I'm a teacher in Bangkok with an extension of stay/work permit, and for the last 3-4 years my average tax (deducted by my employer each month) has been around 10-12%. This year it has leapt up to 18-20%, as my annual earnings have increased.

In the UK if you enter the higher tax rate, you only pay the higher rate on the salary over the limit. In Thailand (so I've been told) you pay the higher rate on the whole salary, which is very demotivating.

Can anyone confirm if this is really the case?

You will only pay the higher tax rate on the salary over the limit, as you put it.

You should be paying less taxes this year, all things being equal. I'll attach a chart....

Thailand Revenue Department

The income tax rates set by the revenue department are "cascading", i.e. there are different tax brackets that don't infringe on each other and are only applied to those parts of your annual salary that fall into them. Currently the tax brackets and rates are:

Up to 150,000 Baht annual income -- no income tax

150,001 - 300,000 Baht -- 5 %

300,001 - 500,000 Baht -- 10 %

500,001 - 750,000 Baht -- 15 %

750,001 - 1,000,000 Baht -- 20 %

1,000,001 - 2,000,000 Baht -- 25 %

2,000,001 - 4,000,000 Baht -- 30 %

Over 4,000,000 Baht annual income -- 35 %

Let's say your total annual income is 899,000 Baht. Your annual income tax would be calculated as follow:

On the first 300,000 Baht you pay 5 % tax = 15,000 Baht

On the next 200,000 Baht you pay 10 % tax = 20,000 Baht

On the next 250,000 Baht you pay 15 % tax = 37,500 Baht

You've now been taxed for a total of 750,000 Baht. There remain 149,000 Baht (up to your total annual income of 899,000) that fall into the next tax bracket. On these 149,000 Baht you pay 20 % tax = 29,800 Baht.

Your total annual income tax on 899,000 Baht therefore would be 102,300 Baht.

As you can clearly see, these tax brackets are only applied to the corresponding income amounts, but you do NOT pay the highest percentage amount on your your whole salary (i.e. 20 % on 899,000 Baht). Someone's been telling you BS.

Now, since your company deducts income taxes MONTHLY from your salary, I don't know what system they deploy to calculate the deductible amount. You should ask them.

In any case I highly recommend to you to file an income tax return for the previous year. If you feel that you've been paying too much tax since your salary increase, you should in all likelihood be able to receive back some money (provided you don't miss the filing deadline of 31 March).

Edited March 16, 201412 yr by Misterwhisper

The new employer might deduct things at the higher rate but it all washes out at tax return time when you file a return and they calculate your actual liability

Thailand Revenue Department

Last year one could do one's tax form online at that website. Anyone know if it's still available?