The Thai government has approved reductions in both employer and employee contributions to the nation’s Social Security Fund for a six-month period effective July 1, 2009.
Reductions in social security contributions have been introduced in an attempt to increase employees' disposable income, alleviate cost pressures for employers, and stimulate the economy, which has been slowed by the global recession.
Key details
The main provisions of the measure are as follows:
- Employer and employee contributions have been reduced from 5% to 3% of wages. In addition, for employees, the maximum contribution of THB 750 (USD 22.40) has been reduced to THB 450 (USD 13.26) for people earning THB 15,000 (USD 447.92) or more a month.
- The new contribution rates are temporary. They apply between July 1 and December 31, 2009, after which the original contribution percentages will come back into effect.
- The government contribution rate remains unchanged at 2.75%.
The measure was implemented after months of debate between the Thai government and various labour unions, who argued that the contribution cuts would be unlikely to bring any benefit to laid-off workers, and would instead have a negative long-term impact on the integrity of the Social Security Fund. The resolution was finally passed on May 6, 2009.
Key details
The main provisions of the measure are as follows:
- Employer and employee contributions have been reduced from 5% to 3% of wages. In addition, for employees, the maximum contribution of THB 750 (USD 22.40) has been reduced to THB 450 (USD 13.26) for people earning THB 15,000 (USD 447.92) or more a month.
- The new contribution rates are temporary. They apply between July 1 and December 31, 2009, after which the original contribution percentages will come back into effect.
- The government contribution rate remains unchanged at 2.75%.
The measure was implemented after months of debate between the Thai government and various labour unions, who argued that the contribution cuts would be unlikely to bring any benefit to laid-off workers, and would instead have a negative long-term impact on the integrity of the Social Security Fund. The resolution was finally passed on May 6, 2009.