Taxation

[Big Boy]

I was reading the 'What is the typical expat?" thread elsewhere on this forum, and it got me thinking.

When we retire to Hua Hin my wife and I are considering employing somebody local to clean/do odd jobs for us. I was wondering what are the tax (please include anything else such as National Insurance etc when responding) implications?

I wonder about this because of recent property/company threads where shareholders have to prove they've been paying appropriate taxes, so they must exist in some form.

Is there a threshold below which you don't have to worry? I have family working in Hua Hin, but this is something we've never discussed. My wife doesn't seem to have ever knowingly paid any income tax while working in Thailand, but this type of information seems to be a bit above her - not meant as disrespectful, she just doesn't know.

If I was to employ somebody local, I would want to do it legally. However, I fear that the bureaucracy of taxation may make this too difficult ie I'd prefer we did the work ourselves rather than have to employ accountants etc.

[PeteC]

BB, I remember reading recently that the personal tax threshold is either 16 or 20 thousand per month, below which a Thai pays nothing. Not to worry concerning any household help you may hire. Another intrepretation is that these people are independent contractors as you do not hire them to work for your (or a) company, but for personal services. Therefore any tax matters are their personal business. Pete

[Burger]

Big Boy,

This inland revenue website might help you:
http://www.rd.go.th/publish/6045.0.html

Personal Income Tax you'll see the first 100,000 Baht of income p/a is exempt from PIT, then there's personal allowances (30,000 if single, 60,000 if married, plus more for kids etc), also there's further 'deductions' allowed of 40% of income (upto max of 60,000 Baht)
So as Pete says, a domestic helper should not go over the threshold to be liable for PIT (unless they have many other incomes!?!?)

If you look under 'Withholding Tax' section, you'll see that as a payer of income you are liable to deduct 'withholding tax' from an employee at source, if they are liable for tax. Presumably to avoid this hassle you just get your employee to give you a letter confirming their total income from all work does not exceed 'X' amount or that they only work for you.
I can guarantee your employee will not be filing a PIT return in any case

Social Security, I don't know if this is relevant to individuals employing someone, but as a Limited Company we have to pay 5% & 5% of employee's income each month, even if they are under the PIT threshhold. Think one 5% is 'withholding from government' which we get back, the other is employer's contribution that we don't get back.
You may wanna check out if you have to do social security as an individual employer.

Appreciate you wanna do things legally, but don't know anyone who does any of the above when taking on part-time domestic help.

Good luck and check all this with an accountant as I may have it arse-about-face

Burger

[Big Boy]

Thanks guys, very useful information. It certainly looks as if retirement will mean retirement.

[PeteC]

Thanks guys, very useful information. It certainly looks as if retirement will mean retirement.

Absolutely! Don't worry at all about this little stuff. You'll understand once you get here and and start to live the life. Pete

[johnnyk]

Good topic.
I will be renting my house sometimes to vacationers and will show income and expenses on my company tax return as I want the company to be active.
Can I claim the cleaning costs as an expense?
Would I need some kind of receipt from the cleaner?
Thanks for any help.

[siriratc]

Please visit: www.phuket-post.com and go to "Accounting Angel" column
which consist of many useful Thai tax issues in English.