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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
Thailand Legal basis of the Employee Welfare Fund in Thailand
A mechanism dating back to the 1998 Labour Protection Act
Chapter 13 of the Labour Protection Act No. 2541 of 1998 established the Employee Welfare Fund in Thailand. The Act created a supplementary social security mechanism that employers and employees jointly finance. However, the government did not issue implementing decrees for many years, so the authorities did not clarify the details of its implementation.
The entry into force of the Employee Welfare Fund in Thailand decided in 2024
In November 2024, the Thai government revived the project by adopting a royal decree that sets 1 October 2025 as the entry-into-force date, issuing two ministerial orders that specify contribution rates and exemption conditions, and approving regulations from the fund management committee that govern administrative procedures.
This new social security scheme transforms a previously theoretical provision into a mandatory system and imposes strict obligations on employers.
The employee welfare fund in Thailand seeks to fill gaps in existing systems by covering previously marginalized groups, including temporary workers, employees on probation, and workers without formal contracts. The fund promotes the regularization of labor relations and strengthens inclusion in the social security system.
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 that operate in Thailand and employ at least ten employees. This obligation covers temporary, seasonal, and probationary workers. It also covers foreign companies with a local structure unless the Ministry of Labour grants a specific exemption.
Employers must calculate contributions to the employee welfare fund in Thailand based on each worker’s monthly salary. The contribution rate equals 0.25% of salary from 1 October 2025 to 30 September 2030. The rate will increase to 0.5% starting on 1 October 2030. Employers must deduct the employee’s share directly from the worker’s salary and add an equal contribution from the employer, which together form the total monthly payment.
Events giving entitlement to compensation from the employee welfare fund in Thailand
Three main situations give an employee entitlement to payment from the Employee Welfare Fund in Thailand: voluntary resignation or retirement, dismissal without compensation (particularly in cases of serious misconduct or situations excluded from the Compensation Act), and the employee’s death. In the event of death, the beneficiaries may request payment of the compensation.
The fund pays a lump sum calculated on the total contributions accumulated over a specific period, including both employee and employer contributions, plus interest. The employee may receive this amount in addition to other compensation, such as severance pay, voluntary provident funds, social security benefits, or private insurance.
To receive payment, the applicant must submit a request to the Office of Labour Protection and Welfare and provide the required supporting documents, such as a termination certificate, death certificate, or copy of an identity card.
Exemptions from the employee welfare fund in Thailand: an existing solution for certain companies
Companies that already operate a voluntary provident fund may request an exemption from the Employee Welfare Fund in Thailand if their fund covers all employees from their first day of work, applies contribution rates that equal or exceed those required under the Employee Welfare Fund, and ensures transparency, proper governance, and financial security.
A voluntary provident fund that delays contributions, for example, by starting them only after six months of service, does not qualify for exemption. The company must implement a compensatory measure that guarantees immediate protection from the first day of employment.
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 the employee’s salary, add the employer’s share, complete the SorKorLor.3 form with detailed contributions for each employee, and submit the payment by the 15th day of the month following the pay period. After the employer completes the payment, the authorities issue the official SorKorLor.4 certificate. The employer must keep this document on file and present it during any inspection.
For example, if an employee earns 15,000 THB per month, the employer must deduct 37.5 THB from the employee’s salary and contribute an additional 37.5 THB. The employer must then submit a total monthly payment of 75 THB.
Penalties for non-compliance
If an employer fails to comply with these obligations, authorities may impose a surcharge of 5% per month of delay and administrative fines of up to THB 10,000. In cases of repeat offenses or gross negligence, courts may impose up to six months’ imprisonment.
Company directors also bear personal liability for these violations. Even if they delegate responsibility to a third party, they remain liable in cases of clear error or obvious negligence.
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Essential internal adjustments
Companies must review their current situation, determine whether they operate a pension fund, identify how many employees the scheme affects, and evaluate the associated costs. They often need to conduct a human resources and payroll audit to anticipate the impact. They must update payroll software to integrate the new contribution rates and ensure that they retain supporting documents. Human resources, finance, and IT teams must coordinate closely.
Companies should also inform employees about salary deductions, available benefits, and the application process. They may provide educational materials, such as guides or human resources FAQs, to support clear communication.
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), by contrast, operates as a voluntary savings scheme that employers establish through an agreement with their employees. The scheme aims primarily to build a financial reserve for retirement. It follows a co-contribution model in which both the employer and the employee contribute a fixed percentage of the employee’s monthly salary, usually at rates higher than those of the Social Security Fund (SSF). The law subjects the PVD to strict rules on financial management, accessibility, and governance.
In practice, employers generally limit participation to employees on permanent contracts who have completed a minimum length of service, often between three and six months. Because participation remains voluntary, many employers exclude precarious, temporary, or probationary employees, which creates a gap in social security coverage.
Employee welfare fund in Thailand
The employee welfare fund (EWF), also known as the employee provident fund in Thailand, complements this framework by serving as a targeted protection mechanism for employees who do not benefit from the Provident Fund (PVD) or who do not qualify for statutory redundancy pay. The law requires all companies with at least ten employees, whether permanent or temporary, to participate in the EWF. Employers and employees jointly finance the fund, and the contribution rate will gradually increase starting in 2025. Unlike the PVD, the EWF covers employees from their first day of work and does not impose any seniority requirement. This structure makes the fund particularly suitable for workers in vulnerable situations or at the beginning of their contracts.
Although the Universal Social Protection Fund provides basic coverage, the Employee Welfare Fund in Thailand strengthens long-term financial security for eligible employees. The fund guarantees immediate minimum compensation for other employees, especially those in precarious situations. The authorities calculate this compensation based on accumulated employee and employer contributions plus interest, which allows employees to leave their jobs with basic financial resources even if they hold no other acquired rights.
The Employee Welfare Fund in Thailand does not provide retirement benefits, unlike the Provident Fund or the Social Protection Fund. It functions as a transitional or severance payment rather than a long-term wealth accumulation scheme. These three mechanisms therefore operate in a complementary manner rather than overlapping. The Social Protection Fund delivers basic protection for all workers, the Provident Fund strengthens long-term financial security for eligible employees, and the Employee Welfare Fund ensures immediate minimum coverage for other employees, particularly those in precarious situations. Together, they create a more inclusive and resilient system that accommodates 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.
If you need further information, you may schedule an appointment with one of our lawyers.
FAQ
The Employee Welfare Fund (EWF) is a mandatory savings and protection mechanism established under the Labour Protection Act B.E. 2541.
It provides financial compensation to employees in cases of:
Voluntary resignation or retirement
Dismissal without statutory severance
Death
The system becomes fully effective on 1 October 2025, following the 2024 royal decree that activated its implementation.
All companies operating in Thailand that employ 10 or more employees must comply.
The obligation covers:
Permanent employees
Temporary and seasonal workers
Probationary employees
Employees without formal written contracts
Foreign companies with a registered presence in Thailand are also subject to the scheme unless a specific exemption is granted by the Ministry of Labour.
Contributions are calculated as a percentage of the employee’s monthly salary:
0.25% (employee) + 0.25% (employer) from 1 October 2025 to 30 September 2030
0.5% (employee) + 0.5% (employer) starting 1 October 2030
For example, for a monthly salary of 15,000 THB:
Employee contributes 37.5 THB
Employer contributes 37.5 THB
Total monthly payment: 75 THB
Employers must deduct the employee’s share directly from payroll and remit the total contribution monthly.
Employees (or beneficiaries in case of death) may claim payment in three main situations:
Voluntary resignation or retirement
Dismissal without compensation
Death
The benefit is paid as a lump sum, consisting of total accumulated contributions (employer + employee) plus interest.
The claim must be filed with the Office of Labour Protection and Welfare, along with supporting documents.
Yes, companies may apply for exemption if they operate a compliant Provident Fund (PVD).
To qualify for exemption, the Provident Fund must:
Cover all employees from their first day of employment
Apply contribution rates equal to or higher than those required under the EWF
Meet governance and financial transparency standards
If a Provident Fund delays participation (e.g., after 6 months of service), it does not qualify unless compensatory measures are implemented.
Employers who fail to comply may face:
A 5% monthly surcharge on unpaid contributions
Administrative fines of up to THB 10,000
Up to 6 months’ imprisonment in serious cases
Company directors may also be held personally liable in cases of negligence.
The EWF complements existing systems such as:
Social Security Office (which administers Thailand’s compulsory social security system covering healthcare, unemployment, disability and pensions)
The voluntary Provident Fund (PVD), which focuses mainly on retirement savings for eligible employees