rates for resident and non-resident employees, and mandatory employer and employee contributions. Intellectual property and post-employment restrictions: Ownership of employee-created IP and enforceability of non-compete clauses. Practical Law, a leading legal reference resource from Thomson Reuters, publishes a wide range of comparative guides for jurisdictions and practice areas worldwide. Its Employment and Employee Benefits series provides practical insights into employment law regimes across numerous countries. To view the latest version of the Myanmar overview, please visit the Practical Law website and enroll in a free trial for full access.
October 15, 2025
Myanmar’s National Committee for Setting the Minimum Wage has introduced another MMK 1,000 daily allowance for private-sector workers, bringing the total minimum daily wage to MMK 7,800 (approx. USD 3.72). Notification No. 1/2025 marks the third such increase in recent years as the government continues adjusting compensation across both public and private sectors. Although the notification was issued on October 14, 2025, it takes retroactive effect from October 1, 2025. Current Minimum Wage Structure In May 2018, the committee established a base minimum wage of MMK 4,800 (approximately USD 2.29) for an eight-hour workday (MMK 600 per hour), applying to all workers regardless of location or job type. The committee has subsequently announced additional daily allowances for private-sector workers: MMK 1,000 effective October 1, 2023, and another MMK 1,000 effective August 1, 2024. With the latest MMK 1,000 daily allowance from October 1, 2025, the total additional allowance reaches MMK 3,000, resulting in a new combined minimum daily wage of MMK 7,800. Alignment with Public Sector Increases The new allowance aligns with increases granted to government personnel. The Ministry of Finance and Revenue’s Notification No. 110/2025 previously granted monthly increases of MMK 30,000 to service and Tatmadaw personnel starting in October 2023 and August 2024. With the latest increase effective October 1, 2025, the total monthly allowance for these personnel now amounts to MMK 90,000. Daily wage employees in government departments received MMK 1,000 increases in the same periods, totaling MMK 3,000 in daily allowances—mirroring the private-sector adjustment. Key Implementation Details The latest announcement confirms several important aspects of the allowance structure: Employees are entitled to the base wage and additional allowances during their entitled leave and holidays, in accordance with the 1951 Leave and Holidays Act. The MMK 3,000 daily allowance is excluded from overtime calculations, which must