An employee in Thailand who has worked for the same company for twenty-two years is let go without fault. Under the severance table Thailand used until 2019, the answer was three hundred days' wages, the same as for anyone with ten years or more.
That table was replaced in 2019. The law now has a sixth tier, and a long-serving employee is owed four hundred days. The tax exemption on severance now reaches four hundred days as well, which is the part fewer people know.
The six tiers
Section 118 of the Labour Protection Act B.E. 2541 sets severance by band of uninterrupted service, paid at the employee's last rate of wages:
- 120 days but less than 1 year — 30 days
- 1 year but less than 3 years — 90 days
- 3 years but less than 6 years — 180 days
- 6 years but less than 10 years — 240 days
- 10 years but less than 20 years — 300 days
- 20 years or more — 400 days
Below 120 days of service there is no statutory severance at all. For employees paid by piece rate, each band is instead the wages for the last corresponding number of days.
Each band pays a fixed amount however far into it the employee is. Nineteen years and eleven months earns 300 days, one more month earns 400, and twenty-five years also earns 400 — so a calculator that multiplies years of service by a fixed number of days per year is computing a different scheme, such as Malaysia's.
Where the sixth tier came from
The Labour Protection Act (No. 7) B.E. 2562, which received royal assent in April 2019, rewrote the fifth band to read "ten years but less than twenty years" and added the sixth: "twenty years and more … the last rate of wages for four hundred days". Before it, the fifth band read "ten years or more", and three hundred days was the ceiling.
The same amendment added three days' paid leave a year for necessary business, extended equal pay to work of equivalent value, and required everything owed on termination to be paid within three days.
The 15% annual interest on late payments predates it; that rate was already in the Act in 2014, and the 2019 amendment only extended the list of payments it covers.
The tax break moved too
Severance paid under labour protection law is partly exempt from personal income tax. The exemption is in Ministerial Regulation No. 126, clause 2(51), and was amended by Ministerial Regulation No. 394 of B.E. 2567. It now covers severance up to the last 400 days' wages, capped at 600,000 baht, for income received from 1 January 2023.
If a template or summary you rely on gives a lower limit for this exemption, check its date against the regulation's current text, which applies to severance received in 2023 or later.
The Revenue Department's text excludes severance paid because of retirement or the end of a contract period from this particular exemption, so a long-serving employee leaving at retirement should not assume it applies.
When severance is not owed
Section 119 lists the grounds on which an employer may dismiss without paying severance: dishonesty in duty or an intentional criminal offence against the employer; wilfully causing the employer damage; negligence causing serious damage; breaking a lawful work rule after a written warning, which lasts up to a year and is not needed for a serious case; three consecutive working days' absence without good reason; and imprisonment under a final judgment. The ground has to be stated at the time of termination.
A fixed-term contract that ends on its agreed date is exempt from severance only in narrow cases: a specific project outside the employer's normal business, occasional work with a definite end, or seasonal work, completed within two years under a written contract made at the start. An ordinary fixed-term contract that is not renewed still counts.
A worked example
An employee on 30,000 baht a month with twenty-two years' service is in the sixth band. At the usual practice of dividing monthly wages by thirty, that is 1,000 baht a day, and 400 days is 400,000 baht.
Under the pre-2019 table the same person would have received 300,000 baht. Under the current tax exemption, all 400,000 baht falls within the 400-day and 600,000-baht limits.
Dividing by thirty is standard practice rather than a rule written into section 118, which speaks only of "the last rate of wages" for a number of days. The Act's explicit thirty-day divisor is in section 68, which concerns overtime and holiday pay.
Other money owed on termination
Severance stops rising at twenty years. Notice pay, unused annual leave and, where a workplace relocates, special severance are calculated separately under their own rules and are paid on top.
What to do with it
An employee near the twenty-year mark should confirm the start date on the employer's records, since a single month can move the entitlement from 300 days to 400.
For payroll teams, the severance table changed in 2019 and the tax exemption later, so a template older than both needs checking on each.
One related figure has also moved recently: maternity leave, which the 2019 amendment set at 98 days, was raised to 120 days, 60 of them paid, by a further amending Act that took effect in December 2025. Guides quoting 98 days are describing the previous law.
Where this comes from
The severance bands are from the Labour Protection Act B.E. 2541, read in the Department of Labour Protection and Welfare's English consolidation of 2014 for the earlier text and in an English translation of the Labour Protection Act (No. 7) B.E. 2562 for the amendment; the Thai Royal Gazette and the Council of State's site did not respond on 17 September 2026, so the Thai original was not read and the translations carry no legal authority. The tax exemption is from the Revenue Department's text of Ministerial Regulation No. 126, read the same day. The maternity leave change is from the Government Public Relations Department.
The 2014 consolidation refers to section 118 seven times and has no four-hundred-day band anywhere, which confirms the earlier ceiling. The Ministry of Labour's summary of the amending Act in force from December 2025 lists no change to section 118.
