What Is Form L.Y.01? A Withholding Tax Deduction Form That Helps Salaried Employees Keep More Money

In 2026, Thailand is experiencing stagflation—a condition where economic growth slows while inflation rises sharply—mainly due to crude oil prices stabilizing at a high level of 88-100 US dollars per barrel. This directly affects the cost of living and consumer goods prices, making tight finances a reality for nearly all salaried workers.

One often overlooked key strategy is managing "cash flow." From a tax planning perspective, this can be done using a form called L.Y.01, which is crucial for helping individuals have more money left in their pockets each month without waiting for a tax refund early the following year.

Introducing Form L.Y.01: A tool to "stop" over-withholding of taxes.

Form L.Y.01, or the "Notification of Tax Deduction Items," is a form prescribed by the Revenue Department for employees to report their personal tax deduction entitlements to their HR department or employer.

Typically, employers must withhold tax monthly from salaries. If you do not submit Form L.Y.01, the employer will calculate tax considering only basic entitlements, such as the 60,000 baht personal allowance and social security contributions. This results in excessive tax withholding, reducing your net salary more than necessary.

Filing Form L.Y.01 acts as a "calibration" to align the amount of tax withheld with your actual annual tax burden as closely as possible. This increases liquidity, giving you more money to spend, while reducing the risk and hassle of claiming a refund and delays in receiving the money early the next year.

How much difference does filing vs. not filing Form L.Y.01 make to your cash flow?

A comparison table showing the benefits of submitting Form L.Y.01 for the 2026 tax year.

Note: Assumes utilization of deductions such as life insurance, retirement funds, and mortgage interest.

For a monthly salary of 100,000 baht, updating information via Form L.Y.01 could increase disposable income by up to 7,550 baht per month, which can immediately help manage higher fuel or product costs without waiting until 2027.

Key highlights for 2026: TISA accounts and new tax deduction measures.

In 2026, the government introduced a new tax measure called the "Thailand Individual Savings Account" (TISA), an innovation salaried workers must declare on Form L.Y.01 to maximize benefits.

• Increased deduction limit: raised from 500,000 baht to a maximum of 800,000 baht per year (including retirement-related funds).
• Progressive Deduction formula: For annual income up to 1.5 million baht, investing 100,000 baht allows a deduction of up to 130,000 baht (1.3 times the amount).
• For income exceeding 1.5 million baht per year, only 0.7 times the actual purchase amount is deductible. Steps to correctly and transparently complete Form L.Y.01.

In principle, employees should complete Form L.Y.01 by January each year, but they can submit updated versions to HR anytime significant changes in deductions occur, with key details as follows.

• Basic entitlements group: specify family status (single/married), child allowances (30,000 or 60,000 baht per child depending on birth year), and parental support (parents aged 60+, income not exceeding 30,000 baht per year).
• Insurance and savings group: specify life insurance premiums (up to 100,000 baht), health insurance (up to 25,000 baht), and various funds such as RMF, Thai ESG, and TISA.
• Economic stimulus group: specify home loan interest (up to 100,000 baht), and solar panel installation costs (up to 200,000 baht).

Cautions and ethics in submitting information.

Although Form L.Y.01 helps increase cash on hand, accuracy is paramount.

• Integrity: If you claim excessive deductions and underpay taxes, you will incur a "surtax" penalty of 1.5% per month on the outstanding amount when filing your annual tax return.
• Updating information: If changes occur during the year, such as policy cancellations or fund sales, you should submit a new Form L.Y.01 to promptly adjust the withholding amount correctly.

Using Form L.Y.01 demonstrates financial literacy amid a sluggish economy. Employees should not let excess cash be held by the Revenue Department without return. Tax planning from the start of the year builds a strong financial shield and maintains household stability amid stagflation challenges.

Click to download the Notification of Tax Deduction Items form (Form L.Y.01): https://bit.ly/2I91kOP

Source: Revenue Department, itax

Read personal finance and financial planning news with Thairath Money to help you "Achieve Good Finance, Good Life"https://www.thairath.co.th/money/personal_finance

Follow the Facebook page: Thairath Money at this linkhttps://www.facebook.com/ThairathMoney