Thailand Withholding Tax Calculator

Withholding rates by type of payment

Withholding tax is the mechanism by which the payer deducts part of a payment and remits it to the Revenue Department on the recipient’s behalf. The mistake made most often is applying the rate to a VAT-inclusive figure, which over-deducts, because withholding tax is always calculated on the amount before VAT.

If you freelance or contract in Thailand this affects you directly: you will be paid less than your invoice total, and the difference is not lost — it is tax already paid on your behalf, which you reclaim when you file. Keep every withholding certificate you receive.

The correct order of calculation. Start with the pre-VAT base. Calculate 7% VAT on that base. Calculate the withholding tax on the same base. The amount actually paid is base plus VAT minus withholding tax.

For example, contracting work worth 10,000 baht from a VAT-registered supplier: the base is 10,000, VAT is 700, withholding at 3% is 300, and the payment is 10,000 + 700 − 300 = 10,400 baht.

The common error is taking the VAT-inclusive 10,700 and applying 3% to it, giving 321 baht. That over-deducts by 21 baht, short-pays the recipient, and puts a figure on the withholding certificate that does not match what it should.

The rates in ordinary use. Contracting, construction, services, commission and royalties are withheld at 3%. Property rental is 5%. Advertising is 2%. Transport is 1%.

Who has to withhold. A payer that is a juristic person must withhold on every payment of the specified types. Individuals generally have no obligation to withhold, with some exceptions such as rent.

When it must be remitted. By the 7th of the following month, using form PND 3 where the recipient is an individual and form PND 53 where the recipient is a company. Filing online extends the deadline by a further 8 days.

The recipient does not lose the money. Tax withheld is a tax credit. Keep the withholding certificate and set it against the tax due on your annual return. If more was withheld than you actually owe, the difference is refunded — which is a common outcome for freelancers whose annual income falls below the threshold implied by the flat 3%.

If the payer fails to withhold, the payer becomes liable for the amount along with surcharges and penalties. Getting it right is the payer’s responsibility, not the recipient’s.