Thailand is the second biggest economy in Southeast Asia. And it’s a popular outsourcing location due to its average salary, which is lower than in countries like the USA and Singapore.
The average annual salary in Thailand is 1,160,000 THB (Thai Baht) or 34,342 US Dollars, according to the exchange rates in August 2021. But the country’s average salary varies, depending on several factors.
In this article, we’ll talk about the average salary in Thailand and help you learn more about the advantages of outsourcing to the country, and take a look at its outsourcing laws.
Table of Contents
- What is the average salary in Thailand?
- How does the average salary in Thailand vary?
- Is Thailand a good outsourcing destination?
- 3 advantages of outsourcing to Thailand
- Legal provisions regarding outsourcing to Thailand
Let’s dive in.
What is the average salary in Thailand?
According to Salary Explorer, Thailand has a salary range of 24,500 THB (725 USD) to 433,000 THB (12,819 USD) in a month. And its average monthly salary is 96,900 THB (2,869 USD).
The country has a median salary of 88,600 THB per month, implying that 50% of the Thai population earns more than 88,600 THB, while the other 50% earns below 88,600 THB.
Additionally, the daily minimum wage in the country ranges between 328 Baht (9.71 USD) to 354 Baht (10.48 USD).
How is wage different from salary?
The average monthly salary includes monetary compensation, housing and transportation payment, paid leaves, insurance, etc. Whereas the average wage is just the monetary compensation that the employee receives.
Additionally, the wage is a variable compensation that depends on the number of days or hours the employee worked and their hourly rate. But a salary is a fixed compensation that doesn’t change with the hours worked.
And the average salary varies depending on factors like qualification and the city of the employee.
How does the average salary in Thailand vary?
Let’s look at the factors that influence the average Thai salaries:
Usually, the average Thai salary of an employee increases with their experience.
An employee with two to five years of experience earns about 32% more than their base salary. Likewise, employees with experience of more than five years get paid 36% more than those with less than five years of experience.
Once an employee hits a 10-year mark, they may get a 21% higher salary than before, and those who have more than 15 years of experience may get an additional 14%.
Just like in other countries, the average income varies across different job titles.
Healthcare professionals are the highest-paid professionals in Thailand. A doctor or physician generally earns 228,000 THB/month (6,750 USD) on average.
A Thai person working in Executive and Managerial positions earns an average salary of 131,000 THB per month. And legal representatives get an average salary of 117,000 THB per month.
Here’s a table with other popular professions:
|Business Development Manager||155,000 THB|
|Human Resources Manager||152,000 THB|
|Developer / Programmer||96,600 THB|
|ESL Teacher||85,100 THB|
|Real Estate||70,512 THB|
Source: salaryexplorer.com, averagesalarysurvey.com
Generally, in some fields, an expat receives a higher salary than a native.
For example, a non-native teacher is paid more than a native English teacher.
Further, a qualified teacher with a TEFL certificate will earn more than a teacher with only a language degree. And a teacher in a public school usually receives a better salary than someone working in a private school. However, international schools pay their foreign teachers more than public schools.
Note: Employees with the same designation usually receive 7% more when working for the Thai government than in the private sector.
Like in most other countries, educated employees in Thailand get paid more.
Let’s look at how the average salary varies for employees with the same work experience but different qualifications:
- A worker with a certificate or diploma earns 17% more than their high school counterparts in Thailand.
- An employee with a Bachelor’s degree receives 24% more salary than those with a Diploma degree.
- A Master’s degree holder is paid 29% more than a Bachelor’s degree holder.
- An employee who has completed a Ph.D. earns a 23% higher salary than a Master’s degree holder.
The average salary in Thailand varies from one city to another due to different levels of industrialization across the country. Cities in developed regions that have more businesses pay high salaries.
Here’s a table of few Thai cities and their average salaries:
|City||Average Monthly Income|
|Chiang Mai||107,000 THB|
Source: salaryexplorer.com, payscale.com
5. Increment, bonuses, and incentives
Employees in Thailand are likely to get an increment of 8% every 17 months on an average — which is high compared to the world average of 3% every 16 months.
Here’s a table showing the increment rate by industry:
Here’s a table showing the average salary increase rate by experience:
|Experience Level||Average Annual Increment|
|Junior Level||3% – 5%|
|Senior Level||10% – 15%|
|Top Management||15% – 20%|
A Salary Explorer survey found that 56% of respondents received a bonus of 2% to 7% of their annual salary.
Note: These figures may vary drastically as they’re averages across industries, cities. Specific job titles may also influence salaries.
Is Thailand a good outsourcing destination?
Thailand’s economy grew at an astonishing rate of 7.5% from 1960-1965 and 5% from 1999-2005. During this period, the country saw a decrease in unemployment and poverty levels and maintained it until the pandemic.
However, recently, their growth rate decreased from 4.2% in 2018 to 2.4% in 2019.
Additionally, the country had negative economic growth of 6.1% in 2020 due to a decline in external trade and tourism, supply chain disruptions, and weakening domestic consumption.
Despite these setbacks, Thailand has a GDP of 501.795 billion USD in 2020.
This means that even though the country is going through a tough time now, it’s still a great outsourcing destination because of its economic stability.
Moreover, outsourcing to Thailand offers businesses several advantages.
3 advantages of outsourcing to Thailand
Let’s look at some of the advantages of outsourcing to Thailand:
1. Low-cost operations
The hourly minimum wage of Thailand (1.26 USD) is way lower than that of the USA, which is around 7.25 USD.
It’s much lower than other Asian countries like Hong Kong (4.82 USD)and China (3.71 USD in Beijing).
Also, the cost of infrastructure and office amenities is low in the country. This way, companies can easily set up their offices to start their business.
Apart from low operation costs, outsourcing companies can also receive tax benefits from the Thai government.
- Exemption or reduction of import duties for imported machinery.
- Companies that fulfill certain criteria can get a 10 billion THB subsidy under the Competitiveness Enhancement Fund.
- Qualified expatriates and Thai employees can get a 17% Personal Income Tax rate on their income if they work for companies in ECC (Eastern Economic Corridor).
2. Skilled employees
Thailand has a skilled labor force known for its artistic talent. They supply several handmade products like garments, jewelry, handicraft, ceramics, pottery, etc.
Additionally, the literacy rate of Thailand was around 93.8% in 2019 -— way higher than that of the world (87%).
Also, the present population of Thailand is better educated than Malaysia, Indonesia, and Cambodia.
According to Coursera’s Global Skill Index, Thailand ranked 38th, while Malaysia and Indonesia were listed 43rd and 56th, respectively. And the Global Talent Competitive Index 2020 ranked Thailand 67th and Cambodia 117th in the world.
This means that the country has a strong literate labor force to propel your business forward.
3. High adaptability
The country is a popular tourist destination and had around 6.7 million international visitors in 2020. Moreover, Thailand also has about 11,200 expats teaching English.
This is because Thai people are open-minded and welcoming to other cultures. This character enables outsourcing companies to establish themselves in the country quickly.
Western food in Thailand might taste more authentic than in other Southeast Asian countries. Your foreign staff can take advantage of this and make themselves feel more at home.
Additionally, with a high understanding of western culture, customer service representatives in the country may know how to handle your western customers better.
Legal provisions regarding outsourcing to Thailand
The outsourcing laws in Thailand support outsourcing companies to establish and run their businesses in the country. Let’s look at a few prominent regulations:
1. Employment contract
Under the Civil and Commercial Code and the Labour Protection Act (LPA), employment contracts in Thailand can be written or verbal. However, specific industries like Maritime are legally required to use written employment contracts to record certain details.
Also, most companies prefer a written employment contract that specifies all terms and conditions to avoid misunderstandings in the future.
There are two types of employment contracts:
- Fixed period employment: States the fixed time period of employment. Usually used when hiring for a project.
- Ongoing employment: All employment other than the fixed period employment.
Employers need not necessarily pay employees bonuses. However, many give a bonus in the 13th month, based on employee performance.
3. Employment termination
Employee termination depends on the type of employment contract.
A fixed-term employee is automatically terminated when the contract ends. The employer won’t have to pay such employees any severance pay.
Whereas, a permanent employee (an employee with an ongoing contract) must be notified of the termination on or before the pay date. They’re entitled to get a termination notice of a month and severance pay.
However, permanent employees who are terminated due to misconduct, negligence, violation of rules, etc., need not get severance pay or termination notice.
4. Working hours
Legally, employees have to work for 8 hours per day and 48 hours per week.
But those who work in dangerous fields or perform tasks that might affect health shouldn’t work for more than 7 hours a day and 42 hours a week.
Employees are permitted to work for a maximum of 36 hours overtime in a week.
5. Sick leave
Employees usually receive 30 days of paid sick leave annually in Thailand. Those who take more than three sick leaves are entitled to submit a medical certificate to prove their illness.
In addition to sick leave, female employees get maternity leave for 90 to 98 days (including weekends). The salary they receive will be paid by their employer and from the social security fund equally.
Apart from these regulations, you must also know what the country prohibits an outsourcing company from doing.
The FBA (Foreign Business License) prohibits an expatriate from :
- Processing forestry and timber from a natural forest.
- Extracting Thai medical herbs.
- Growing paddy, plantations, or other crops.
- Farming livestock.
Thailand is a leading destination for expanding businesses, small and big.
Its low operating cost, highly skilled talent pool and welcoming culture can make outsourcing to the country smooth and successful.
But before venturing into this economy, you need to learn all about running a business in Thailand. Use the average salary information in this article to make better decisions for your business.