Complete Guide to Employee Termination Costs in Thailand (2025)

Severance pay under Section 118 of the Act is based on continuous service: 120 days to 1 year = 30 days' wages, 1-3 years = 90 days, 3-6 years = 180 days, 6-10 years = 240 days, 10-20 years = 300 days, 20+ years = 400 days. Wages include base salary and all regular payments but exclude overtime and bonuses. No severance is payable for dismissal with cause (serious misconduct under Section 119).

For relocation of the workplace, the employer must give 30 days' advance notice, and employees who do not wish to relocate are entitled to the statutory severance plus an additional 'special severance' of 50% of their statutory entitlement.

The Act requires advance notice of at least one payroll cycle (typically one month). If no notice is given, the employer must pay wages in lieu. On termination, employers must pay accrued annual leave (minimum 6 days/year), any contractual bonus obligations, and outstanding wages within 3 days.

Thai employers commonly offer health insurance continuation (THB 3,000-10,000/month for 3-6 months), outplacement services (THB 30,000-100,000), reference letters, and training allowances (THB 20,000-50,000). Extended provident fund benefits and equipment retention are also offered.

For a Thai employee with 8 years of service earning THB 50,000/month: statutory severance = 240 days = 8 months = THB 400,000. Adding 1 month's notice pay (THB 50,000), accrued leave, and supplementary benefits, total costs can reach THB 480,000-520,000.

Thailand's severance costs are the highest in ASEAN for long-tenured employees. The Msure Layoff Calculator helps model these costs accurately using the statutory scales.