Severance Pay in Thailand: How to Calculate It When You Dismiss an Employee (Rate Table)

In short

Under Section 118 of the Labour Protection Act, an employer who dismisses an employee who has worked continuously for 120 days or more must pay severance pay based on length of service, ranging from 30 days to 400 days of the final wage rate. It may be withheld only in the serious-misconduct cases listed in Section 119.

1. Severance pay rates (Section 118)

Based on the employee’s continuous length of service, severance pay must be at least the following number of days of the “final wage rate”:

120 days but less than 1 year → ≥ 30 days
1 year but less than 3 years → ≥ 90 days
3 years but less than 6 years → ≥ 180 days
6 years but less than 10 years → ≥ 240 days
10 years but less than 20 years → ≥ 300 days
20 years or more → ≥ 400 days

(For an employee paid according to work output by unit, the amount is the wages for the corresponding number of days.)

2. What counts as “dismissal”?

Under Section 118, paragraph two, “dismissal” means any act by which the employer does not allow the employee to continue working and does not pay wages — whether the employment contract is terminated or for any other reason — and also covers the case where the employee has no work and no wages because the employer is unable to continue its business. Retirement is treated as dismissal (Section 118/1) and likewise requires severance pay.

3. When the employer need not pay severance (Section 119)

dishonesty in the performance of duties, or intentionally committing a criminal offense against the employer;
intentionally causing damage to the employer;
gross negligence causing serious damage to the employer;
violating the employer’s lawful and fair work regulations or orders after a written warning (no warning is needed where the case is serious; a warning is effective for one year from the date of the offense);
abandoning duties for three consecutive working days without just cause (whether or not there are intervening rest days);
being sentenced to imprisonment by a final judgment.

⚠️ The employer must state the grounds for dismissal at the time of dismissal or in the written notice of termination; otherwise it may not later rely on those grounds to avoid payment.

4. Exception for fixed-term contracts

A fixed-term contract that meets specific conditions (for example, a specific project that is not the employer’s regular business, or occasional or seasonal work, with a definite start and end date, not exceeding 2 years, and a written contract made from the start of employment) is not subject to the severance pay above (Section 118) when it ends on its term.

💡 Beyond severance pay, there may also be “pay in lieu of notice”

If an employer dismisses an employee without giving the legally required advance notice, in addition to severance pay it may also owe “pay in lieu of notice” (special severance pay in lieu of prior notice), calculated separately under Section 17/1 and Section 120.

FAQ

Do I owe severance pay if I dismiss someone during their probation?

An employee who has not worked continuously for 120 days is not covered by Section 118 severance pay; it is only owed once they reach 120 days.

Does an employee who resigns get severance pay?

Severance pay applies to dismissal by the employer (Section 118); an employee who voluntarily resigns is generally not entitled to it.

What is severance pay calculated on?

On the employee’s “final wage rate” multiplied by the number of days set for their length of service (Section 118).

When can an employer withhold severance pay?

In the serious-misconduct cases listed in Section 119: dishonesty or an intentional crime against the employer, intentionally causing damage, gross negligence causing serious damage, violating rules despite a written warning, three consecutive working days of absence without just cause, or imprisonment by a final judgment.