Deduction from Salary for English Teachers in Thailand
PIT or Person Income Tax is calculated on the basis of the income of a person in Thailand. In Thailand a person liable to PIT is responsible to compute his tax and then file the tax return. He or she then pays the tax if he or she is liable to pay on a particular date or phase of the year.
There are two kind of taxpayers in Thailand, “resident” and non resident”. Residents are those who are living in Thailand for more than 180 days in any tax year. A non resident is only asked to pay the tax on his income basis whereas the taxes for the residents are also calculated on the basis of their income from foreign sources.
Income on the basis of which PIT is charged is called “assessable income” which includes both income in cash and kind. Thus, all the benefits provided by your employer get covered by the assessable income in Thailand.
The formula by which deductions from salary are done is:
Taxable Income = assessable income – deductions – allowances
Deductions from salary are made from assessable income before allowances are taken into consideration. A deduction of 40% not exceeding 60,000 baht is common from the income earned through employment. Personal allowance is allowed up to 30,000 baht for an individual tax payer. Other allowances include child allowance, old age allowance, Life Insurance premium, education allowance, parents allowance, Provident Fund contribution, charitable contribution and home mortgage interest.
Monthly income up to 100, 000 baht is being exempted from taxation since 2004. But the tax rate multiplies by 10, 20 and 30 per cent with every slab of 50,000 baht from 100,001 baht income onwards.
Although everything is stated clearly, very few schools follow the tax regulations strictly. In fact, unfortunately both the teachers and the schools try to get benefited from the loop holes of Thailand tax regulations. The schools clearly do not state how much they are paying to the teachers and in the process both the schools and the teachers get rid of their tax burdens. This is because most of the teachers work illegally in the schools without sanctioned work permit.
You can collect a tax number from the Tax Department after filling a form in Thai. No English is encouraged. So, you would possibly be in need of some local assistance. You need to produce your passport and work permit. Try to create a pressure on the school you are working for so that you can pay your taxes on time. If someone is paying less, then, a time will come when all have to pay more than required. In order to avoid that situation, pay your taxes on time.