Thailand Severance Pay Guide 2025: How Much Are You Entitled To?

Understanding Severance Pay in Thailand

If you’ve been terminated from your job in Thailand, you’re likely entitled to severance pay under the Labour Protection Act B.E. 2541 (1998). This guide covers everything you need to know about your rights, how much you can expect, and what additional benefits you can claim.

Use our Calculate your severance pay tool to get an instant estimate based on your salary and years of service.

Severance Pay Rates Under Section 118

The Labour Protection Act mandates that employers must pay severance based on the employee’s length of continuous service:

Length of Service	Severance Entitlement
120 days to less than 1 year	30 days’ wages
1 year to less than 3 years	90 days’ wages
3 years to less than 6 years	180 days’ wages
6 years to less than 10 years	240 days’ wages
10 years to less than 20 years	300 days’ wages
20 years or more	400 days’ wages

How to Calculate Your Severance

Severance is calculated based on your last rate of pay, which includes your base salary and any regular fixed allowances.

Example: Monthly salary of 50,000 THB, employed for 7 years

• Entitlement: 240 days’ wages
• Daily wage: 50,000 ÷ 30 = 1,667 THB
• Severance: 1,667 × 240 = 400,000 THB

Or simply: 50,000 × (240 ÷ 30) = 50,000 × 8 = 400,000 THB (8 months’ salary)

Pay in Lieu of Notice (Section 17)

If your employer terminates you without proper advance notice, you’re entitled to pay in lieu of notice on top of severance pay.

How Notice Period Works

• The employer must give notice at least one pay period in advance (typically 30 days)
• If terminated immediately without notice, the employer must pay wages for the notice period
• This payment is separate from and in addition to severance pay

Example: Monthly salary of 50,000 THB, terminated immediately without notice

• Pay in lieu of notice: 50,000 THB
• Total (with 7 years’ severance): 400,000 + 50,000 = 450,000 THB

Unused Annual Leave Payout (Section 67)

When employment ends (whether by termination or resignation), the employer must pay for any unused annual leave days:

• Calculation: Daily wage × remaining leave days
• Daily wage = monthly salary ÷ 30
• This applies to all employees, including those who resign

Example: Salary 50,000 THB/month, 8 unused leave days

• 50,000 ÷ 30 × 8 = 13,333 THB

Unemployment Insurance from Social Security

If you’ve contributed to Social Security for at least 6 months within the 15 months prior to unemployment, you’re eligible for unemployment benefits:

Terminated by Employer

• 50% of your salary (capped at 15,000 THB contribution base)
• Maximum monthly benefit: 15,000 × 50% = 7,500 THB/month
• Duration: 6 months (maximum total: 45,000 THB)

Resigned Voluntarily

• 30% of your salary (capped at 15,000 THB)
• Maximum monthly benefit: 15,000 × 30% = 4,500 THB/month
• Duration: 3 months (maximum total: 13,500 THB)

How to Claim

1. Register at the Department of Employment within 30 days of termination
2. Report to the employment office once a month
3. Benefits begin 8 days after registration

Use our Social Security Calculator to check all the benefits you’re entitled to.

Tax Treatment of Severance Pay

Severance pay receives favorable tax treatment in Thailand:

• First 300,000 THB of severance is tax-exempt
• The amount exceeding 300,000 THB is taxable as assessable income
• You can choose to calculate tax on the excess separately (not added to other income)

What’s Taxable vs. Tax-Exempt

Payment Type	Tax Treatment
Severance pay (first 300K)	Exempt
Severance pay (above 300K)	Taxable
Pay in lieu of notice	Fully taxable
Unused leave payout	Fully taxable
Social Security benefits	Tax-exempt

Example: Total severance of 600,000 THB

• Tax-exempt portion: 300,000 THB
• Taxable portion: 300,000 THB (can be calculated separately)

When You DON’T Qualify for Severance (Section 119)

Employers are not required to pay severance if the employee is dismissed for:

• Dishonesty in performing duties or committing a criminal offense against the employer
• Intentionally causing damage to the employer
• Gross negligence resulting in serious damage to the employer
• Violating work rules after receiving a written warning (except for serious offenses)
• Abandoning work for 3 consecutive working days without reasonable cause
• Being sentenced to imprisonment by a final court judgment

Important: The burden of proof lies with the employer. If you disagree with the grounds for dismissal, you can file a complaint with the Labour Inspector or bring a case to the Labour Court (no court fees required).

Complete Summary: What You Should Receive

When terminated without cause, here’s everything you may be entitled to:

Payment	Condition	Timing
Severance pay	120+ days of employment	Within 3 days of termination
Pay in lieu of notice	No advance notice given	Immediately
Unused annual leave	Any remaining leave days	Within 3 days
Outstanding wages	Any unpaid salary	Within 3 days
Unemployment benefits	6+ months Social Security contributions	After registration

Steps to Take After Termination

1. Request a termination letter — It should state the reason clearly
2. Calculate your entitlements — Use Calculate your severance pay
3. Verify all payments — Compare what you receive against your calculations
4. Register for unemployment — At the Department of Employment within 30 days
5. Keep all documents — Termination letter, pay slips, employment contract

Special Situations

Fixed-Term Contracts

Employees on fixed-term contracts that expire naturally are generally not entitled to severance. However, if the contract is renewed repeatedly, courts may consider it as indefinite employment.

Probation Period

If you’ve worked at least 120 days (even during probation), you’re entitled to 30 days’ severance pay upon termination.

Company Relocation

If the employer relocates the workplace and you choose not to move, you’re entitled to severance pay plus a special compensation of 50% of the normal severance rate.

Retirement

Employees reaching mandatory retirement age (typically 55-60 as specified in company rules) are entitled to severance pay at the same rates as termination.

Frequently Asked Questions

Can my employer pay severance in installments?

Legally, severance must be paid within 3 days of termination (or on the termination date if specified in the termination notice). However, some employees agree to installment plans. If your employer requests this, ensure it’s documented in writing and consider the implications carefully.

Does severance apply to foreign workers in Thailand?

Yes. The Labour Protection Act applies to all employees working in Thailand regardless of nationality. Foreign workers with valid work permits have the same severance rights as Thai nationals.

What if my employer refuses to pay severance?

File a complaint with the Labour Inspector at the local Labour Protection and Welfare Office. You can also file a case directly at the Labour Court. Neither route requires you to pay court fees or hire a lawyer (though having one is recommended for complex cases).