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1. Introduction
Under the Labour Protection Act, an Employee Welfare Fund (“Employee Welfare Fund”) is supposed to be established to provide financial support for employees in cases such as cessation of employment, death, or other circumstances as prescribed by the Employee Welfare Fund Committee (the “Committee”).
Despite having been specified in the Labour Protection Act for over 20 years, the Employee Welfare Fund has not been fully operational. Since its inception, it has only provided easements for employees in some cases, using the government budget.
The recent Royal Decree, enacted on 15 November 2024, will eventually make the Employee Welfare Fund fully operational from 1 October 2025.
2. Scope of the Employee Welfare Fund
Employers with 10 or more employees are required to contribute to the Employee Welfare Fund.
3. Contribution
As a result of the enacted Royal Decree, all employers and employees (through their employers) are required to contribute to the Employee Welfare Fund from its fully operational date (1 October 2025). The contribution payment is additional to that of the Social Security Fund, whereby employers make a direct contribution and are responsible for deducting from employees’ salaries to contribute on their behalf.
The rate of contribution (same rate for both employer and employee) is as follows:
| Period | Rate (% of wages) |
| 1 Oct 2025 – 30 Sep 2030 | 0.25 |
| 1 Oct 2030 onwards | 0.5 |
Unlike Social Security Fund contributions, there is no maximum wage (ceiling) amount for the calculation of the contribution (at the time of drafting this Newsletter) while the Social Security Fund contributions are calculated based on the actual wage/salary with the maximum of THB 15,000.
4. Exemptions
Employers and employees are exempt from contributing to the Fund if they already maintain:
a) Provident fund established in accordance with the law, or
b) Private welfare fund that provides benefits in cases of employment termination or death, as per sub-regulations issued by the Committee. This is a fund required by law to be established by an employer who elects not to join or contribute to the Employee Welfare Fund and does not offer a provident fund benefit to its employees. Since the law does not assign a specific term for this fund, we will refer to it as “Employer-Provided Welfare Fund” for the benefit of this Newsletter.
5. Legal requirements for the Employer-Provided Welfare Fund
As mentioned above, apart from maintaining a provident fund, employers can elect to establish a qualifying Employer-Provided Welfare Fund to avoid making contributions to the Employee Welfare Fund established by the government. Key considerations for such Employer-Provided Welfare Fund under Ministerial Regulations include:
a) Contribution: Employers are required to deduct contributions from employees’ salaries and match them with the employer’s contributions and deposit them to the bank account designated for each of the employees.
b) Contribution amount: The contributions must be higher or equivalent to those of provident funds, which are currently at a minimum of 2% of the employee’s wage.
c) Condition of payment: The employer is required to specify and establish the conditions with the commercial bank or other financial institution regarding the payment conditions of the contributions as follows:
– Cessation of employment (resignation, retirement, or termination): employers must pay the entire balance, including employer contributions and any accrued interest (“Welfare Pay”) within 30 days of the employment cessation date.
– Death: the ownership of such Welfare Pay shall be transferred to beneficiaries designated by the employee or heirs as per the Civil and Commercial Code.
6. Summary
From 1 October 2025, all employers and employees (through the employers) are required to contribute to the Employee Welfare Fund, with equal rates starting at 0.25% of wages from 1 Oct 2025 – 30 Sep 2030 and increasing to 0.5% from October 2030 onwards.
However, employers with an existing provident fund or qualifying Employer-Provided Welfare Fund are exempt from these contributions.
It is crucial to note that the Employer-Provided Welfare Fund represents the least favorable option for employers, as the full amount of the Welfare Pay must be paid out upon the cessation of the employment, regardless of their service year. In contrast, under a provident fund, employers retain some control over the payment through the specified payment conditions in the provident fund regulations.
However, due to the low contribution rate, some employers may choose to participate in the Employee Welfare Fund. That being said, companies that do not provide a provident fund benefit may lose some appeal to attract new employees.
