The payroll industry in Thailand has been affected by several macroeconomic changes of late.
Apart from the recent local data compliance regulations in Thailand and elsewhere that have influenced how firms process data, there has also been an accelerated adoption from spreadsheets to a digitized payroll to ensure a consistent employee experience.
The sudden shift from in-office to a hybrid environment due to the pandemic has also affected several aspects of payroll, including payroll processing, answering payroll queries, and so on.
If you are a payroll specialist from Thailand reading this, here are some of the trends to watch out for:
Migration to cloud-based technologies
According to the 2021 Payroll Complexity Index, 40% of companies still use spreadsheets, and 18% continue to use high-risk and largely non-compliant manual and paper-based activities as part of their payroll processing.
But this is changing.
According to a survey by Alibaba across Asia-Pacific, a vast majority (85%) of businesses feel that cloud-native solutions have helped them cope with the impact of the pandemic and 69% reported that a hybrid cloud approach supported them in disaster recovery and business continuity planning.
This is because organizations have realized the benefits of having a centralized repository of information that HR teams and employees can access anytime and anywhere.
For firms in Thailand, having the entire payroll data on the cloud allows employees to access their payroll information, including pay slips, tax information, leave status, etc., in a centralized hub. Managers can also directly approve leaves on the system, and the information is continuously updated in real time, improving the system’s accuracy.
Another key benefit of a cloud-based payroll program is scalability. A cloud-based payroll system should easily weather scalability challenges.
In summary, a cloud-based payroll system can help firms overcome payroll processing and management challenges, such as miscalculating payrolls, tax-related errors, and overdue deadlines, to make organizations future-proof.
The emergence of mobile-first systems
Like the consumer experience they are already used to, employees now expect a similar employee experience where they can access all payroll-related information via their mobile phones.
A mobile app frees managers from logging into their desktop/laptop each time for every approval and gives employees access to their personal information at their fingertips.
The pandemic has also fueled a rise in the gig economy, with several contract workers joining the workforce. In their case, a mobile app is crucial in helping them view pay slips, fill in their shift/overtime details, and so on.
Mobile apps are also expected to be instrumental in personalizing the employee experience and creating a better employer brand.
Increasing use of AI in Payroll
The future of work is paved by artificial intelligence-powered technologies like Face ID and chatbots that make it seamless for HR teams to track timesheets and collect data on various parameters.
When it comes to payroll, chatbots or conversational AI allows employees to strike up a dialogue and swiftly find answers to their queries.
For instance, instead of asking HR to pull out records and answer questions about payroll or unused leave, employees can get instant answers for commonly asked queries from a chatbot.
Besides answering payroll-related questions, a chatbot can also provide employees with personal documents that they might need without having to rope in the HR team.
On-demand pay is a payroll service that allows employees to access some or all of their wages.
Rather than waiting to receive a bi-weekly or monthly paycheck with wages earned from the previous payroll period, employees using on-demand pay can have more control over their finances — choosing when to access their earned income before the next payroll cycle.
With the rise in the gig workforce, on-demand pay is increasingly becoming common, especially in countries such as Thailand, where super apps such as Gojek, Grab, and others are employing tens of thousands of workers that cater to the burgeoning middle class.
Even amongst the salaried class, on-demand pay is increasingly becoming a feature that helps them tide over unexpected financial situations.
Firms leveraging features such as on-demand pay with their payroll management software can have an edge in employee experience over their peers.
Use of HR analytics to make business decisions
Data is the new oil.
Although using data in HR to take strategic decisions is familiar, it will become a necessary part of running the people department in the future.
When the payroll team is well-versed in data, it can also help the HR leaders make crucial decisions related to expansion from a payroll point of view. The former can help provide accurate figures for employee expenditure, labour costs, and so on, thus helping HR teams make the right decisions affecting a company’s bottom line.
Enterprise-grade data security becoming mainstream
Payroll systems in the Philippines also must be Data Privacy Act compliant. Modern payroll systems make it easier to comply with emerging regulations through automatic updates and robust security features like dual authentication on top of the traditional security questions to keep your data safe.
Such security features automatically encrypt any sensitive information you enter in the system, using the highest cybersecurity standards possible.
Need for payroll softwares that complies with local regulations
According to law, employers in Thailand have several obligations to their employees and must make income tax and social security contributions on their behalf via their payroll program. These obligations include and are not limited to the following:
In Thailand, the tax year spans from 1 January to 31 December. Employers must submit their monthly withholding tax report (WHT) per regulations. The deadline is the 7th (for manual submission) or the 15th of the following month (for online submission).
The penalty for late submission of WHT is as follows:
100 baht for the first seven days
200 baht from day eight onwards
An additional penalty of 1.5% of the due amount henceforth
There are a couple of mandatory statutory contributions for companies operating from Thailand:
Employers can choose to register in a provident fund offered by Thai financial institutions or opt for the government’s employee welfare fund overseen by the Department of Labour Protection and Welfare.
Workmen Compensation (WCF)
In addition to social security contributions, the Workmen’s Compensation Act requires employers to pay an annual contribution at the rate of 0.2% – 1% of their employees’ yearly wage, depending on the risk levels of the business.
This will be used to pay workers in case of work-related injury, sickness, or death.
Given the changing technological landscape and demands of employees, payroll is set to change in the coming few years.
An advanced payroll system is necessary for any organization that plans to invest in employee experience and productivity. However, besides focusing on the technology aspect, the usability and flexibility of the platform need to be considered.
PeopleStrong’s local legal experts will guide you through Thailand’s complicated labour and tax requirements so you can run payroll without hassle.
The robust platform will help you create a smarter workplace through intelligent payroll management. If you are looking to upgrade your payroll process or grappling with building enhanced transparency around a distributed workforce and operations, PeopleStrong Payroll could be the solution you’re looking for.
Find out how you can enhance your digital HR transformation journey with PeopleStrong