The Thai cabinet has doubled the tax-free threshold for redundancy compensation to 600,000 baht, benefiting long-serving employees and providing relief to lower and middle-income earners, expected to stimulate consumer spending and economic growth.
Increased Tax-Free Threshold for Redundancy Compensation
The Thai cabinet has recently announced a doubling of the tax-free threshold for layoff compensation to 600,000 baht, bringing it in line with the Labour Protection Act. Workers who have been employed for 10+ and 20+ years will now receive tax-free compensation for 300 and 400 days respectively, providing significant financial support during challenging economic times.
Relief for Lower and Middle-Income Earners
The increase in the redundancy compensation tax threshold is aimed at offering relief to lower and middle-income earners who are disproportionately affected by redundancy. This change will prevent individuals from being pushed into higher tax brackets when receiving redundancy payments, potentially saving them from facing a hefty tax bill.
Anticipated Positive Impact on Economy
The decision to double the tax threshold for redundancy compensation reflects a recognition of the financial strain caused by job loss. This move is expected to stimulate consumer spending and drive economic growth by putting more money in the hands of individuals. While the exact implementation timeline is pending, staying informed about forthcoming changes is crucial for both employees and employers to understand the implications.
Source : Redundancy Compensation Tax Threshold Set to Increase Twofold