Requirement of paying Social Security for 4 Thai Staff per 1 Work Permit

[RiverT]

I recieved an email from my solicitor/agent saying the following:

"Hi Our Client,

 

After disclosing this possibility with our clients almost 2.5 years ago (who had companies with work permits at the time), it looks as if it's finally coming to fruition unfortunately :(. The Labor Office has confirmed the following from December 2018 - to RENEW an existing work permit your company must have:

 

a) 4 Thai staff (per work permit) and

b) be registered for social security OR be in the process of registering for social security and 

c) the company must now be showing an annual profit and

d) businesses must have a company sign"

I am not sure that this is a new policy or is only now being enforced on Koh Samui, and am trying to find out just what it entails.

a) Social Security, if they already pay it as self-employed but now
become employed by my company, can they re-register? Will they count?
b) Is it normally paid by employee or employer? If employer, is it
paid on income before or after withholding tax?
c) If I register these 4 people, does the company have to pay income
tax for them, or withholding tax?
c) After employment ends, can they continue to pay the Social Security
themselves? If they don't what consequences?
d) Do I have to designate their place of work?
e) Do I have to put the at least minimum wages of these 4 people on the books, thus potentially making the company unprofitable?

 

It seems to me that this regulation makes being a sole trader almost impossible now. I am being advised that the Govt just wants more Social Security money and doesnt care if these 4 Thai people are actually being paid or paying income/withholding tax or not. I am also being advised that if I make my Thai gf the majority owner and director of my company, she would not be under those restrictions, which I really don't understand. I no longer trust my solicitor/accountant on this and so am looking for wider opinions.

 

Anyone else affected by this, or has answers to these questions?

 

Thx in advance.

[Wilson Smith]

Your questions sure do make it look like you are in over your head. To have a WP you must work for a legal company who follows the law.

Not " doesnt care if these 4 Thai people are actually being paid or paying income/withholding tax or not"

[kane666]

AFAIK:

b) Both. 5% to a maximum of 750 baht. So for example:

 

Staff member 1 salary 10,000 per month. You pay them 9,500 the other 500 (5%) goes to SS along with another 500 (5%) from the company.

Staff member 2 salary 20,000 per month. You pay them 19,250 and the other 750 (not 5% as that would exceed the 750 max) goes to SS along with another 750 from the company.

[RiverT]

1 hour ago, kane666 said:

AFAIK:

b) Both. 5% to a maximum of 750 baht. So for example:

 

Staff member 1 salary 10,000 per month. You pay them 9,500 the other 500 (5%) goes to SS along with another 500 (5%) from the company.

Staff member 2 salary 20,000 per month. You pay them 19,250 and the other 750 (not 5% as that would exceed the 750 max) goes to SS along with another 750 from the company.

So the 500 that the employee pays in fact the company pays them and trusts them to pay to SS or the company deducts it from their pay and handles it for them, like in the UK?

 

[kane666]

17 minutes ago, RiverT said:

So the 500 that the employee pays in fact the company pays them and trusts them to pay to SS or the company deducts it from their pay and handles it for them, like in the UK?

 

The employer does it all so they would pay the employees 500 (which was held back from their salary) plus the employers contribution of 500 directly to SS on the same form.

[JackThompson]

There are not easy ways to avoid the 4-Thai-hires rule for getting a foreigner's work-permit, other than to split the business with your wife, which sometimes lowers it to 2-Thai-hires, depending on local labor-office policy.

[scorecard]

9 hours ago, RiverT said:

So the 500 that the employee pays in fact the company pays them and trusts them to pay to SS or the company deducts it from their pay and handles it for them, like in the UK?

 

maybe different in some cases but normally company deducts the employee contribution from employees earnings, then company adds the company contribution, then sends the total of both amounts direct to the SS dept.