"Arriving late deducts half a day", "Breaking a glass deducts from your salary", "Resigning without advance notice means the final instalment is not paid" — these are rules still found in many companies, and most of them violate labour protection law.
The principle under Thai law is that employers are prohibited from deducting wages, overtime pay, and holiday work pay, and only then are exceptions allowed for certain items — not for employers to deduct anything written in their regulations.
Items That May Be Deducted
Deductible as provided by specific laws: no additional consent required
- Income tax subject to withholding at source
- The employee's portion of social security contributions
- Contributions to a statutory fund of which the employee is a member
Deductible upon obtaining the employee's consent and subject to a cap
- Trade union dues in accordance with the union's rules
- Debts owed to a savings cooperative, or welfare debts that benefit the employee alone
- Work security deposits, in work where the law permits a deposit to be required
- Damages caused by the employee intentionally or through gross negligence
- Provident fund contributions under an agreement
Cap: Items in the second group may be deducted at no more than ten per cent per item, and in total no more than one-fifth of the money the employee is entitled to receive in that period, unless the employee consents to a larger deduction.
The consent should be in writing, clearly specifying the items and the amounts. A broad statement in a job application such as "I consent to deductions as the company sees fit" is usually not enough.
Common Cases
Arriving late The employer does not have to pay wages for time not actually worked. But deducting more than the time missed — for example, docking half a day for being a few minutes late — amounts to punishing the employee by deducting wages, which the law does not permit. The correct approach is a written warning under the work rules and using an attendance bonus as an incentive instead.
Damaging property A deduction may be made only for damage caused by intent or gross negligence, with the employee's consent, and within the legal ceiling. Ordinary mistakes in the course of work — such as an item dropping and breaking while performing assigned duties — are a business risk. No deduction may be made.
Resigning without advance notice Wages for work already performed must be paid on schedule. If the company has genuinely suffered damage, it must be agreed separately or claimed separately. Withholding the final instalment is in itself a violation of the law.
Work deposit A deposit may be required only for certain types of work specified by law, such as work that involves responsibility for the employer's money or property, and it must be returned when the employment ends within the period prescribed by law.
Court-ordered salary garnishment This is a different matter from a deduction made by the employer. The employer must comply with the letter from the enforcement officer. See How Much of a Debtor's Salary Can Be Garnished?
If the Deduction Is Wrongful
Wages deducted without entitlement are treated as unpaid wages. The employer must return them together with interest as required by law, and if the employer intentionally fails to pay without reasonable cause, an additional accumulating amount may be payable based on the length of the arrears. Deducting wages in violation of the law also carries criminal penalties. The employee may file a complaint with a labour inspector or bring a case before the Labour Court.
Employer side: Review the company's deduction rules
- Go through the work rules, employee handbook, and employment contracts to identify any deduction rules that do not fall within the items permitted by law.
- Replace "fines" with warnings and disciplinary action imposed through the proper procedure.
- Prepare separate consent forms for each item, for welfare loans or cooperative debts.
- Set up the payroll system to automatically check the deduction ceiling for each pay period.
Read more
- Unpaid wages and unpaid overtime
- Work rules: what size company must have them
- Which payments count as wages
📌 See more: Employment contracts, salary structures and employee handbooks · Labour cases
If you want to check whether the deduction rules in your company's work rules or employee handbook actually hold up, consult our team of lawyers. We will identify the risky points and propose solutions suitable for your company.
This article is general information, not legal advice for any specific case.
