Severance and final settlement in Thailand
What falls due when employment ends — and, just as important, on which day each part falls due. Severance, payment in lieu of notice, unused leave and outstanding wages do not share a deadline.
Build the settlement
Enter how the employment ended and the dates around it. Every applicable line is shown, including the ones that come to nothing.
The ordinary case. Severance under section 118 and written notice under section 17 both apply.
Service runs from the first day worked, including any probation period.
The day the employee actually leaves.
Leave blank if no notice was given. Ignored where notice does not apply.
Your actual payroll date. It determines when notice takes effect.
The last wage rate. Severance is measured on it, with no averaging or look-back.
This changes the arithmetic. A monthly wage has to be converted to a daily rate; a daily wage does not.
Enter the days yourself — the statute says leave is paid out but prescribes no formula for pro-rating the current year.
Days worked in the final period that have not yet been paid.
The deadlines are not the same. Payment in lieu of notice is due on the day the employee is put out of work, and the Department's published position is that severance is due on the termination date. Wages and other money owed under the Act are due within three days. A single consolidated payment run on day three already misses the first two.
Paying every statutory amount correctly does not close the matter. An unfair-dismissal claim under section 49 of the Labour Court Act is decided on the court's own criteria and survives full payment; the court may order reinstatement or fix damages with no formula and no cap. Separate statutory bars apply whatever the length of service, including section 43 on pregnancy and the Labour Relations Act protections for employee-committee members.
What a final settlement is made of
| Component | Due |
|---|---|
| Payment in lieu of notice — section 17/1 | The day the employee leaves |
| Severance — section 118 | The termination date |
| Special severance — sections 120 to 122 | Within 7 days, relocation cases |
| Outstanding wages, overtime and holiday pay — section 70 | Within 3 days |
| Untaken annual leave — section 67 | Within 3 days |
Late payment attracts interest at 15 per cent a year under section 9. Where the withholding is both wilful and without reasonable cause, a further 15 per cent of the outstanding amount accrues for every seven-day period. Section 9 also provides a deposit mechanism that stops both running where the employer is ready to pay but the employee cannot be paid.
Outstanding overtime and holiday pay sit inside that three-day basket. What they come to depends on how the employee is paid and which holiday was worked.
Work out overtime owedSeverance bands — section 118
| Completed continuous service | Severance |
|---|---|
| Less than 120 days | None |
| 120 days to under 1 year | 30 days |
| 1 year to under 3 years | 90 days |
| 3 years to under 6 years | 180 days |
| 6 years to under 10 years | 240 days |
| 10 years to under 20 years | 300 days |
| 20 years or more | 400 days |
Days of the last wage rate. Each threshold is a completed-service test against the hire anniversary, and each figure is a floor rather than a ceiling. The 400-day band was added by Act No. 7 B.E. 2562 with no grandfathering, so it applies to any termination after it came into force.
When severance is not payable
Section 119 lists six grounds, and only these six, on which an employer may terminate without severance and without advance notice. Poor performance is not among them, and neither is failing probation.
- Dishonest performance of duties, or the intentional commission of a criminal offence against the employer.
- Intentionally causing loss to the employer.
- Negligence causing serious loss to the employer.
- Violating lawful and fair work rules or orders after a written warning. The warning is effective for not more than one year, running from the date the employee committed the offence rather than the date the warning was issued. In a serious case no warning is required, but the Act does not define what counts as serious.
- Abandoning duties for three consecutive working days without reasonable cause, whether or not a holiday falls in between.
- Imprisonment under a final court judgment. Where the offence was committed negligently, or is a petty offence, it must also have caused loss to the employer.
The final paragraph of section 119 bars an employer from relying later on a ground that was not stated in the termination letter or given to the employee at the time. What the Act requires is the facts, not a section number. Accumulated annual leave remains payable under section 67 even on a valid section 119 dismissal.
Special severance that stacks on top
Relocation, sections 120 and 120/1: an employer moving the place of business must post notice at least 30 days beforehand. An employee who declines to move may terminate and receive special severance measured at the section 118 rate — that rate is the measure, not a second entitlement, so ordinary severance is not payable on top. Where the notice was not posted, a further 30 days' wages is due in lieu of it. Both are payable within seven days, and the Labour Welfare Committee route is available if the employer disputes that the move materially affects the employee's ordinary living.
Machinery or technology redundancy, section 121: the employer must give 60 days' notice to both the labour inspector and the affected employees, or pay the employee 60 days' wages in lieu. Section 17 advance notice is expressly disapplied. Failing to give the required notice also exposes the employer to a civil fine of up to 20,000 baht under section 146, which sits alongside the 60-day payment rather than replacing it. Section 122 then adds a further 15 days' wages for each year of service where service exceeds six years, with a part-year over 180 days counting as a full year.
These stack rather than substitute. A 20-year employee made redundant by technology can be owed 400 days of ordinary severance, 60 days in lieu of the section 121 notice, and up to 360 days under section 122 — before any award for unfair dismissal. The 360-day cap applies to the section 122 component alone, not to the combined total.
What this calculator does not decide
- Whether allowances, bonuses or service charges form part of the wage base. No government instrument states a general rule; it is decided element by element against the definition in section 5.
- Personal income tax on the settlement. Part of severance may be exempt under Ministerial Regulation No. 126, and a separate computation is available under section 48(5) of the Revenue Code for five or more years of service — but the exemption does not apply to severance received on retirement or on expiry of a fixed-term contract. Confirm the current figures with the Revenue Department.
- Any award for unfair dismissal under section 49 of the Labour Court Act. The court fixes it on five statutory factors with no formula and no cap, so we do not print a range.
- Whether a section 119 ground genuinely applies on your facts, or whether a particular termination is lawful. This tool computes amounts and dates from the statute; it does not assess grounds, work rules or evidence.
Total final settlement
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Enter a first day of employment and a last working day to build the settlement.
Talk to our HR teamPlan the notice datesFrequently asked questions
Section 118 sets six bands by completed continuous service: 30 days' wages at 120 days to under a year, 90 days at one to three years, 180 days at three to six, 240 days at six to ten, 300 days at ten to twenty, and 400 days at twenty years or more. Each figure is a floor measured in days of the last wage rate, and each threshold is tested against the hire anniversary rather than a day count.
The Department of Labour Protection and Welfare's published position is that severance is due on the termination date, with no unilateral instalments. Payment in lieu of notice is due the same day under section 17/1, while wages and other money owed under the Act are due within three days under section 70. Late payment attracts interest at 15 per cent a year under section 9.
Only on one of the six grounds in section 119, or where the employee has completed fewer than 120 days. The grounds are dishonesty or an intentional criminal offence against the employer, intentionally causing loss, negligence causing serious loss, violating lawful work rules after a written warning, three consecutive working days' unjustified absence, and imprisonment under a final judgment. Poor performance and failing probation are not among them, and a ground not stated at the time cannot be relied on later.
Partly. An exemption is available under Ministerial Regulation No. 126, and where the employee has five or more years of service a separate computation under section 48(5) of the Revenue Code may reduce the charge. Neither applies to severance received by reason of retirement or on expiry of a fixed-term contract. The current limits should be confirmed with the Revenue Department, as the instruments in circulation differ.
Yes. Section 67 requires payment for accumulated leave carried forward on resignation and on any employer termination, including a valid dismissal for serious misconduct. Current-year leave is payable in proportion where the employer terminates outside section 119, though the Act prescribes no formula for that proportion.
Two special regimes stack on top of ordinary severance. Where the workplace relocates and the employee declines to move, section 120 adds special severance at the section 118 rate plus 30 days' wages if the required 30-day notice was not posted. Where the redundancy is caused by machinery or technology, section 121 requires 60 days' notice to both the labour inspector and the employees or 60 days' wages in lieu, and section 122 adds 15 days' wages per year of service where service exceeds six years, capped at 360 days for that component.
Sources
- Labour Protection Act B.E. 2541, consolidated text — Department of Labour Protection and Welfare
- Act Amending the Labour Protection Act (No. 7) B.E. 2562 — Royal Gazette text
- The Revenue Department — for the tax treatment of termination payments
This tool sets out provisions of Thai statute and official guidance and computes amounts and dates from them. It is not legal, tax or accounting advice, does not create a lawyer–client relationship, and does not account for your employment contract, work rules, collective agreement, or the facts of any individual case. Several points are marked above as not resolvable from Thai government sources. Take advice from a licensed Thai lawyer before making or accepting a settlement.
Get the settlement right the first time
A settlement that is short, late, or paid as one lump on the wrong day creates interest, a labour-inspector complaint, and in some cases criminal exposure — on top of the amount that was owed anyway. Our HR and payroll teams calculate the entitlement, split the payment run to the right deadlines, and handle the filings that follow.