When do you graduate from an EOR to your own Thailand entity?
From 1 January 2026 the Social Security Fund wage base rose to THB 17,500/month, so the employer contribution now caps at THB 875/month per worker. That single line is the same whether you run an EOR or your own Thai limited company. What is not the same is the entity overhead behind it. Here is the full cost comparison, and the decision points the spreadsheet leaves out.
· Thailand guide
Illustration · Bangkok, Thailand
EOR is faster and cheaper at low headcount in Thailand. Forming a Thai limited company typically takes 4 to 8 weeks. Formation typically costs THB 80,000 to 250,000.
Running a Thai entity costs roughly THB 120,000 to 250,000 per month. These are typical market ranges, not law figures. They move with your outsourcing model and payroll complexity.
The crossover typically lands around 6 to 9 employees for common Bangkok salary bands. Social Security is 5% from the employer on both sides. From 1 January 2026 that contribution caps at THB 875/month per worker, because the wage base is now THB 17,500/month. The entity side also carries formation costs and ongoing filing work.
The crossover maths
EOR cost scales with headcount. One fee per employee per month. Entity cost has a fixed overhead. That fixed line and the EOR line cross at around 6 to 9 employees for typical Bangkok salaries.
Teamed charges from $599 per employee per month. A typical Thai entity carries a fixed monthly overhead of THB 120,000 to 250,000 for payroll, bookkeeping, monthly filings, and first-point HR.
The table below uses THB 21,000 as an illustrative THB equivalent of the Teamed fee. This is illustrative. The actual THB amount depends on the exchange rate at the time of invoice. Teamed charges from $599 USD with zero FX mark-up.
All entity cost figures in this table are typical ranges. They cover outsourced payroll, bookkeeping, monthly filings, and HR admin for a small Thai limited company. They are illustrative, not law figures. Actual costs move with your outsourcing model and benefits programme.
Two statutory employer costs sit on both sides of this comparison. The Social Security Fund employer contribution is 5% of wages, matched by the employee at 5%. From 1 January 2026 the monthly wage base used for that calculation is THB 17,500/month, so each side caps at THB 875/month per worker. Thailand has no separate statutory employer pension on top of this. These costs are the same whether you use EOR or your own entity, so they do not move the crossover much. They do add filing work to the entity side.
Run the Crossover Calculator with your own headcount and salary band.
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Calculate the EOR cost
Multiply the Teamed fee (from $599 USD) by your planned Thailand headcount. This is the fixed variable cost. It grows in a straight line as you hire.
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Estimate the entity fixed overhead
Typically THB 120,000 to 250,000 per month for a small Thai company. This covers payroll, bookkeeping, monthly tax and Social Security filings, and first-point HR. It does not grow much until headcount passes twelve.
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Find the crossover headcount
The crossover is where the EOR monthly cost meets the entity monthly overhead. For most Bangkok salary bands, that is around six to nine employees. Use the Crossover Calculator for your own numbers.
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Factor in non-financial triggers
The maths gives you a headcount threshold. Board of Investment incentives, foreign ownership rules, and market-validation reversibility are separate questions that may override the cost crossover in either direction.
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Plan the graduation date
Allow four to eight weeks for entity formation before the first payroll on your own company. Factor in extra time for foreign business licensing and bank account opening. Start the GEMO process while EOR keeps running.
Thailand entity setup: what it actually costs
Forming a Thai private limited company typically costs THB 80,000 to 250,000 all-in. The Department of Business Development registration fee is modest. The gap is professional fees, work permit support, and bank account setup.
Allow roughly 4 to 8 weeks from the formation decision to your first payroll run. Foreign shareholding rules and work permits can extend that. Banking often adds 2 to 4 weeks.
These are typical ranges, not law figures. No law sets what a Thai limited company costs to form. The range reflects real professional services market rates in Bangkok. It moves with foreign ownership structure and how much you outsource.
| Cost item | Typical range | One-off or recurring |
|---|---|---|
| Department of Business Development company registration | THB 5,500 to 15,000 | One-off |
| Memorandum of Association and incorporation drafting | THB 20,000 to 60,000 | One-off |
| Tax ID and VAT registration | THB 0 direct (admin time) | One-off |
| Social Security Office employer registration | THB 0 direct (admin time) | One-off |
| Foreign Business Licence or BOI support (if foreign-owned) | THB 30,000 to 120,000 | One-off |
| Corporate bank account | THB 10,000 to 40,000 (setup costs vary) | One-off plus monthly fees |
| Employment contract templates | THB 25,000 to 80,000 | One-off |
| Work rules and HR policies | THB 30,000 to 90,000 | One-off |
| Registered office address | THB 10,000 to 40,000 per year | Recurring |
| Audit and statutory accounts (first year) | THB 40,000 to 120,000 | Recurring annually |
| Realistic total setup cost | THB 80,000 to 250,000 | Mostly one-off |
Why foreign ownership shapes the timeline
A wholly foreign-owned company in most service sectors needs a Foreign Business Licence, or it structures through a Board of Investment promotion or a majority Thai shareholding. That choice drives both cost and speed. A majority Thai-owned company can register in days at the Department of Business Development. A foreign-majority service company waiting on a Foreign Business Licence can take several months. Add the corporate bank account, which most Thai banks open only after the company is fully registered, and a 4-week incorporation can become a 10 to 14 week wait before first payroll if the sequence is not managed tightly.
Thailand entity ongoing cost: typically THB 120,000 to 250,000 per month
Running a small Thai limited company typically costs THB 120,000 to 250,000 per month. That covers outsourced payroll, bookkeeping, monthly tax and Social Security filings, and first-point HR.
Below 5 employees this fixed overhead dominates the per-head cost. Above 12 employees the overhead amortises and the entity starts to look cheaper.
These figures are typical market ranges for a small Thai company with 1 to 12 employees. They are illustrative, not law figures. Actual costs depend on whether you outsource or hire in-house, and the complexity of your payroll and benefits programme.
| Monthly cost item | Typical range (THB) | What it covers |
|---|---|---|
| Outsourced bookkeeping and monthly accounts | 30,000 to 70,000 | Reconciliation, accruals, monthly management accounts |
| Payroll service (1 to 12 employees) | 15,000 to 45,000 | Withholding tax, Social Security filings, payslips |
| Annual audit and statutory accounts (amortised) | 4,000 to 12,000 | THB 48,000 to 144,000 per year divided by 12 |
| Corporate secretarial and annual filings (amortised) | 3,000 to 8,000 | Department of Business Development filings |
| HR and employment law advisory | 15,000 to 40,000 | Contract reviews, disciplinary support, policy updates |
| Thailand People Ops and first-point HR | 30,000 to 60,000 | Onboarding, leave admin, employee queries |
| Software subscriptions (HRIS, payroll, accounting) | 8,000 to 25,000 | Per-user SaaS tools |
| Insurance (group medical, work injury cover) | 15,000 to 40,000 | Employer liability, group medical cover |
| Total ongoing monthly | 120,000 to 250,000 | 1 to 12 employee company |
Above 12 employees, dedicated in-house HR and finance capacity typically becomes necessary. The cost band widens at that point. Group medical insurance, near-universal in competitive Bangkok hiring, can add THB 1,500 to 4,000 per employee per month and is not included in the overhead estimates above.
The cost nobody quotes: director liability
Thai company directors carry personal duties under the Civil and Commercial Code. These cannot be handed to an adviser. Late tax or Social Security filings attract personal exposure and penalties.
EOR clients do not carry these duties. Teamed holds them as the legal employer.
Most cost comparisons skip the director-liability dimension because it is hard to put a number on. It is worth naming before you decide.
Personal director duties under Thai law
A director of a Thai limited company must act with the care of a careful businessperson, in the interests of the company, under the Civil and Commercial Code. A director who lets the company breach its tax or labour duties can face personal exposure, not just company-level penalties. These are personal duties. They cannot be outsourced to a corporate secretary or an accounting firm.
The compliance rhythm
- Social Security remittance: due by the Social Security Office deadline of the 15th of the following month. Late payment attracts a penalty.
- Monthly withholding tax (PND 1): filed with the Revenue Department by the 7th of the following month, or the 15th for online filing.
- VAT returns: filed monthly where the company is VAT-registered.
- Annual personal income tax: employee returns are due by 31 March (last day of March following the taxable year).
- Audited financial statements: every Thai company must file audited accounts each year, signed off by a licensed auditor.
- Corporate income tax: half-year and annual returns to the Revenue Department.
Each filing is individually manageable. Stacked across a year, they consume real management attention and carry personal director risk on every missed deadline. An EOR carries all of these on its own entity.
Thailand sets the employer Social Security contribution at 5% of wages, matched by the employee. From 1 January 2026 the wage base is THB 17,500/month, so each side caps at THB 875/month per worker. Source: Social Security Office.
When you should stay on EOR
Below 5 employees, during market validation, or on project-based hires, the EOR is the right answer. The crossover is a maths threshold. It is not a strategic verdict.
Reversibility matters in Thailand. Winding down an EOR relationship is straightforward. Closing a Thai limited company runs through Department of Business Development deregistration, a final audit, and tax clearance. It is slow.
- Under 5 Thailand employees at typical Bangkok salaries: EOR is cheaper every month. The entity overhead has nothing to amortise against at that headcount.
- Market validation phase: you are hiring 1 or 2 people to test commercial fit. Entity setup commits capital and management attention before you know whether Thailand will deliver.
- Foreign ownership friction: a foreign-majority service company may need a Foreign Business Licence or a Board of Investment promotion to operate. EOR sidesteps that question while you test the market.
- Project-based hires: 6 to 12 month engagements where the formation cost will not amortise before the project ends.
- High wind-down risk: pilot programmes or holding patterns where adding a local entity creates a slow exit later.
When you should switch to your own entity
Above 8 employees consistently, with a multi-year Thailand plan, or where local presence matters to customers or regulators, your own entity starts winning on cost. It also unlocks things the EOR structure cannot.
Thailand rewards genuine local presence. Government contracting, Board of Investment incentives, and some regulated sectors require a registered Thai company, not EOR employment.
- Sustained headcount above 8 Thailand employees at typical salaries: the entity overhead amortises across enough people that per-head cost falls below the EOR fee.
- Board of Investment incentives: a BOI-promoted Thai company can access tax holidays, foreign ownership relief, and work permit quotas that EOR employment does not provide.
- Government and enterprise procurement: many Thai tenders and large local contracts require a registered Thai company with a physical presence, not an EOR arrangement.
- Regulated sectors: financial services, telecoms, and certain licensed activities require a locally registered and licensed entity.
- Multi-year growth plan: you have line of sight to 10 or more Thailand employees over 24 months. Starting formation early means your entity is ready before the crossover, not after it.
How Teamed's Graduation Model handles the transition
Teamed graduates customers from EOR to their own entity on the same platform. Same Thailand support. Same employment contracts, novated to the new entity. No break in employee tenure or benefits.
Most providers treat graduation as a re-onboarding event. Employees re-sign, sometimes lose continuous service, and lose accrued leave. Teamed treats it as a stage of the employment lifecycle.
The technical mechanic is contract novation. The employment contract transfers from Teamed's partner entity to your new Thai company on a set date. All terms carry across. Salary, Social Security registration, annual leave entitlement, and continuous service date all stay unchanged. The employee sees a different employer name on their payslip. Nothing else moves.
What we do operationally:
- Stand up your Thailand entity through GEMO, typically around 4 to 8 weeks, while EOR keeps running in parallel.
- Register the new entity with the Revenue Department and the Social Security Office.
- Open the entity bank account and the payroll mandate.
- Novate every active employment contract on a single effective date.
- Migrate ongoing benefits, including any group medical cover, without a lapse.
- File final EOR-period withholding and Social Security returns, then open new filings on the entity from the novation date.
- Keep the same People Ops contact through and after the move.
The Graduation Model exists because every other EOR makes this hard. We treat the move as something we help you plan for from the day you hire your first employee through us.
How does Teamed handle Thailand employment for you?
Teamed becomes your legal employer of record in Thailand for from $599 per employee per month, with zero FX mark-up in any currency.
Payroll, benefits, and the full Thailand employment law stack run on one platform.
Real HR and legal experts handle your Thailand hires from the first offer letter through every Social Security remittance and annual audit period. An actual person, not a chatbot or a pooled queue. There is no setup fee and no exit fee. Every employer cost passes through at cost, itemised on every invoice. You see the Social Security employer line at 5%, capped at THB 875/month per worker, and the annual leave accrual for 6 days. Nothing is hidden inside the management fee.
EOR payroll, contractor onboarding, and entity setup all live on one platform. Run the Crossover Calculator to see the month the model flips. Start from the Thailand hiring overview. Key sources: Thai Revenue Department and the Social Security Office.
Frequently asked questions
At what headcount does an EOR stop being cheaper than a Thailand entity?
The crossover typically lands around six to nine Thailand employees at typical Bangkok salaries. Below that, the EOR fee (from $599 per employee per month) is cheaper than the typical entity overhead of THB 120,000 to 250,000 per month. Above it, the entity overhead amortises and per-employee cost falls below the EOR fee. Use the Crossover Calculator to run your own salary band.
How much does it cost to set up a Thai limited company?
Typically THB 80,000 to 250,000 all-in. The Department of Business Development registration fee is modest. The rest is professional fees: incorporation drafting, employment contracts, work rules, bank account setup, and the first year of corporate secretarial and audit costs. A foreign-majority service company may also need a Foreign Business Licence or a Board of Investment promotion, which adds cost and time.
How long does it take to set up a Thailand entity and run the first payroll?
Around four to eight weeks from the formation decision to first payroll for a majority Thai-owned company. A foreign-majority service company waiting on a Foreign Business Licence can take several months. The corporate bank account is the common gating step. Budget two to four weeks for it after registration.
What are the statutory employer costs on both sides of the comparison?
The Social Security Fund employer contribution is 5% of wages, matched by the employee at 5%. From 1 January 2026 the monthly wage base is THB 17,500/month, so each side caps at THB 875/month per worker. Thailand has no separate statutory employer pension on top of this. These costs apply whether you employ via EOR or your own entity.
What is Teamed's Graduation Model for Thailand?
Teamed graduates customers from EOR to their own Thai entity on the same platform. Employment contracts are novated to the new entity on a single date. Salary, Social Security registration, annual leave entitlement, and continuous service date all carry over unchanged. Teamed handles entity formation through GEMO, registers the new entity with the Revenue Department and the Social Security Office, and migrates benefits without a lapse.
The Social Security rise on 1 January 2026 looks small on one payslip. The employer cap moved to THB 875 a worker. The bigger cost of running a Thai entity is everything around that line. Monthly withholding tax, a yearly audit signed by a licensed auditor, and personal director duties that no adviser can take off your hands. The EOR carries all of it on day one. Your entity carries none of it until your registration is complete.
Six to nine Bangkok employees is where the Thailand maths usually flips from EOR to your own entity.
Past that, a Thai entity typically costs THB 80,000 to 250,000 to form. Foreign licensing and banking can add weeks.
When the maths flips, we tell you and move you across. That is the only honest version of this.
