What to Ask HR When You Receive Your Paycheck Monthly

Why the employee must pay 5% to SSF. What is social security Funds? How much for the contribution? And What benefits are insured persons entitled to?

social security funds

Social security is a fund providing security and coverage to insured individuals.

Employers and employees are required by the Social Security Act to make contributions to the Social Security Fund on a monthly basis.

The contribution rate is 5% of the employee’s salary.

The minimum salary to be calculated is THB 1,650 and the maximum is THB 15,000; therefore, the minimum contribution is THB 83, and the maximum is THB 750. Even though an employee’s salary exceeds THB 15,000, the maximum contribution will be THB 750.

However, Due to Covid 19 situation, there has been COVID-19 relief measures for social security. The cabinet has approved a contribution reduction to the Social Security Funds as follow;

Social Security Fund

An insured person is entitled to receive the following benefits:

1. Provident Fund Deduction

provident fund deduction


What is Provident fund? How much for the contribution? And What benefits of provident fund?

Provident fund is voluntarily established by both, the employer and the employees, consisting of the contributions from both parties call “Employer’s contribution & Employees contribution”.

There are 2 main two objectives of Provident fund;

1) to promote the saving of employees

2) to provide the members and their families the guarantee of future security in case of resignation, retirement, disability or death.

The involved parties are: the company or employer, Staff or employee, Fund Committee (representatives of both employer and employee that administrate the fund affair) and the Asset Management Company. Normally the employee’s contribution goes from 2 to 15% of the salary varies from the company to company.

2. Withholding Tax (“WHT”) Deduction

withholding tax deduction

What is the tax that is deducted from the salary every month? How is tax calculated?

Personal Income Tax (PIT) Deduction

Personal Income Tax (PIT) is a direct tax levied on income of a person. In general, a person liable to PIT has to compute his tax liability, file tax return and pay tax, if any, accordingly on a calendar year basis.

However, employers are responsible for deducting the personal income tax from the employee’s salary based on employee’s total yearly revenue calculation and submit to the Revenue Department every month.

Personal Income Tax (PIT) Deduction

In the personal income tax structure, taxable income of THB 150,000 or lower is exempt from tax, THB 150,001 – 300,000 is charged 5% , THB 300,001 – 500,000 is charged 10% , THB 500,001 to THB 750,000 is charged 15%, THB 750,001 – 1 million is charged 20% and 1,000,001 to 2 million is charged 25%.

The income band for the 30% bracket is for 2,000,001 – 5,000,000 baht, and the range for the top rate of 35% starts at income over 5 million.

 

personal tax income

Tax Deductions & Allowances

These are intended to lessen the personal income tax burden or reduce the tax load.

Each individual taxpayer can claim THB 60,000 personal allowance , a 50% expense allowance (but not exceed THB 100,000), a THB 30,000 child allowance , insurance premiums of up to THB 100,000, up to THB 200,000 for retirement insurance premiums and up to THB 100,000 for mortgage interest, plus a raft of contributions such as up to THB 9,000 for social security funds, provident funds, and retirement mutual funds (RMFs).

3. Prorated Salary

How do you calculate the pro-rate salary for the employee who work less than 1 month / incomplete month ?

For salaried employee, pro-rated salary of incomplete month is calculated by multiplying

number of working days with employee’s daily wage rate

According to the Labour Law section 68*, “for the purpose of calculating overtime pay, holiday pay, and holiday overtime pay, in the case where the employee is paid wages on a monthly basis, the hourly wage rate on a working day shall mean a monthly wage divided by a multiple of thirty and the average number of working hours on a working day”, therefore, the employee’s daily wage rate is generally determined by taking the employee’s monthly wage rate and dividing by thirty.

The formula for the incomplete month calculation is (Basic Salary/30) x No. of working days in the month

4. Overtime

overtime

How do you calculate the Overtime for the employee?

Any work outside and beyond the normal working hour are considered as “Overtime work”. Any work on a holiday (weekly holiday, public holidays, or vacation) is considered as “Holiday work” and working beyond the normal working hours on a holiday is the “Overtime on Holiday”.

Overtime Type OT Entitlement

Overtime on a normal working day 1.5 times the normal hourly wage rate

Normal working hours on a holiday 1 times the normal hourly wage rate

Overtime on holiday Three times the normal hourly wage rate

 

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