Severance Pay in 2026: Labor Law Check - How Much Compensation Should You Receive if Laid Off?

Severance Pay in 2026 2569 GMT+7 (Thai year 2569 = 2026 CE) 2569 GMT+7 (Thai year 2569 = 2026 CE) Severance Pay isan important rightthat employees should know when laid off without serious misconduct. Employers are obligated to pay severance according to labor law. Severance payment depends on “ length of service ” and “ final wage rate ”. Many people are still confused about how severance pay is calculated and whether it applies in every case. Thairath Online summarizes it clearly in one place.

Understanding “Severance Pay” - What is it?

Severance pay is the money an employer must pay to an employee when laid off without serious misconduct under the Labor Protection Act. It is calculated based on the employee’s “final wage rate” and “length of service.”

When do you receive severance pay in 2026?

Employees havethe right to receiveseverance pay in the following cases:

• laid off by the employer (not resigned)
• have worked at least 120 days or more
• have not committed serious misconduct such as fraud or major rule violations

Cases where severance is not paid include:

• resignation by the employee
• termination due to serious misconduct

If the employer relocates the business premises,

and the move affects the employee’s or their family’s life, the law provides protection as follows:

1. Must notify in advance ( inform the employee at least 30 days ahead)

• If the employee does not move with the employer, they can resign
• and havethe right to receivespecial severance pay of no less than 50% of the normal severance amount.

2. If there is no advance notice (sudden notification)

• the employer must pay severance in lieu of notice (compensation) equal to 30 days’ wages.

How to calculate severance pay in 2026? Check easily by length of service.

Being laid off is not the end if we understandthe rightsprotected by law. Employers cannot terminate without paying severance (except for serious misconduct). Severance payment is based on“length of service”as follows:

• 120 days but less than 1 year: 30 days’ pay
• 1 year but less than 3 years: 90 days’ pay
• 3 years but less than 6 years: 180 days’ pay
• 6 years but less than 10 years: 240 days’ pay
• 10 years but less than 20 years: 300 days’ pay
• 20 years or more: 400 days’ pay

How to calculate severance pay if laid off in 2026

The number of severance days depends on the length of service. For example, if you have worked for a certain number of years, you receivethe rights stipulatedby law. Calculating severance pay is simple using the “ latest salary ” as the basis.

Calculation formula:

Divide the latest salary by 30 = daily wage
Then multiply daily wage by the number of severance days based on length of service.

Example calculation:

• Assuming latest salary is 30,000 baht
• Daily wage = 30,000 ÷ 30 = 1,000 baht

If worked 3 years (entitled to 180 days’ severance)

• Severance = 1,000 × 180 = 180,000 baht

Rights from Social Security (in case of unemployment)

After being laid off, besides severance from the employer, you can also receive assistance from Social Security.The key condition isto register as unemployed with the Department of Employment within 30 days from the unemployment date.

The rights entitled include

• unemployment benefits equal to 50% of wages
• calculated on a salary base not exceeding 15,000 baht
• and payable for no more than 180 days per year.

Example:

• Actual salary 20,000 baht
• but Social Security calculates up to 15,000 baht maximum.

When and where is severance pay paid?

According to labor law practice, the employer must pay severance immediately on the layoff date or at the latest by the employment end date. Usually, payment is transferred to the employee’s bank account or paid together with the final salary.

Is severance pay in 2026 taxable?

Severance pay is considered “income” under tax law, so it is advised to check specific details in each case.

• Some portions may be tax-exempt according to Revenue Department conditions.
• Amounts exceeding the exemption limit may be subject to personal income tax calculation.

However, severance pay in 2026 isa rightthat employees should know and verify properly under the law. The amount depends on length of service and must be based on the latest wage. If laid off, check your rights thoroughly to avoid losing entitled benefits.Source of information:Department of Labor