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A major change for worker security in Thailand
From 1 October 2025, Thailand will see a significant social advance with the entry into force of the Employee Welfare Fund (EWF). This mandatory mechanism, although introduced in 1998 in the Labour Protection Act No. 2541, had never been implemented due to the lack of implementing decrees. This situation was rectified in 2024 with the publication of a royal decree and several orders defining the terms and conditions, making the fund effective from the following year.
The objective of this employee welfare fund in Thailand is clear: to provide financial security for certain workers in the event of voluntary departure, dismissal without compensation or death. This system strengthens the coherence of the Thai social protection model and represents a significant legal, financial and organizational challenge for the companies concerned.
Table of Contents
Legal basis of the Employee Welfare Fund in Thailand
A mechanism dating back to the 1998 Labour Protection Act
The Employee Welfare Fund in Thailand has its origins in Chapter 13 of the Labour Protection Act No. 2541 of 1998. This text already provided for a supplementary social security mechanism, jointly financed by employers and employees. However, in the absence of implementing decrees, the details of its implementation remained unclear for a long time.
The entry into force of the Employee Welfare Fund in Thailand decided in 2024
In November 2024, the Thai government revived the project with the adoption of a royal decree setting the date of entry into force at 1 October 2025, two ministerial orders specifying contribution rates and conditions for exemption, and regulations of the fund management committee governing the administrative procedure.
This new social security scheme makes a provision that had previously remained theoretical compulsory, introducing strict obligations for employers.
The employee welfare fund in Thailand aims to fill gaps in existing systems by covering previously marginalised groups such as temporary workers, employees on probation and workers without formal contracts. It encourages the regularisation of labour relations and contributes to better inclusion in social security.
Companies concerned and scope of application of the employee welfare fund in Thailand
The new Employee Welfare Fund in Thailand scheme applies to all companies established in Thailand with at least ten employees. This obligation includes temporary, seasonal and probationary workers. The obligation also applies to foreign companies with a local structure, unless specifically exempted by the Ministry of Labour.
Contributions to the employee welfare fund in Thailand are calculated on the basis of each worker’s monthly salary. The rate is set at 0.25% of salary between 1 October 2025 and 30 September 2030. This rate will increase to 0.5% from 1 October 2030. These amounts must be deducted directly from the worker’s salary (employee’s share) and supplemented by an equivalent share from the employer, for a total monthly payment.
Events giving entitlement to compensation from the employee welfare fund in Thailand
There are three main situations that give entitlement to a payment from the employee welfare fund Thailand. These are voluntary resignation or retirement, dismissal (without compensation, in particular for serious misconduct or in cases excluded from the Compensation Act, and the death of the employee. In the latter case, the beneficiaries may request payment of the compensation.
The payment takes the form of a lump sum, calculated on the basis of the contributions accumulated over a given period, i.e. the employee and employer contributions, plus interest. This amount is fully cumulative with other compensation such as severance pay, voluntary provident funds, social security benefits or private insurance. To qualify, an application must be submitted to the Office of Labour Protection and Welfare, together with the appropriate supporting documents such as the termination certificate, death certificate or a copy of the identity card.
Exemptions from the employee welfare fund in Thailand: an existing solution for certain companies
Companies that already have a voluntary provident fund may apply for exemption from the employee welfare fund in Thailand, provided that the fund covers all employees from the date they start work, applies rates that are equivalent to or higher than those of the fund, and guarantees transparency, governance and financial security.
A voluntary provident fund that defers the application of contributions, for example after six months of service, is not sufficient to justify an exemption. A compensatory measure must be put in place to guarantee immediate protection from the first day of work.
Practical arrangements for implementing the employee welfare fund in Thailand
Procedure to be followed by the employer
The employer must deduct the employee’s share from their pay, add the employer’s share, complete the SorKorLor.3 form with details of the contributions per employee, and make the payment by the 15th of the month following the pay period. Once the payment has been made, an official certificate, the SorKorLor.4, is issued in return. This document is valid in the event of an inspection and must be kept on file.
For example, an employee earning 15,000 THB per month will have 37.5 THB deducted from their pay. The employer will add 37.5 THB. The total payment will therefore be 75 THB per month.
Penalties for non-compliance
Failure to comply with these obligations exposes the employer to a substantial fine of 5% per month of delay, and may even result in administrative fines of up to THB 10,000, or even six months’ imprisonment in the event of repeat offences or gross negligence. Company directors are also liable to personal penalties. Delegating responsibility to a third party does not exempt them in the event of a flagrant error or obvious negligence.
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Essential internal adjustments
Companies must check their current situation, analyse whether they have a pension fund, how many employees are affected, and assess the associated costs. A human resources and payroll audit is often necessary to anticipate the impacts. Payroll software needs to be modified to incorporate the new rates and ensure that supporting documents are retained. Coordination between human resources, finance and IT is essential.
Employees should also be informed about deductions, benefits and how to apply. Educational materials such as guides or human resources FAQs may be useful.
Comparison of the Employee Welfare Fund in Thailand with other social security schemes
The Social Security Fund
The Social Security Fund (FSS) is compulsory for all employees in Thailand and forms the basis of the social protection system. It provides employees with a range of essential benefits, including healthcare, maternity benefits, unemployment benefits, disability benefits and retirement benefits. This fund is financed by a tripartite contribution: the employer, the employee and the State all contribute to the financing of this scheme. Contributions are deducted monthly and paid to the Social Security Fund, which administers the entire system. The SSF provides universal basic protection from which no employee can escape.
The Provident Fund
The Provident Fund (PVD), on the other hand, is a voluntary savings scheme set up by agreement between the employer and its employees. Its main purpose is to build up a financial reserve for retirement. This fund is based on a co-contribution principle, with each party paying a fixed percentage of their monthly salary, usually higher than the SSF rates. The PVD is governed by strict rules on financial management, accessibility and governance. In practice, it is mainly intended for employees on permanent contracts who have reached a certain length of service, often between three and six months. However, the voluntary nature of the PVD means that a large proportion of precarious, temporary or probationary employees are excluded, creating a gap in social security coverage.
Employee welfare fund in Thailand
The employee welfare fund (EWF), or the employee provident fund in Thailand, complements this landscape by positioning itself as a specific intervention tool for employees who do not benefit from the protections offered by the PVD or who do not meet the conditions for receiving statutory redundancy pay. The EWF is mandatory for all companies with at least ten employees, whether permanent or temporary. It is a fund financed by joint contributions from employers and employees, with the rate increasing gradually from 2025 onwards. Unlike the PVD, it covers employees from their first day of work and without any seniority requirements. It is therefore particularly suited to workers in vulnerable situations or at the start of their contracts.
Although the Universal Social Protection Fund provides basic coverage, the Employee Welfare Fund in Thailand offers additional financial security for eligible employees in the long term. The Employee Welfare Fund guarantees immediate minimum compensation for all other employees, particularly those in precarious situations. This compensation, calculated on the basis of accumulated employee and employer contributions plus interest, enables employees to leave their jobs with basic resources, even if they have no other acquired rights.
Unlike the Provident Fund or the Social Protection Fund, the Employee Welfare Fund in Thailand does not offer retirement benefits. It is a transitional or severance payment, not a long-term wealth accumulation scheme. Thus, these three mechanisms do not overlap but complement each other effectively. The Social Protection Fund provides basic protection for all, the Provident Fund enhances the long-term financial security of eligible employees, while the Employee Welfare Fund guarantees immediate minimum coverage for other employees, particularly those in the most precarious situations. Their interaction helps to build a more inclusive and resilient system that can cope with diverse career paths.
Conclusion
The introduction of the Employee Provident Fund in Thailand is a fair social measure. It demonstrates the Thai government’s commitment to improving worker security, particularly for those who are often overlooked by traditional schemes.
For companies, it is both an obligation and an opportunity: to improve their compliance, enhance their human resources policy and avoid severe penalties. The transition requires rigour, anticipation and careful support for teams.
Our expert employment lawyers in Thailand can assist you in auditing your welfare systems, ensuring compliance with the Employee Welfare Fund in Thailand , drafting or adapting employment contracts and payslips, and applying for exemptions and providing regulatory justification.
Only if they are repatriated to Thailand in the year they are received. Otherwise, they remain outside the scope of local taxation.
Yes, provided you are employed by a company recognized by the BOI or a public body. You will need to apply for a simplified work permit.
The visa is valid for 10 years, and can be renewed according to the criteria in force.
Yes, spouses and minor children can benefit from derived rights, subject to conditions.