Severance pay--tax rate?

[thainet]

When I leave my job later this year I will be due 3 months severance pay. I believe this is usually paid in one lump sum (and within 7 days after the last paycheck) and with-holding taxed, but I believe 'Severance Pay' is taxed at a lower rate than normal.

Does anyone know what this rate is, any experience with similiar case..thanks. (PS..no issues on payment from company, just my own inquiry on rate).

Edited January 13, 2017 by thainet

[ubonjoe]

I think the tax rate is the same.

Look here. http://www.rd.go.th/publish/6045.0.html

[sanmyintmaung]

Involuntary Severance

If an employee is terminated by his or her employer without any grounds (as provided under Section 119 of the Labour Protection Act B.E. 2541 (A.D. 1998)), he or she is entitled to severance pay under Section 118. The severance pay that the employee derives from the employer under this section is exempted from personal income tax for the portion not exceeding 300,000 Baht and not exceeding “10 months” salary under Clause 2 (51) of the Ministerial Regulation (M.R.) No. 126. The portion over 300,000 Baht or the portion that is more than “10 months” salary is subject to personal income tax to be withheld by the employer. However, in the case where the employee has worked for that employer for a continuous period of 5 years or more, the excess portion may be entitled to a special deduction as a “one-time payment” under Section 48 (5) of the Revenue Code, as noted below.

 

Voluntary Severance

If the employee takes voluntary redundancy (e.g. by submitting a resignation letter to the employer or by signing a mutual agreement of voluntary redundancy, etc.), the severance pay or any payment received due to such termination is not entitled to any tax exemption under Clause 2 (53) of MR No. 126. Similar to above, in the case where the employee has worked for that employer for a continuous period of 5 years or more, the severance pay or any payment received from the employer may be entitled to a special deduction.

 

Source

http://www.mazars.co.th/Home/Doing-Business-in-Thailand/Tax/Tax-Treatment-on-Employee-Termination-Payments

 

Edited January 13, 2017 by sanmyintmaung