Knowledge about social security that employers should know

What is Social Security?

Social Security is a system that provides a safety net for members who earn an income and contribute to the social security fund. It is responsible for spreading the risks that may arise from events such as illness, childbirth, disability, death, child support, old age, and unemployment. The system ensures that individuals receive medical care and continuous income.

What should a new entrepreneur do?

Although the social security system provides coverage for employees, new entrepreneurs who are considered employers also have the responsibility to contribute to the social security fund according to the law. Employers must submit forms and have the following duties:

1. Employer Registration Form (SPS 1-01)

Employers with at least one employee must register as an employer and register their employees as insured persons within 30 days. Additionally, when hiring new employees, the employer must notify the registration of new employees within 30 days as well. Failure to do so may result in a penalty of imprisonment for up to 6 months, a fine of up to 20,000 Baht, or both imprisonment and a fine.

Documents required to be submitted on the day of registration include:

2. Insured Person Registration Form (SPS 1-03)

For those who have never registered as insured persons before or are using the Insured Person Registration Form (SPS 1-03/1), employers can submit employee information to the Social Security Office in 3 ways as follows:

1. Submit using the Insured Person Registration Form (SPS 1-03), Insured Person Registration Form for those who have previously submitted (SPS 1-03/1), the Notice of Termination of Insured Status (SPS 6-09), or the Notification of Changes in Insured Person's Information (SPS 6-10).

2. Submit the information using electronic media (Diskette).

3. Or submit via the internet (Internet).

Documents required for submission on the day of registration:

1. Complete the Insured Person Registration Form (SPS 1-03).

2. The ID card or any other document that can verify identity.

3. Work permit and a copy of the passport or the work permit and the alien identification card in the case of a foreign insured person.

4. For employees who have previously registered as insured persons, the employer must notify the registration using Insured Person Registration Form (SPS 1-03/1) within 30 days from the employee's start date.

Can an employer apply to be an insured person themselves?

New entrepreneurs may not know that if you are in the status of an employer, you cannot apply to be insured yourself.

3. Submit contributions to the Social Security Fund (can be done in 2 ways):

Employers must deduct the employee’s contribution every time wages are paid. If the wage is below 1,650 Baht, the contribution should be calculated based on 1,650 Baht. If the wage exceeds 15,000 Baht, the contribution is calculated based on the applicable contribution rate. Any fractional contribution amount of 50 Satang or more should be rounded up to the nearest 1 Baht, while amounts less than 50 Satang should be discarded.

Employers must then contribute an amount equal to the total deductions for all employees. They must prepare the documents using SPS 1-10 (Part 1 and Part 2), or input the information onto a diskette or submit via the internet. The contribution must be submitted to the Social Security Office in the relevant area either in person or by mail.

The contributions must be submitted to the Social Security Office in the relevant area (Bangkok or province) either in person or by mail, in cash or by cheque, by the 15th of the following month.

Payments can be made through Krung Thai Bank, Krungsri Bank, or Thanachart Bank at branches located in the province where the business is based.

If an employer fails to submit contributions for employees, the following consequences will occur:

Late or Incomplete Contributions: If the employer misses the contribution deadline or submits an incomplete amount, they will be required to pay an additional 2% per month of the unpaid or missing contribution amount.

Submission Process: The employer must submit the additional payment directly to the Social Security Office in Bangkok or the relevant provincial office.

Incorrect Submission of Forms: If the employer fills out the Contribution Submission Form (SPS 1-10) incorrectly, the authorized officer will instruct the employer to correct the form. If the employer fails to comply, they may face a penalty of imprisonment for up to 1 month, a fine of up to 10,000 Baht, or both imprisonment and a fine.

4. In the case of an employee resigning:

When an employee resigns, the employer must notify the Social Security Office of the employee's termination, including the reason for leaving, by using the Notice of Termination of Insured Status (SPS 6-09). This notification must be submitted by the 15th of the following month.

5. In the case of changes in employee details:

If an employee's details change, such as a change of name, surname, family medical information, or number of children, the employer must notify the Social Security Office by using the Notification of Changes in Insured Person's Information (SPS 6-10). This notification must be submitted by the 15th of the following month.

Similarly, if the employer has changes such as a business name change, change of branch address, relocation of the business, or business closure, the employer must notify the Social Security Office using the Notification of Changes in Employer's Information (SPS 6-15), also by the 15th of the following month.

It can be seen that if an employer fails to comply with the provisions of the Social Security Act, they will be subject to both imprisonment and fines. Moreover, the current social security system has become much more modern, and the processing time is now much shorter. Therefore, new employers should not forget to submit the necessary paperwork correctly and on time.

Compensation Fund

If you have employees, employers should not forget to submit the Compensation Fund Form (GT.25 K) before the end of March. The Compensation Fund is another fund that employers must contribute to for their employees, paid annually by the employer alone. The process is as follows: The Social Security Office will estimate wages or daily wages approximately in December and send Form GT.26 K and Form GT.20 K to the employer.

Pay the amount as estimated by the Social Security Office and fill it out in Form GT.26 K before the end of January.

The employer must report the actual wages paid for the previous year on Form GT.20 K before the end of February.

After submitting the forms, the employer will receive the Compensation Fund Assessment Form (GT.25 K), indicating if additional compensation payments are required, which must be completed before the end of March.

For those who are just starting a business and have begun hiring employees, you will have the responsibility to register your employees as insured persons with the Social Security Fund. The employer will contribute to the social security fund along with the deduction from the employees' salaries every month. Additionally, there is the Compensation Fund, another fund that the employer must contribute to annually, typically at the beginning of each year. This February, it's time to submit the report of the actual wages paid to the Social Security Office.

Summary:

What Employers Need to Know

Employees who are registered as workers under the law are entitled to benefits from two funds:

1. Social Security Fund

This fund is used for situations unrelated to work, such as illness, dental treatment, unemployment, and retirement. The employer must register both the employer and employee as insured persons with the Social Security Fund within 30 days of hiring the employee. After registration, the employer must deduct both the employer's and employee's contributions at a rate of 5% of the wages (with a maximum salary base of 15,000 Baht; if the salary is higher, only 15,000 Baht is used for the calculation, resulting in a maximum contribution of 750 Baht). The contributions must be submitted using Form SPS 1-10 (Part 1 and Part 2) to the Social Security Office, either in person or online, and payments should be made at the designated banks by the 15th of the following month.

2. Compensation Fund

This fund is for cases where an employee is injured, becomes disabled, or dies due to work-related causes. The employer is responsible for registering within 30 days of hiring the employee. Unlike the Social Security Fund, the employer will pay the contributions solely to the Social Security Office, and these contributions are made annually.

Differences between the Social Security Fund and the Compensation Fund: How much must an employer contribute to the Compensation Fund?

Employers make annual contributions to the Compensation Fund, split into two payments:

First payment: Pay according to Form GT.26 K, based on the estimate provided by the Social Security Office.

Second payment: Pay according to the assessment notice Form GT.25 K, which is calculated based on the figures submitted in Form GT.20 K in February. The calculation method is as follows:
** (Annual wages up to 20,000 Baht per person per month * Contribution rate between 0.2%-1.0% depending on the business type) - Amount already paid based on the same year’s Form GT.25 K.
** Note: The maximum annual wage for each employee that can be calculated for the contribution is 240,000 Baht per year (20,000 Baht per month).

How to Pay the Compensation Fund

Once there is at least one employee, the employer must pay the compensation within 30 days in the first year. For subsequent years, there are two payment rounds within the first three months of the year:

January: The first payment is based on the estimated wages provided by the Social Security Office.

February: The employer reports the actual wages paid, including any changes such as hiring more employees or salary adjustments. This data will be compared with the initial estimate. If the actual wages are higher than the estimated amount, the employer will receive a refund for the excess.

If the employer fails to make the payment on time or does not pay the full amount, a 3% monthly fine on the unpaid compensation amount will be imposed.