Personal income tax can seem complicated, especially for someone filing for the first time. This guide outlines four steps for understanding a basic calculation and planning for tax. Tax laws and deduction limits can change, so verify current rules with Thailand’s Revenue Department before making decisions or filing.
1. Classify your income
Start by identifying the kinds of income you received. Different income categories may have different calculation rules and tax benefits. Common income categories include:
- Employment income: salary, wages, bonuses, and other work benefits.
- Business income: net profit from operating a business.
- Trading income: profit from selling goods or services.
- Rental income: rent from property or other assets.
- Royalties: income from allowing others to use work such as books, music, or software.
- Interest: interest from deposits or bond investments.
- Dividends: distributions from share investments.
- Professional income: fees from professions such as medicine or law.
- Other income: income that does not fit the categories above, such as prizes or general contract work.
Classifying income correctly helps determine which rules apply to the calculation.
2. Deduct expenses
After classifying income, identify the expenses that may be deducted for each type. For employment income, this guide gives a general expense deduction of 50%, capped at 100,000 baht. Other income types may have different rules, such as expenses related to a business or selling goods.
The calculation shown is:
Net income = total income − expenses
3. Apply allowances
Eligible allowances can reduce the amount used to calculate tax. Examples include a personal allowance of 30,000 baht, social-security contributions subject to applicable rules, and possible deductions for SSF and RMF investments and insurance premiums. Conditions and limits vary by deduction.
Using eligible allowances correctly may reduce tax payable. Check current eligibility, holding conditions, and limits before relying on a deduction.
4. Calculate tax using progressive brackets
After expenses and allowances, apply the progressive rates below to net taxable income. Each portion of income falls into a different band. The rates and thresholds below may have changed; confirm current rules with the Revenue Department.
- Net income of 0–150,000 baht: exempt.
- 150,001–300,000 baht: 5%.
- 300,001–500,000 baht: 10%.
- 500,001–750,000 baht: 15%.
- 750,001–1,000,000 baht: 20%.
- 1,000,001–2,000,000 baht: 25%.
- 2,000,001–5,000,000 baht: 30%.
- More than 5,000,000 baht: 35%.
Example from the source
For net taxable income of 350,000 baht, the calculation is:
- The first 150,000 baht: exempt.
- The next 150,000 baht, from 150,001 to 300,000: 5% = 7,500 baht.
- The next 50,000 baht, from 300,001 to 350,000: 10% = 5,000 baht.
- Total tax in this example: 12,500 baht.
This example uses the rates above and may not reflect current rules or every taxpayer’s circumstances. Confirm the applicable rules and your personal circumstances with the Revenue Department or a qualified tax professional.
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