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FAQs Relating to Labor Laws & Severance Pay

Severance pay in Thailand is governed by the Labor Protection Act and applies when an employee is terminated without lawful cause. The following FAQs provide a general overview of statutory compensation obligations, employee entitlements, and employer responsibilities under Thai labor law.

What is severance pay under Thai labor law?

Severance pay is a statutory compensation payable to an employee whose employment is terminated by the employer without cause, in accordance with the Labor Protection Act. The amount of severance pay depends on the employee’s length of service with the employer.

When is an employee entitled to severance pay in Thailand?

An employee is entitled to severance pay if:

The employer terminates the employment without lawful cause; and
The employee has completed at least 120 days of continuous service.

Severance pay is generally payable regardless of nationality or job position, provided the employee falls within the scope of the Labor Protection Act.

How is severance pay calculated?

It is calculated based on the employee’s last wage rate and length of service, as follows:

120 days but less than 1 year – 30 days’ wages
1 year but less than 3 years – 90 days’ wages
3 years but less than 6 years – 180 days’ wages
6 years but less than 10 years – 240 days’ wages
10 years but less than 20 years – 300 days’ wages
20 years or more – 400 days’ wages

The “wage” includes regular salary and other remuneration defined as wages under Thai labor law.

Is severance pay required in all termination cases?

No. It is not required if the termination falls under lawful grounds specified in Section 119 of the Labor Protection Act, including cases of:

Dishonest performance of duties or intentional criminal acts against the employer
Gross negligence causing serious damage to the employer
Serious violations of work rules or lawful orders
Absence from work for three consecutive working days without reasonable cause
A final court judgment sentencing the employee to imprisonment

Each case must be assessed carefully, as improper termination may still result in severance liability.

When must payment be made?

Statutory compensation must be paid on the termination date or within the timeframe prescribed by law. Failure to pay on time may expose the employer to interest, penalties, and legal claims.

What happens if an employer fails to pay?

If severance pay is not paid as required by law, the employee may file a claim with the Labor Court. The court may order:

Payment of outstanding severance pay
Interest on the unpaid amount
Additional compensation where termination is deemed unfair

Are there other termination-related employer obligations in Thailand?

Yes. Employers must comply with other legal obligations, such as:

Payment of wages, unused annual leave, and other statutory benefits
Issuance of employment documents upon termination
Compliance with the employee welfare fund requirements for employers with 10 or more employees, unless a provident fund or equivalent welfare arrangement is already in place

Is professional legal assistance required for this matter?

While statutory compensation entitlements are set by law, termination decisions and severance calculations can be complex and fact-specific. Thai labor laws are strictly enforced, and improper termination may result in significant legal and financial liability.

Professional legal advice is strongly recommended before terminating an employee or determining statutory compensation obligations in Thailand.

Legal Guidance on Severance Pay in Thailand

Statutory compensation obligations under Thai labor law are strictly regulated, and the outcome of each termination depends on the specific facts and applicable regulations at the time. Missteps in termination procedures or severance calculations may expose employers to legal claims, penalties, and Labor Court proceedings. To ensure compliance and protect your legal interests, Magna Carta Law Firm strongly recommends obtaining professional legal advice before proceeding with any employment termination or severance pay assessment in Thailand.

For professional assistance with labor law and statutory compensation matters, contact Magna Carta Law Firm to arrange a consultation.

DISCLAIMER

This information is provided for general guidance only and does not constitute legal advice. Thai labor laws and enforcement practices may change, and statutory compensation obligations depend on the specific facts of each case. Professional legal advice is recommended before making any termination or severance pay decisions in Thailand.

This FAQ has been updated, reviewed and verified on February 2026 by:

KWANCHAI BOONTAM (Barrister)

Licensed Attorney-At-Law | Licensed Notarial Services Attorney, The Lawyers Council of Thailand
Specialization: Wills and Estate, Civil and Criminal Matters