Foreign Currency Based Salaries Translated To Thai Baht

[Misty]

If you earn a salary based on a foreign currency but paid in Thailand, how is it being translated into Thai baht--i.e., once upon time of hiring, adjusted annually at an agreed upon rate, monthly adjustment, etc?

After the baht floated there seemed to be a variety of translation methods that employers were using. Some 10 years later, I'm wondering if there's a standard method that most companies use.

Thanks for any input, Misty

Edited November 12, 2007 by Misty

[bendix]

It really depends on the arrangement you make with your employer. When I first arrived my US dollar amount was fixed at the prevailing rate when I started (42 baht) and remained for the entire year. When I got a review it was than fixed at the new prevailing rate (slightly lower) but not enough to make a difference.

Around twelve months ago I renegotiated and fixed at the baht amount so in the future the risk(or benefit) is being picked up by my employer.

I know some guys though who's salary is adjusted monthly at the prevailing rate. They've been hurting for the last two years.

[torrenova]

It is common in the banking world for the employer to pick up the FX risk.

[Misty]

Thanks Bendix and Torrenova. Sounds like things haven't changed much in the past few years in that each firm or perhaps industry handles foreign-currency based salaries their own way. Where possible, employees should negotiate what they can and what works best for them.

Cheers, Misty

[PattayaParent]

I get my foreign currency salary paid in UK and just transfer what I need to here.

[thaihome]

A common practice for MNC's is to pay salary in home currency into home country bank. Housing and living allowance is then set in local currency and paid locally. Only exchange risk (borne by employee) is if allowances are not enough to actually live on.

TH

[kiakaha]

I get my foreign currency salary paid in UK and just transfer what I need to here.

How do you pay your thai tax and get a work permit then ?

As an employee of a MNC for many years I can tell you that some expat transferees get a "nominal" thai salary, which they pay Thai personal income tax(PIT) on.This will be a small amount(relative to their actual salary), maybe 100K a month for a senior manager. This enables them to get a work permit, immigration permit extension and re-entry permit etc... Then the bulk of their salary/bonuses/allowances etc.. will be paid offshore(in a tax efficient structure) in the currency of their choice.

[backflip]

It also depends upon how you are viewed by the company. While I was working for Dell (China), an "expat" was paid by the home office (in TX) in USD, and a"local hire of a foreign national" was paid in RMB by the office in China.

[Irene]

The fair method is to base on the rate of exchange ruling on the date of Baht payment to an employee since the exchange risk is with the employee and not the employer. Implicitly, the employer has to use the foreign based currency to be converted to Baht to disburse to that employee or alternatively the employee can collect the currency and up to him to convert whenever he wishes.