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Post by Deleted on Nov 13, 2015 4:05:58 GMT 7
I have two Thai employees, one effectively full time, the other piecemeal. I pay the part-timer direct from my UK personal bank account. That expense is written off against one of my income streams, the one we don't discuss.
The other works for my company and is paid direct from the company bank account, ( she assists with our Internet marketing ). We get a monthly invoice from her and generate the payment. It makes it nice and simple for my company.
The current employee is paid well over that 150,000 baht limit. Accepting that I'm right about the 150,000 figure, what are the tax implications for my current employee? Pay band 200 - 250,000 p.a. We also pay 36,000 baht a year towards housing costs.
My company values the work done, and we would be minded to increase payment to take into account any tax liability.
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Post by Deleted on Nov 13, 2015 4:11:07 GMT 7
On a side note, said employee is superb. She generates around 4,000 fleeting ads per month and provides us with an outstanding return. Right now she wakes six mornings a week at 4.00 a.m. to ensure that one of our three daily advert sets is shown at peak Internet traffic time in the UK.
I hear people moan about Thai employees - we have a gem, a truly outstanding individual.
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Post by Fletchsmile on Nov 27, 2015 14:38:33 GMT 7
I have two Thai employees, one effectively full time, the other piecemeal. I pay the part-timer direct from my UK personal bank account. That expense is written off against one of my income streams, the one we don't discuss. The other works for my company and is paid direct from the company bank account, ( she assists with our Internet marketing ). We get a monthly invoice from her and generate the payment. It makes it nice and simple for my company. The current employee is paid well over that 150,000 baht limit. Accepting that I'm right about the 150,000 figure, what are the tax implications for my current employee? Pay band 200 - 250,000 p.a. We also pay 36,000 baht a year towards housing costs. My company values the work done, and we would be minded to increase payment to take into account any tax liability. Blether, I wasn't quite clear on this. You say that she's an employee, but then say that she invoices you? Employees don't normally invoice an employer for work. I know in your mind you will say they work for you so you consider them employees, but technically for the one that invoices you, if she doesn't have an employment contract with, you are you're not deducting tax/ national insurance etc, and then filing monthly tax schedules about what you paid to employees then she's more of a contractor/ someone you outsource to. Especially if she's paying the tax herself. Who pays the tax from her salary? Does she declare it herself or does your company do? So that's the first thing to consider, is she actually employee status or not? This is key and important for many reasons: Then, she may prefer just getting paid by you and looking after her own tax affairs. Obvious reasons then as she controls what she does/ doesn't declare  So if you change the arrangement she might not like the idea. If she becomes a true employee though, and you're deducting tax and NI, on 200 - 250k a year she wouldn't pay much tax anyway. The 36k is a taxable benefit too. However, she would have allowances (would likely be at least 90k = 60k general deducvtion + 30k single allowance, possibly more if she has older parents, kids etc) plus there's a 150k nil rate band on top. So she wouldn't pay much anyway as there's a good chance at least 240k of her money would be covered. On the other hand if she earns money elsewhere then it's a different story, as this is then extra income on top and her allowances may already be used elsewhere So she might resist or not like you to bring her into a more shall we say formal system The Thai Revenue website gives a quick idea of this www.rd.go.th/publish/6045.0.html |
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Post by Fletchsmile on Nov 27, 2015 14:46:45 GMT 7
A key benefit of her being an employee though could be bringing her into the formal NI system. Similar in some ways to the UK (although obviously not as generous), this gets her access to things like maternity cover, lump sum if child-birth (around 12k or so when we got it), state pension, monthly income for kids (ball park 300 baht or so each). So gives an extra level of protection. NI in Thailand is at 5% up to a max of THB 750. i.e the salary is capped at THb 15,000 for NI considerations (as well as benefit payments out). Personally I think 750 baht is a small amount to pay for some of the benefits that come with it. Although I've seen/ heard many lower level Thai employees in non-formal sectors resist being brought into formal arrangements and can't get their head round the benefits, only they get less. They become suspicious. I remember a friend with his own business having a few issues implementing this type of thing, even though to you him and I it obviously makes sense. To answer your question, NI is an example of a cost you could pick up at say an extra 750 baht a month for her to be covered by NI to get he formally into the welfare system. That's assuming she isn't paying it already, either thru another job or your arrangements |
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Post by Fletchsmile on Nov 27, 2015 14:52:17 GMT 7
If she is paying tax via you or another job as well, another consideration might be pensions. Again depending on the person, this might take some explaining to get them to understand the benefits. I've encountered resistance on this in the past though, just because people don't understand it. Sometimes if the person doesn't understand all these things well, they are happier left alone. So just be careful in changing things and trying to do more for them, as you're obviously doing, sometimes they read it the wrong way, and you end up losing the person, even though your intentions were good, and they would have been better off. Sometimes they just like it simple |
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So if you change the arrangement she might not like the idea.
