Thailand Severance Pay Calculator 2026

Severance pay (ค่าชดเชย) is a payment Thai law requires employers to make when they terminate an employee without a legally recognized cause. The obligation comes from Section 118 of the Labour Protection Act B.E. 2541 (1998), Thailand's core employment statute. Unlike a discretionary "redundancy package" in some countries, Thai severance is a fixed statutory entitlement: if you have worked at least 120 days and your employer ends the employment, the amounts in the table below are the legal minimum — no employment contract or company policy can reduce them.

The amount scales with tenure, from 30 days' wages after 120 days of service up to 400 days' wages (about 13.3 months) after 20 years. It applies to every employer in Thailand regardless of company size, and it protects Thai nationals and foreign employees equally — nationality and work-permit status do not change the calculation.

Severance is also only part of what a terminated employee is owed. In most no-fault terminations you should receive four separate amounts: outstanding wages up to the last day, statutory severance, payment in lieu of advance notice (if the employer ends the contract immediately), and compensation for unused annual leave. This Thailand severance pay calculator adds all of them together and estimates how much of the severance is tax-free.

Section 118 of the Labour Protection Act sets severance in days of wages at your last wage rate. For a monthly-paid employee, 30 days' wages is effectively one month of salary:

The 400-day top tier was added by the Labour Protection Act (No. 7) B.E. 2562 (2019), effective 5 May 2019. Before that amendment, the maximum was 300 days for employees with 10 or more years of service.

Two details matter for the calculation. First, the "last rate of wages" includes base salary plus fixed, regular allowances paid as part of wages (such as a guaranteed cost-of-living or position allowance) — but excludes overtime pay, bonuses, commissions that vary with output, and one-off payments. Second, service must be continuous: probation periods count toward the 120-day threshold and total tenure, and Thai courts have treated back-to-back short contracts as continuous employment when the work is ongoing.

You generally qualify if all of the following are true:

• You have worked for the employer continuously for at least 120 days (probation counts).
• The employer ended the employment — including redundancy, restructuring, business closure, or simply not renewing an ordinary fixed-term contract. Under Section 118, "termination" covers any case where the employer stops employing and paying you, including when a normal fixed-term contract expires.
• The termination was not for one of the serious-misconduct causes in Section 119 (below).

You do not qualify if:

• You resign voluntarily. Resignation ends the right to severance entirely — though you keep your outstanding wages and accrued unused annual leave. This is why some employers push a "voluntary resignation letter" or a mutual separation agreement during layoffs; do not sign one without comparing the offer to your statutory entitlement.
• You worked fewer than 120 days.
• Your contract falls under the narrow fixed-term exception (Section 118, final paragraphs): a written fixed-term contract of no more than 2 years for a specific project, occasional work, or seasonal work outside the employer's normal business, agreed in writing at the start. Ordinary office jobs on renewable annual contracts do not fit this exception — when such a contract simply ends, severance is still owed.
• You were dismissed for a Section 119 cause (see the next section).

Section 119: When an Employer Owes No Severance

Under Section 119 of the Labour Protection Act, an employer may terminate without severance only if the employee:

1. Performed duties dishonestly or intentionally committed a criminal offense against the employer — e.g., embezzlement, forging documents, theft.
2. Intentionally caused damage to the employer — deliberate harm to property, reputation, or business.
3. Committed gross negligence causing serious damage — not ordinary mistakes, but severe carelessness with significant consequences.
4. Violated lawful work rules or orders after a written warning — the warning is valid for 1 year from the offense; a serious violation needs no prior warning.
5. Abandoned work for 3 consecutive working days without reasonable cause — whether or not a holiday falls in between.
6. Was sentenced to imprisonment by a final court judgment — for negligence or petty offenses, only if the offense caused damage to the employer.

Crucially, the employer must state the cause in the termination letter and prove it. If the stated ground is not proven — or was not cited at the time of dismissal — severance is payable in full. In practice, Thai Labour Courts interpret Section 119 narrowly, in the employee's favor.

These two payments are often confused, but they are separate legal entitlements and you can receive both:

How notice works: for an open-ended contract, either side must give written notice on or before a wage payment date, taking effect on the following wage payment date (Section 17). If the employer wants you out immediately, Section 17/1 lets them pay wages for that notice period instead — this is the "advance notice pay" line in the calculator, which uses the common one-month approximation. Check your own contract too: if it promises a longer notice period, the contractual period applies.

Total termination compensation consists of three main components (on top of your final salary payment):

Remember that the wage base is your last rate of wages including fixed regular allowances, and that severance must be paid on the termination date itself — not with the next payroll run.

This is the part most guides skip — and it can be worth six figures in baht. Thai tax law treats each component of a termination package differently:

The exemption in detail. Under Clause 2(51) of Ministerial Regulation No. 126, as amended by Ministerial Regulation No. 394 (B.E. 2567 / 2024), severance received under the Labour Protection Act due to involuntary termination is exempt from personal income tax up to the lesser of (a) your wages for the last 400 days of employment, or (b) ฿600,000. The new limits apply retroactively to income received from 1 January 2023 — the previous rule (which you will still see quoted on many law-firm pages) was 300 days' wages capped at ฿300,000. If you were terminated in 2023 and taxed under the old limits, you may be entitled to a refund.

The 5-year separate-taxation election. If you worked for the employer at least 5 years, Section 48(5) of the Revenue Code lets you tax the remaining (non-exempt) one-time termination payment separately from your other income on the attachment to your PND.90/91 return, instead of stacking it on top of your salary. The separate computation deducts ฿7,000 per year of service, then 50% of the remainder, and applies the progressive rate schedule to what is left. For long-serving employees this routinely cuts the tax on severance by more than half. (Note: in the separate computation the usual 0% band for the first ฿150,000 of income generally does not apply — confirm the exact figures with a Thai tax adviser or the Revenue Department's PND.91 guide.) Use our Thailand income tax calculator to see how any taxable portion interacts with your regular salary for the year.

Your employer withholds tax on the taxable portion when paying you. Keep the termination letter and the withholding certificate (50 ทวิ) — you will need both at filing time, and the termination letter is also your evidence that the payment qualifies as involuntary severance for the exemption.

• You have identical rights. The Labour Protection Act protects employees in Thailand regardless of nationality. If you hold a work permit and are terminated without a Section 119 cause, the Section 118 tiers apply to you in full, and severance waivers in employment contracts are unenforceable.
• Watch the visa clock. Your work permit and the extension of stay based on employment generally end when the employment ends — often leaving only a very short window to leave Thailand or switch to another visa. Negotiate the termination date, garden leave, or an agreed "last working day" with your visa situation in mind, and get the timeline in writing before your final day.
• Payment is in Thai baht. Severance is paid in THB, usually to your Thai bank account, and is due on the termination date. If you plan to remit it abroad, keep the termination letter and bank records — banks may ask for the source of funds, and your Thai tax residency (180+ days in the calendar year) determines how the year's income is taxed.
• Unemployment benefit exists — but is hard to use. If you contributed to Thai social security (Section 33) for at least 6 of the last 15 months, a laid-off worker is entitled to unemployment benefit of 60% of the average wage (raised from 50% by ministerial regulation effective 28 June 2025; on the SSO wage base, capped at ฿17,500/month from January 2026 — so up to roughly ฿10,500/month) for up to 180 days; voluntary resignation pays 30% for up to 90 days. In practice foreigners often cannot complete the claim once their visa lapses, so check with the SSO immediately after termination.
• Do not sign a resignation letter to "speed things up." A resignation — or a carelessly worded mutual separation agreement — can convert a with-severance termination into a no-severance exit. Compare any package offered against this calculator's statutory figures first; anything below the Section 118 amount is below your legal minimum.
• Provident fund is separate. Any provident fund balance (your contributions, employer contributions, and returns per the fund rules) is paid out on top of statutory severance, with its own tax treatment.

Severance is due on the termination date. If it is not paid, you have free, well-trodden remedies:

1. Demand it in writing.

   Send a formal written request stating the amounts owed and keep a copy. Many disputes end here — the interest and surcharges below give employers a strong incentive to settle.

2. File a complaint with the Labour Inspection Officer.

   Free of charge at the Labour Protection and Welfare Office covering your workplace. The officer investigates and must issue an order within 60 days; non-compliance by the employer is a criminal offense.

3. Or sue in the Labour Court directly.

   Labour cases carry no court fees, proceedings are designed for unrepresented employees, and you can claim severance, notice pay, unused leave, and — where the dismissal was unfair — additional damages.

Unpaid severance accrues interest at 15% per year (Section 9), and if the employer withholds it deliberately without reasonable grounds for more than 7 days, an additional 15% surcharge accrues every 7 days. Severance claims are subject to a 10-year limitation period (ordinary wage claims: 2 years) — but act quickly while evidence and witnesses are fresh. Keep your employment contract, pay slips, termination letter, and any chat or email records about the dismissal.

• Workplace relocation (Section 120) — If the employer relocates and the move significantly affects your ordinary way of living, you may refuse to move and terminate the contract within 30 days, receiving special severance at no less than the Section 118 rates. If the employer failed to announce the relocation at least 30 days in advance, an extra 30 days' wages is due in lieu of that notice.
• Restructuring due to technology (Section 121-122) — Layoffs caused by machinery or technology replacing workers require 60 days' notice (or 60 days' wages in lieu), and employees with over 6 years of service receive additional special severance of at least 15 days' wages per year of service, capped at 360 days' wages.
• Suspension of business (Section 75) — If the employer temporarily suspends operations for reasons other than force majeure, it must pay at least 75% of wages during the suspension. This is not termination, so severance is not (yet) triggered.
• Unfair dismissal damages — Separate from severance, the Labour Court can award additional compensation if a dismissal was made without just cause under the Establishment of Labour Courts Act. Severance is the floor, not the ceiling.