Thailand is an easy place to engage a contractor, as long as the relationship is genuinely independent. Most contractors are individuals, taxed at progressive rates of 0% to 35%, and a foreign client pays an invoice gross and does not withhold. The points to get right are classification, because the Labour Protection Act defines employment by substance; foreign nationals’ work rights, because working without a permit is an offence; and an IP clause that names its term. The payment side is on our Thailand payouts page. This is general information, not legal advice.
How a Thai contractor is taxed
A contractor is usually an individual taxpayer. A Thai national’s 13-digit national ID number is their tax ID, with no separate application (lookuptax.com, checked 2026-10-07). A person who spends 180 days or more in Thailand in a calendar year is a resident (PwC, reviewed 2026-08-24). Residents are taxed on income from work in Thailand, and income from abroad is taxed once it is brought into Thailand, in the year earned or a later one (PwC, reviewed 2026-08-24).
| Net income (THB) | Rate |
|---|---|
| Up to 150,000 | Exempt |
| 150,001–300,000 | 5% |
| 300,001–500,000 | 10% |
| 500,001–750,000 | 15% |
| 750,001–1,000,000 | 20% |
| 1,000,001–2,000,000 | 25% |
| 2,000,001–5,000,000 | 30% |
| Over 5,000,000 | 35% |
Source: PwC Tax Summaries, reviewed 2026-08-24.
Freelance fees are usually income category 2 under Section 40(2), income from the hire of work or services, with a 50% deduction capped at THB 100,000 (UnionSPACE, checked 2026-10-07; PwC, reviewed 2026-08-24). A contractor who carries on a business or profession may instead deduct actual expenses or a percentage of 10% to 60%, and every taxpayer gets a THB 60,000 personal allowance. On THB 1,200,000 a year, about USD 35,700, the taxable amount is THB 1,040,000 and the tax roughly THB 125,000, or 10.4% of gross, before other deductions. That is an illustration, not advice: the contractor’s own adviser picks the route.
The contractor files an annual return, PND 90, by 31 March, or 8 April online, and business owners also file a half-year return by 30 September (PwC, reviewed 2026-08-24).
VAT. The 7% rate runs to 30 September 2027 under Royal Decree No. 807 (Forvis Mazars, August 2026). A business registers within 30 days of reaching THB 1.8 million of turnover, and services rendered in Thailand but consumed entirely abroad are zero-rated (Forvis Mazars, checked 2026-10-07). Import-of-services VAT, Form PP 36, is a duty of a Thai company buying from abroad, so it does not apply to you as a foreign payer.
Foreign contractors and work permits
If the contractor is a foreign national living in Thailand, a permit question sits on top of tax. The 2017 Royal Decree defines work as “exerting one’s physical energy or employing one’s knowledge to carry out a profession or perform works, whether or not for wages or other benefits”, and working without authorisation carries a prison term and a fine (Tilleke & Gibbins, July 2017).
The Destination Thailand Visa (DTV) is the visa built for remote workers: five years, multiple entries, 180 days per entry, with proof of at least THB 500,000 and a USD 400 fee (Royal Thai Embassy, Yangon, checked 2026-10-07). Thai embassies add that it is a special tourist visa: holders may not obtain a Thai work permit, work for companies in Thailand or freelance for Thai clients (Royal Thai Embassy, Budapest, checked 2026-10-07). Work for you, a foreign client, is the use it was designed for. A Thai national needs none of this. Ask a foreign contractor which visa they hold and record it in your file; it is their compliance, but a problem there ends the engagement.
Reclassification risk
The Labour Protection Act defines an employment contract as an agreement, written, oral or implied, under which a person agrees to work for an employer and the employer agrees to pay wages in return (Labour Protection Act, unofficial translation, checked 2026-10-07). The label does not matter. A monthly retainer, fixed hours, a manager who assigns daily tasks and a single client together look like that agreement. Thai practitioners say authorities look at the level of control over how, when and where the work is done, and at how far the person is integrated into the business (Grata International, January 2026).
Reclassification brings employee rights. An employee with one to three years of service is owed severance of at least 90 days of final wages, and after a year, at least six working days of annual holiday (sections 118 and 30 of the Act, same translation). Project-scoped work with the contractor’s own schedule and other clients is low-risk. For the general test, see contractor misclassification.
What to put in the contract
- A written services agreement scoped to deliverables, rate, currency and payment dates, with the contractor as an individual.
- IP in writing, with a term. Under the Copyright Act, copyright in commissioned work vests in the commissioning party unless the parties agree otherwise (s. 10), but in employment the author keeps it unless agreed in writing (s. 9). That is another reason a reclassified contractor is a problem. An assignment must be in writing with both signatures, and if no duration is stated it is deemed to last 10 years (s. 17). Assign all economic rights for the full term of protection, and add the author’s consent to modification, because moral rights stay with the author (s. 18).
- The payout currency. Name THB or USD and who bears conversion and bank fees.
- Independence markers: the contractor’s own equipment and hours, deliverable-based acceptance and the right to serve other clients.
Taxes and paperwork
The contractor’s side. Choose a tax route, file PND 90 and, if they run a business, the half-year return; register for VAT above THB 1.8 million.
The client’s side. Thai withholding rules, a fixed 3% on general service fees and 5% on professional ones, bind Thai businesses (Grata International, January 2026). We found no Thai rule that makes a foreign company with no Thai entity withhold, so you pay gross against invoices; if you have a Thai entity or branch, take local advice. US payers collect a W-8BEN and file no 1099. Keep the contract, invoices and proof of each payment.
Currency rules on the contractor’s side
Anyone receiving foreign currency from abroad worth USD 1 million or more must repatriate it within 360 days, selling it to an authorised bank or depositing it in a foreign-currency account. Banks ask for supporting documents on transactions from USD 200,000 unless they have done KYB on the customer (bot.or.th, checked 2026-10-07). An ordinary contractor invoice is below both lines.
How to pay contractors in Thailand
Wise delivers baht to Thai bank accounts, and a SWIFT wire can go to a THB or FCD account, where the receiving bank charges to credit it. PromptPay is Thailand’s domestic payment rail and mostly matters once the money is in the country. Rails, costs, failure points and the platforms that pay Thai contractors are compared on our Thailand payouts page.
Contractor of Record in Thailand
A Contractor of Record is the contracting party with the Thai contractor, and it keeps the invoices and documents that back their annual return. It fits long engagements and teams. 4dev acts as Contractor of Record — the contracting party for each contractor — which reduces reclassification risk. Other providers also sign with the contractor as the counterparty; read the liability clause in the COR contract, not the product name. Where the role is a job in substance, hire through an EOR instead. Compare providers in our COR rating.