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Deduction from Salary - Information for TEFL Teachers Thailand

Person Income Tax (PIT) is directly levied on the income of a person in Thailand. In general, a person liable to PIT has to compute his tax liability, file tax return and pay tax, if any, accordingly on a calendar year basis.

Taxpayers are classified into "resident" and "non-resident". "Resident" means any person residing in Thailand for a period or periods aggregating more than 180 days in any tax (calendar) year. A resident of Thailand is liable to pay tax on income from sources in Thailand on a cash basis, regardless where the money is paid, as well as on the portion of income from foreign sources that is brought into Thailand. A non-resident is, however, subject to tax only on income from sources in Thailand.

Income chargeable to the PIT is called "assessable income". The term covers income both in cash and in kind. Therefore, any benefits provided by an employer or other persons, such as a rent-free house or the amount of tax paid by the employer on behalf of the employee, are also treated as assessable income of the employee for the purpose of PIT.

Certain deductions and allowances are allowed in the calculation of the taxable income. Taxpayers shall make deductions from assessable income before the allowances are granted. The simple formula for calculation would be –

(TAXABLE INCOME = assessable income - deductions - allowances)

Income from employment enjoys a deduction of 40%, not exceeding 60,000 THB. For a single tax payer Personal Allowance is permissible up to 30,000 THB. Other allowances would include Spouse allowance, Child allowance, Parents allowance, Old age allowance, Education allowance, Life Insurance Premium, Approved Provident Fund contribution, Home Mortgage interest and charitable contribution.

From the year 2004 onwards, monthly income up to 100,000 THB has been exempted from taxation. However, from 100,001 upwards with every slab of 50,000 the tax rate multiplies as 10, 20 & 30 per cent.
In spite of all the well-laid dictates, tax in Thailand continues to be a very cloudy issue. While schools should tax you according to the tax regulations, more than a few in fact do not.

It seems that most schools have a bit of a fiddle going so that both the teacher and the school benefits. Basically, they do not declare exactly how much they are making and how much they are paying which reduces both their and your tax burden. This whole situation is complicated by the fact that there are many teachers work illegally without a legal permit. However, supposedly nobody has been heard to be adversely affected by their school diddling tax.

You can get a tax number from the Tax Department by going filling out a form in Thai with no English. Therefore, it’s recommended to seek for some local assistance. You necessarily need a passport and your work permit. While it is nice to think that one is paying less tax than they should be, you never know when this may come back to haunt you. In this case, it is probably in your best interests to put pressure on the school to make sure everything with your pay is above board.

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