Thai Tax on Severance and Retirement Lump Sums

Calculate tax on a one-off payment on leaving employment using the separate method in section 48(5), including the severance-pay exemption up to THB 300,000, the THB 7,000 per year of service deduction and the further 50% deduction.

Statutory severance on termination (not retirement or end of contract) is exempt up to the last 300 days of wages and THB 300,000. The rest, provident fund payouts, and other payments up to last salary × years may be taxed separately under section 48(5) if you worked at least 5 years: deduct THB 7,000 × years (not above the income), then 50% of the rest, and apply progressive rates with no allowances. A remainder of 183 days or more counts as a full year.

Example: last salary THB 50,000, 10 years of service, severance THB 500,000 on termination. THB 300,000 is exempt, leaving THB 200,000; minus THB 70,000 leaves THB 130,000; minus 50% leaves THB 65,000, below the taxable threshold. Adding a taxable THB 1,000,000 fund payout makes the net THB 565,000 and the tax THB 37,250.

The separate method applies only to payments in the first tax year they are paid, and none of them may be combined with other income. Provident fund money that is exempt under the legal conditions should not be entered. Other pay above the limit is taxed with normal income. Compare with combining, using the income tax calculator, before choosing.