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

July 30, 2026

Thailand Moves to Reform Old-Age Pension Calculations

Subscribe to Updates

Thailand’s cabinet has approved a draft ministerial regulation introducing significant changes to the calculation of old-age pension and old-age gratuity benefits under the Social Security Fund. The reform would replace the current pension calculation method with a career average revalued earnings (CARE) model designed to better reflect an individual’s lifetime contributions while supporting the long-term financial sustainability of the Social Security Fund. The changes are also intended to improve fairness and align Thailand’s pension framework with international practices.

Key proposed changes under the draft ministerial regulation are outlined below.

CARE-Based Formula for Old-Age Pension Calculations

Currently, old-age pensions are calculated based on the insured person’s average salary over the preceding 60 months. The proposed regulation would replace this approach with the CARE model, under which pension benefits will be calculated based on earnings throughout an individual’s entire working life. Historical earnings will be revalued to reflect their present value before the pension benefit is calculated. According to the Ministry of Labor, this change is intended to better align pension benefits with an individual’s lifetime contribution history and provide a fairer basis for calculating benefits.

Pension Accrual Rate for Contributions Exceeding 180 Months

Under the current rules, insured persons who contribute for more than 180 months receive an additional pension accrual of 1.5% for each completed 12-month contribution period, with any remaining months disregarded. The proposed regulation would instead calculate the additional accrual on a monthly basis at a rate of 0.125% of actual monthly contributions; this aims to make pension benefits more accurately reflect the actual duration of each individual’s contribution history.

Transitional Protections for Insured Persons

The draft regulation includes transitional protections for both existing pension recipients and those who will become eligible within five years of the CARE model taking effect.

For existing recipients, the following protections apply:

  • Those whose benefits would increase under the CARE formula will receive the higher amount from the month following the regulation’s effective date, with no retroactive payments for past benefit periods.
  • Those whose benefits would be lower under the new formula will continue to receive their current pension.
  • For insured persons who become eligible for old-age pension benefits within five years of the regulation taking effect, transitional compensation will apply where the new formula results in a lower pension amount. The compensation will cover 100% of the difference in the first year and will gradually decrease, reaching 20% by the fifth year.

Expanded Entitlement to Old-Age Gratuity Benefits

Under the new regulation, individuals with fewer than 12 months of contributions will be entitled to an old-age gratuity equivalent to the combined contributions made by both the employee and employer, together with any applicable investment returns. This is a significant enhancement from the previous framework, under which such individuals were entitled only to the return of their own contributions and related investment income. Eligibility for this benefit will also no longer depend on a minimum contribution period.

Next Steps

The draft ministerial regulation will next be submitted to the Council of State for legal review, after which the Ministry of Labor will proceed with remaining implementation work, including developing the systems needed to support the new CARE-based pension calculation methodology. This process is expected to take approximately eight to ten months. The regulation will then be published in the Government Gazette and will take effect after a 180-day transition period.

As implementation approaches, employers and insured persons covered under Section 33 (employees under compulsory social security coverage) and Section 39 (former employees who voluntarily continue their social security coverage) of the Social Security Act should monitor further announcements from the Social Security Office for updates on the implementation timeline and consider how these changes may affect their future planning.

Related Professionals

Practices

Employment

Location

RELATED INSIGHTS​ 

January 16, 2026
Employment law specialists from Tilleke & Gibbins’ office in Phnom Penh have contributed the Cambodia chapter to the Guide to Restructuring a Cross-Border Workforce from International Employment Lawyer. This comprehensive global guide, covering 50 jurisdictions worldwide, addresses the complex issue of workplace restructurings, with a particular focus on the needs of multinational companies. The Cambodia chapter was authored by Jay Cohen, partner and director of Tilleke & Gibbins’ Phnom Penh office, and Chanvisal Lok, associate. The Q&A-style chapter provides in-depth analysis of key areas related to workplace restructuring, including: Reduction in workforce; Restructuring or reorganization of the business; Changing terms and conditions; and Areas to watch. A PDF of the Cambodia chapter can be downloaded through the button below. Tilleke & Gibbins also contributed the Laos, Myanmar, Thailand, and Vietnam chapters to the Guide to Restructuring a Cross-Border Workforce 2026. To browse the full guide for all 45 jurisdictions, please visit the International Employment Lawyer website.
Read More
January 14, 2026
Employers operating in Thailand can enforce post-employment noncompete covenants, but success depends on precise drafting and strong evidentiary support. Thai courts will uphold restraints that protect legitimate employer interests and are fair and reasonable in duration, geographic reach, and substantive scope. Overbroad covenants, however, draw judicial skepticism and may fail unless they are drafted in severable, defensible components tied to the employee’s actual role. This article synthesizes recent trends in Thai case practice, explains how Thai courts assess reasonableness in employment restraints, and provides a practical litigation-focused framework for drafting enforceable covenants, preparing evidence, and pursuing relief through the Labor Court. The Legal Framework and Its Practical Implications Thai courts evaluate noncompete covenants under general principles of contract enforceability and public policy, with particular focus on whether a restraint is necessary to protect a legitimate employer interest and proportionate to that objective. In employment matters, this analysis is shaped by the employee-protective tenor of Thai labor law and by the Labor Court’s equitable discretion in determining appropriate remedies. The practical takeaway is that standardized or broadly drafted covenants rarely survive scrutiny. Courts look for a demonstrable nexus between the employee’s actual exposure to confidential information, trade secrets, or customer relationships and the scope of the restraint. Where that nexus is weak or the restraint operates as a blanket prohibition, courts are inclined to decline enforcement or limit relief to a narrowly tailored prohibition. The employer interests most commonly recognized as legitimate in Thai practice include the protection of trade secrets, confidential business information, and goodwill tied to identifiable customer segments or territories. Courts are more likely to enforce restraints where employers can clearly document what information is at risk, why particular customer relationships matter, and how the employee was involved with those assets. Judges also look closely at the
Read More
December 19, 2025
On December 12, 2025, Thailand’s Ministry of Labor published a ministerial regulation prescribing the minimum and maximum wages used as a base for calculating social security contributions. The regulation, which takes effect on January 1, 2026, sets a flat minimum base wage of THB 1,650 per month and a phased increase of the maximum base wage over the following six years, as outlined in the table below. Impact on Social Security Benefits Not only will monthly contributions increase as a result of the adjustment to the maximum wages used as a base for calculating social security contributions, but the maximum benefits available to insured persons will also be enhanced, as shown in the next table. Employer Obligations From January 1, 2026, employers must correctly withhold wages and remit social security contributions for both the employer’s and employees’ portions in compliance with the revised thresholds. Failure to comply may expose employers to penalties under the Social Security Act B.E. 2533 (1990). Employers should ensure that payroll systems are updated as necessary to reflect these changes to the wage ceiling used for social security contribution calculations.
Read More
December 8, 2025
As Thailand transitions into an aged society, retirement policy and workplace protections for older workers have come into sharper focus. With public sentiment increasingly open to working beyond the traditional retirement age, questions about employee rights and employer obligations are more relevant than ever. In October 2025, Prime Minister Anutin Charnvirakul proposed increasing the statutory retirement age to 65 for government officers, citing Thailand’s aged-society status and the potential social and economic benefits of longer working lives. While academics and stakeholders have raised concerns about systemic impacts, public opinion remains divided, with many workers signaling a willingness to continue working beyond the current norm. Against this backdrop, it’s worth revisiting what the Labor Protection Act B.E. 2541 (1998) (LPA) requires in regard to retirement and severance pay. This article explains the current legal landscape under the LPA, with a focus on retirement and severance pay for employees over 60, recent judicial developments, and practical options for structuring postretirement engagements. Retirement as Termination Under the LPA Under the LPA, retirement—whether set by agreement between employer and employee or unilaterally stipulated by the employer—is deemed a termination of employment. As a result, employees who retire under such terms are entitled to severance pay. The law also adds a default rule: if there is no agreed or prescribed retirement age, or if the prescribed retirement age exceeds 60, an employee aged 60 or older may declare an intention to retire. The declaration takes effect 30 days after notice, and the employer must pay severance accordingly. In short, retirement triggered by agreement, the employer’s work rules, or an employee’s valid notice is treated as a termination, and statutory severance pay is owed. Hiring or Rehiring Employees Over 60 Practical issues arise when an employer’s work rules set a retirement age that does not
Read More