pay-off payment calculation

[MrJ]

Hi all,

 

my income out of employment is about 65% salary and about 35% allowances for housing/transport/phone.

How is the pay-off amount calculated? I am fearing only out of the normal salary not the allowances? e.g. after 5 year employment, entitled  5 x monthly salary ?

 

Thanks Mr.J

[MrJ]

to be clearer - I might get fired sooner or later due to bad business numbers and outlook and would like to know how much pay-off or compensation payment my employee has to pay me after 10 years in the company and if the monthly allowances are calculated as well?

[Mattd]

22 hours ago, MrJ said:

to be clearer - I might get fired sooner or later due to bad business numbers and outlook and would like to know how much pay-off or compensation payment my employee has to pay me after 10 years in the company and if the monthly allowances are calculated as well?

The severance pay will be based on the length of service, so if in your case you have 10 years or more continuous service, the payment would be 10 months (it is actually 300 days) of the salary portion only.

Benefits are not included.

Note that severance pay is subject to different taxation allowances than normal pay.

[MrJ]

"Note that severance pay is subject to different taxation allowances than normal pay."

• thanks - do you have any details regarding the taxation, I remember a colleague got 10 months but 1 month got lost due to taxes.......

[Mattd]

33 minutes ago, MrJ said:

thanks - do you have any details regarding the taxation, I remember a colleague got 10 months but 1 month got lost due to taxes.......

From Memory it goes something like this.

 

Lets say that the total severance pay is 1,500,000 THB

Deduct special allowance of 300,000 THB

Balance is 1,200,000 THB

Less additional expense of 7,000 THB for every year of service (say 10) - 70,000 = 1,130,000

Now take 50% of this = 565,000

Then add the 70,000 back again = 635,000

Taxable amount is the severance pay income less 300,000 = 1,200,000 minus 635,000 

So tax would be paid on 565,000 of the 1,500,000 payment. (so about 44,225 THB tax owed)

 

This may have changed slightly, as they did some changes for 2017 TY, but I don't think so.

 

I do not remember the exact sequence of the above calculation, but it is something like this.

 

Unless the earnings are high and therefore going in to higher % tax brackets, then the tax paid should not be one month's salary.

 

On a severance payment of 3,463,000 I paid withholding tax of 258,250 in 2016

 

An important thing to remember is you can only do this once in a tax year, so if you have provident fund and intend on cashing this in, do so at the same time as the severance, otherwise it will be taxed at a higher rate if taken the same year.

Edited March 14, 2018 by Mattd

[MrJ]

Merci - lets see how it ends and hope my HR know their job........