Severance and final pay in Thailand: three things are decided on the day you are let go

Most of what people want to know about being dismissed in Thailand — how much, by when, and whether the reason was any good — is settled by a handful of sentences in one Act, and three of those sentences do their work on a single day. After that day the reason cannot be improved, the money in lieu of notice is already late, and a clock is running that most employers do not know about. Here is what the Labour Protection Act actually says, and which numbers in the English-language advice are out of date.

Compiled by the Town Wire News desk · Last verified October 2026 · How we made this

The Act, and which version of it you are reading

Almost everything below is in one statute: the Labour Protection Act B.E. 2541, which is 1998. It has been amended eight times, and two of those amendments do most of the damage to older English-language summaries.

The Labour Protection Act (No. 6) B.E. 2560 was published in the Royal Gazette on 31 August 2017 and took effect the following day. It added section 118/1, which put retirement inside the severance regime for the first time.

The Labour Protection Act (No. 7) B.E. 2562 was published on 5 April 2019 and took effect thirty days later. It is the big one. It added a sixth step to the severance ladder, rewrote the final-pay deadline, created a separate section for money in lieu of notice, made a change of employer conditional on the employee’s consent, and rebuilt the relocation provisions.

That matters because the consolidated texts of the Act that circulate on Thai government mirrors are not all the same age. One of the versions we found this month, hosted by a Thai university law faculty and looking every bit as official as the rest, is the 2011 consolidation — complete, well typeset, and stopping at the fourth amendment. Its section 118 has five steps and no 400-day rung. If you are checking a number against a Thai PDF, look for the footnotes at the bottom of the page that record which amendment last touched that section.

The three things that are decided on the day

Take them in the order they bite.

Same day: money in lieu of notice

Section 17 is about ending an open-ended contract. Either side may end it by giving written notice at or before a payday, to take effect on the following payday, and nobody can be required to give more than three months. The third paragraph lets the employer short-circuit that: it may pay the wages that would have run to the notice date and put the employee out of work at once.

Until 2019 the Act did not say when that money had to arrive. Now it does. Section 17/1, added by the seventh amendment, requires the employer to pay a sum equal to the wages the employee would have received from the day they are put out of work to the day the termination would have taken effect, and to pay it on the day the employee is put out of work.

So if you are walked out on a Tuesday and told the money will come with the month-end run, that is already late by the Act’s own clock — and section 9 starts charging interest on it.

Three days: everything else

The seventh amendment also replaced section 70. Its numbered paragraphs are the ordinary rules: monthly, daily, hourly or piece-rate wages at least once a month; overtime, holiday pay and holiday overtime at least once a month; anything else on the agreed date. Then comes the last paragraph, and it is the one to know:

Two things follow. The first is that the deadline is not the payday; it is three days. The second is the asymmetry: the three-day rule is triggered by the employer terminating. If you resign, section 70(1) governs and your last salary follows the normal cycle. Same money, same company, different clock, decided entirely by who ended it.

The 2019 wording also widened what has to be inside the three days: not just wages and overtime but the money the employer has a duty to pay under this Act, which is the language that pulls in severance under section 118 and the payment for unused annual leave under section 67.

Closing for good: the reason

Section 119 is the list of grounds on which no severance is owed. The list is short and it is the whole list. But the sentence that ends the section is the one that decides most disputes:

Read it as a rule about paperwork rather than a rule about conduct. An employer that dismisses you with a warm letter about restructuring, and then discovers in the labour office that you had also been late a great deal, cannot use the lateness. It was not written down on the day, so it does not exist for this purpose.

Which is why the single most useful thing to do on the day is unglamorous: get the termination in writing and read what reason it gives. If it gives none, that is not a gap in your favour or theirs — it is a gap that has now closed in your favour.

The ladder, and the step nobody translated

Section 118 sets severance as a number of days of your last wage rate — or, for piece-rate workers, the wages of that many final working days — and it is expressed as a floor: not less than. It is graded by completed continuous service.

The seventh amendment did this in two moves, which is why the change is easy to miss. Section 14 of the amending Act replaced 118(5) so that it reads ten years but not twenty; section 15 then added a new 118(6) for twenty years and above at four hundred days. The explanatory note at the end of the Act lists it among the reasons for legislating: to increase the rate of severance for employees who have worked continuously for twenty years or more.

For a twenty-year employee that is a hundred days of pay that did not exist before 2019 — more than three months. It is the single most valuable sentence on this page, and it is the one most often missing from English summaries written before that year.

What “continuous” means, and the 120-day line

Everything hangs on a count of days, so the Act says how to count them.

Section 19 requires holidays, leave days, days the employer permitted the employee to take off for the employee’s benefit and days the employer ordered the employee to take off for the employer’s benefit all to be counted into the period of work. A month of enforced shutdown does not reset you.

Section 20 goes further. Where an employee does not work continuously because the employer intends to deny that employee a right under the Act, then no matter what duties they were given and no matter how long the gaps between engagements were, every period is counted together. That is the answer to the arrangement where a contract ends every eleven months and restarts a fortnight later.

And then there is the line itself. Below 120 days of continuous work there is no severance; at 120 days there is a month of it. There is no sliding scale across that boundary and no partial entitlement below it. If you are being let go anywhere near it, the useful thing to know is the exact date your 120th day falls, counted with sections 19 and 20 in hand.

Probation is not a legal category

People assume a probationary period is a legal state with its own rules. In the Act it is not. The second paragraph of section 17, which sets the notice rule for contracts of no fixed period, ends with a sentence that says a probationary contract is also to be regarded as a contract without a fixed period.

So the notice rule applies to probationers exactly as it applies to anyone else, and severance turns on the 120-day count, not on the label. What is true is the arithmetic: probation and the first severance step are measured in the same currency, and 120 days is a little under four months.

The fixed-term escape, and how narrow it is

Section 118 does contain an exception, and it is quoted at people constantly. The first paragraph does not apply to an employee engaged for a definite period who is dismissed at the end of that period. The following paragraph then says what such an engagement may be:

employment in a specific project that is not the ordinary business or trade of the employer, which must have a definite start and finish; or work of an occasional nature with a defined ending or completion; or seasonal work engaged during that season — and in every case the work must be finished within not more than two years, and the employer and the employee must have made a written contract at the beginning of the employment.

Four conditions, all of them cumulative. An annual contract to do the employer’s ordinary work, renewed each January, satisfies none of them except the writing. A contract that says “fixed term” on the front is not what the section is testing.

Retirement, which the two statutes disagree about

The sixth amendment, in 2017, added section 118/1. Its first paragraph provides that retirement, as agreed between employer and employee or as fixed by the employer, shall be deemed a termination under section 118. Its second paragraph deals with the case where no retirement age has been agreed or fixed, or where the age fixed is above sixty: an employee who has reached sixty may then express the intention to retire, which takes effect thirty days after it is expressed, and the employer must pay severance under the first paragraph of section 118.

That is a right to retire and be paid for it, exercisable by the employee, on thirty days’ notice. It is rarely described that way in English.

And then the tax code disagrees. Clause 2(51) of Ministerial Regulation No. 126 (B.E. 2509), issued under the Revenue Code and amended in 1999, exempts severance received under the labour protection law from income tax — but not severance received by reason of retirement or the ending of a contract, and in any case only up to the wages of the last 300 days and not more than 300,000 baht.

The other kinds of compensation

If the workplace moves

Section 120 was completely rewritten in 2019, and the new version is longer and more favourable. An employer intending to move a workplace to a new site — or to another site of its own, wording the amendment added deliberately — must post a notice where employees can plainly see it, continuously, for not less than thirty days before the move, and it must say clearly enough who is being moved, where and when.

If the employer does not post it, an employee who does not wish to work at the new site gets special compensation in lieu of advance notice equal to thirty days of the last wage rate. Separately, any employee who considers that the move significantly affects their ordinary way of life or their family’s, and does not wish to go, must tell the employer in writing within thirty days of the notice being posted — or of the move itself, if no notice was posted. The contract is then treated as ending on the day of the move, and that employee is entitled to special compensation of not less than the section 118 rate. Both sums are payable within seven days of the contract ending.

If the employer disagrees with the employee’s reasons, it must petition the Labour Welfare Committee within thirty days. Section 120/1 gives that committee sixty days to decide and fifteen more to notify, makes its order final, and allows either side thirty days to appeal to the court — with a condition attached to the employer alone: the employer must place security with the court in the amount ordered before it may sue at all.

If a machine takes the job

Sections 121 and 122 cover redundancies caused by improving a unit, a production process, distribution or service through the introduction or change of machinery or technology. Two things are added on top of ordinary severance.

First, the ordinary notice rule in section 17 paragraph two is switched off, and replaced by a duty to notify the labour inspector and the affected employees, with the date, the reason and the names, not less than sixty days in advance. Give less than sixty days’ notice, or none, and the employer owes a further sixty days of the last wage rate as special compensation in lieu of notice, on top of section 118 severance.

Second, section 122: an employee let go under section 121 who has more than six years’ continuous service gets a further fifteen days of the last wage rate for each completed year, capped at 360 days in total under that section.

If the business stops for a while

Section 75, as amended in 2019, deals with a temporary shutdown: where the employer necessarily suspends the business in whole or in part for a significant cause affecting its operation, so that it cannot carry on as normal, and the cause is not force majeure, the employer must pay the employee not less than 75 per cent of the wages of a working day received before the suspension, for the whole period the employee is not put to work — at the place of payment set by section 55, and within the time set by section 70(1).

The exclusion of force majeure is the whole fight in practice, and this page is not going to tell you where the line runs. What the section does settle is that a suspension is not a licence to pay nothing.

Unused annual leave

Section 30 gives an employee with one completed year of service not less than six working days of annual holiday a year, fixed by the employer in advance or by agreement, and the two sides may agree in advance to accumulate and carry unused days forward.

Section 67 then splits the payout in a way worth reading twice. Where the employer terminates and it is not a section 119 case, the employer must pay for the annual holiday of the year of termination, in proportion to what the employee had accrued. And in every case — whether the employee resigns or the employer dismisses, and whether or not the dismissal is under section 119 — the employer must pay for the accumulated annual holiday the employee is entitled to under section 30.

So the carried-forward days survive everything, including a dismissal for cause. This year’s pro-rata days do not survive a resignation, and do not survive a section 119 dismissal.

What unpaid money costs an employer

Section 9 is the reason a small unpaid balance is a bad idea for the company holding it.

Its first paragraph, as replaced in 2019, says that where the employer fails to return a cash guarantee under section 10, fails to pay money in lieu of notice under section 17/1, fails to pay wages, overtime, holiday pay or holiday overtime or the money the Act requires within the section 70 time, fails to pay under section 75, or fails to pay severance under section 118 or the special compensation under sections 120, 120/1, 121 and 122, then the employer pays interest to the employee at 15 per cent per year for the period of default.

Its second paragraph is the sharp one. Where the employer wilfully withholds the money without reasonable cause, then once seven days have passed from the due date the employer must pay the employee a surcharge of 15 per cent of the outstanding amount for every period of seven days.

The route if they will not pay

You do not have to start in court.

Section 123. Where the employer breaches or fails to comply with the Act in relation to a right to receive money, and the employee wants the officials to act, the employee may file a complaint with the labour inspector for the locality where the employee works, or where the employer is domiciled, in the form the Director-General prescribes. If the employee has died, the statutory heirs may file it.

Section 124. The inspector must investigate the facts and issue an order within sixty days of receiving the complaint; where that is not possible, the inspector applies to the Director-General with reasons and may be given up to thirty days more. If the investigation shows the employee is entitled, the inspector orders the employer to pay within thirty days from the date the employer knows or is deemed to know the order. Payment is made at the employee’s workplace unless the employee asks for it at the inspector’s office or another agreed place. If the employee does not come for the money within fifteen days of the order, the inspector deposits it in a bank in the name of the Employee Welfare Fund, and any interest belongs to the employee. If the inspector concludes the employee is not entitled, that decision is issued in writing to both sides.

Section 125. Once the order exists, either side that is unhappy with it has thirty days from knowing of it to take the case to court. If nobody does, the order is final. And there is a condition on one side only:

Section 124/1 adds the carrot. Where the employer complies with the inspector’s order within the time given, or complies with the judgment or order of the court, the criminal proceedings against the employer lapse. Failing to pay severance is an offence under the Act’s penalty chapter, not merely a debt — and paying up makes the offence go away. That is worth saying out loud in a negotiation.

Two situations the Act treats specially

Being handed to a different company

Section 13, replaced in 2019, now reads: where there is a change of employer, or the employer is a juristic person and there is a registered change, transfer or amalgamation with another juristic person, and the effect is that an employee becomes the employee of a new employer, that must have the consent of the employee concerned; the rights the employee had against the former employer continue; and the new employer takes on all rights and duties concerning that employee in every respect.

Before 2019 the transfer happened by operation of law and the argument was only about whether service carried over. Now the consent comes first. Refusing it is not resigning.

Working for a company that is not your employer

Section 11/1 deals with staff supplied to a business by somebody else. Where a business operator assigns a person to procure workers to do work that is part of its own production process or business, and that is not a licensed employment-agency business, then the business operator is deemed to be the employer of those workers — whether or not the intermediary supervises them or pays them. The second paragraph requires the business operator to ensure that subcontracted workers doing work of the same kind as directly employed staff receive fair benefits and welfare without discrimination.

Section 12 adds the chain: where the employer is a subcontractor, every subcontractor up the line, all the way to the head contractor, is jointly liable with the employing subcontractor for wages, overtime, holiday pay, holiday overtime, severance, special compensation, savings contributions, contributions and surcharges — with a right of recourse afterwards against the subcontractor that should have paid.

Social security, and the thirty days that decide it

Unemployment benefit is a separate system with its own paperwork, and its own way of being missed.

The Social Security Office’s published conditions for the unemployment benefit — the version on its site is dated 3 October 2024 — are that the insured person has paid contributions for six months within the fifteen months before becoming unemployed with the last employer, has been unemployed for eight days or more, and has registered as unemployed through the Department of Employment’s online system at e-service.doe.go.th.

The Ministry of Labour’s own English-language Social Security Fund leaflet, whose figures are marked as data of January 2019, sets out the rest: for termination, compensation at 50 per cent of wages for not more than 180 days in a period; for resignation or the end of a contract for a specified period, 30 per cent for not more than 90 days; with a cap of 180 days in a calendar cycle if both kinds of claim arise, and 90 days if the second kind arises more than once. The same leaflet states the rule that catches people:

One more figure from the same leaflet, because it changes what the percentages mean: contributions are calculated on a wage base with a floor of 1,650 baht a month and a ceiling of 15,000 baht a month. The percentages above are percentages of an insured wage, not of a salary. We have not found a primary text that states the resulting benefit ceiling in baht, so we print none.

The leaflet also records a duty on the employer that is useful to know about: where an employee resigns or has been terminated, the employer must notify that the employee is no longer employed by the fifteenth day of the following month. If your own registration is refused because the system still shows you as employed, that is the deadline the office is waiting on.

What actually goes wrong

Accepting a resignation letter. The most consequential five minutes of the whole process is the one in which somebody suggests it would be tidier if you resigned. Resignation moves you from the three-day rule to the ordinary payday, from 50 per cent of the insured wage for 180 days to 30 per cent for 90, and out of section 118 altogether.

Letting the reason stay verbal. The final paragraph of section 119 only helps if there is a document, or the absence of one, to point at. Ask for the termination in writing and keep the envelope it came in.

Counting service from your contract date. Sections 19 and 20 count differently, and usually more generously, than a payroll system does.

Reading a pre-2019 summary. If a page tells you the ladder tops out at 300 days, that notice must be given “one payment period” with no rule about when the money arrives, or that a transfer to a group company happens automatically, it was written before April 2019 and has not been revisited.

Missing the thirty-day social security registration because the severance argument was more interesting. The two clocks run at the same time and only one of them can be restarted.

Waiting for the company’s lawyer to answer. The inspector’s sixty days only start when a complaint is filed, and filing one costs nothing.

Questions people actually ask

How much severance pay am I owed in Thailand?

Section 118 of the Labour Protection Act sets six steps, counted in days of your last wage rate and measured by continuous service: 30 days once you have completed 120 days but not one year; 90 days from one year to under three; 180 days from three to under six; 240 days from six to under ten; 300 days from ten to under twenty; and 400 days at twenty years and above. The last two steps are recent. The 300-day step used to begin at ten years and have no ceiling; the Labour Protection Act (No. 7) B.E. 2562, published in the Royal Gazette on 5 April 2019, split it and added the 400-day step for twenty years and over.

When does a Thai employer have to pay final wages after dismissal?

Within three days. The last paragraph of section 70, as replaced by the 2019 amendment, says that where the employer terminates the employee, the employer shall pay wages, overtime pay, holiday pay, holiday overtime pay and the money the employer has a duty to pay under the Act, to the extent the employee is entitled to it, within three days from the date of termination. The ordinary payday cycle in section 70(1) applies to an employee who resigns; the three-day rule is triggered by the employer ending it. Money in lieu of notice is faster still: section 17/1 says it is paid on the day the employee is put out of work.

Do I get severance pay in Thailand if I was still on probation?

Probation is not a category in the Act. The second paragraph of section 17 ends by saying that a probationary contract is also to be regarded as a contract without a fixed period, which means the ordinary notice rule applies to it. Severance then depends on one number and one number only: section 118(1) starts at 120 days of continuous work. Section 19 requires holidays, leave days, days the employer allowed off for the employee’s benefit and days the employer ordered off for the employer’s benefit to be counted into that period. Section 20 adds that where the employer breaks up the work with intent to deny the employee a right under the Act, every period is counted together.

When can a Thai employer refuse to pay severance?

Section 119 lists six situations: dishonesty in the performance of duties or the intentional commission of a criminal offence against the employer; intentionally causing the employer loss; gross negligence causing serious loss to the employer; violating lawful and fair work rules, regulations or orders after a written warning, except in a serious case where no warning is needed, a written warning being effective for one year from the date of the act; absence from duty for three consecutive working days without reasonable cause, whether or not there is a holiday in between; and imprisonment by a final judgment, which in the case of an offence committed by negligence or a petty offence must be one that caused loss to the employer. The section ends with a sentence that matters more than the list: if the employer does not state the facts constituting the ground in the letter of termination, or does not inform the employee of the ground at the time of the dismissal, the employer may not raise that ground later.

Does a fixed-term contract in Thailand mean no severance?

Only in a narrow case. Section 118 excludes an employee engaged for a definite period who is dismissed at the end of it, but the following paragraph confines that to employment in a specific project that is not the ordinary business or trade of the employer and has a definite beginning and end, or work that is occasional in nature with a defined end, or seasonal work engaged during that season, where the work must be finished within not more than two years and the employer and the employee made a written contract at the beginning of the employment. An ordinary rolling one-year contract for the employer’s ordinary business does not meet that description.

Is severance pay taxable in Thailand?

Partly. Clause 2(51) of Ministerial Regulation No. 126 (B.E. 2509) issued under the Revenue Code exempts severance received under the labour protection law, but only the part not exceeding the wages of the last 300 days and not exceeding 300,000 baht, and it expressly excludes severance received by reason of retirement or the ending of a contract. Two mismatches follow from that. Retirement is treated as a dismissal for severance purposes by section 118/1 of the Labour Protection Act, added in 2017, and is excluded from the exemption by a tax rule amended in 1999. And the exemption was written when 300 days was the top of the ladder; since 2019 the top is 400.

What happens if a Thai employer simply does not pay?

Section 9 provides that where the employer fails to pay within the time set by section 70, or fails to pay severance under section 118 or the special compensation under sections 120, 120/1, 121 and 122, the employer shall pay interest to the employee at 15 per cent per year during the default; and where the employer wilfully withholds the money without reasonable cause, then once seven days have passed from the due date the employer shall pay a surcharge of 15 per cent of the outstanding amount for every period of seven days. The employee’s route is section 123: a complaint to the labour inspector for the place where the employee works or where the employer is domiciled. Section 124 gives the inspector 60 days to investigate and order, extendable by up to 30 more with the Director-General’s permission.

Can I be moved to another company without agreeing?

Not since 2019. Section 13, as replaced by the Labour Protection Act (No. 7) B.E. 2562, says that where there is a change of employer, or where the employer is a juristic person and there is a registered change, transfer or amalgamation with another juristic person, and the effect is that an employee becomes the employee of a new employer, becoming the employee of that new employer requires that employee’s consent; the rights the employee had against the former employer continue, and the new employer must take on all rights and duties concerning that employee. Separately, section 11/1 deems the business operator to be the employer of workers supplied to it to do work forming part of its own production or business, and requires that those workers receive fair benefits and welfare without discrimination compared with directly employed staff doing work of the same kind.

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