New Minimum Wage Calculation Formula in the Pipeline in Thailand

The tripartite wage committee in Thailand is reviewing the factors involved in calculating the daily minimum wage, in response to the government’s proposal for a second increase in 2024, as announced by the Employers’ Confederation of Thai Trade and Industry (EconThai) and reported by Nation Thailand.

This would be the second wage hike this year, following a recent average increase which came into effect on January 1 at 2.37%, equivalent to 2-16 baht per day.

Two provincial subcommittees were entrusted with determining the updated criteria for calculating the daily minimum wage in 10 tourism provinces for the time being.

Approval was given by the committee to the updated criteria for determining the daily minimum wages at its second meeting of 2024.

The new factors encompass geographical areas and business types, which will be taken into account alongside the prevailing economic conditions and inflation rates.

The provincial subcommittees will assess the existing minimum wages in their respective provinces, considering the cost of living, essential expenditures, and various economic factors.

Additionally, they will evaluate the payment capacity of employers and SMEs in the provinces.

Subsequently, the subcommittees will determine the appropriate wage increases for the provinces and present their findings to the complete wage committee by March 26, 2024.

This marks the first instance where wage increments will be influenced by specific areas and business types.

The wage raises for the 10 provinces are slated for implementation by April 2024 and discussions regarding wage increases for other provinces will follow once the initial 10 provinces are finalized.

Additional Information:

• Typically, wage calculations consider factors such as inflation, GDP, and labor productivity. 
• After the 2.37% increase, Phuket currently boasts the highest daily minimum wage of 370 baht, while Yala, Pattani, and Narathiwat in the southern region have the lowest at 330 baht. 
• The tripartite wage committee comprises government representatives, employers, and employees.
• In 2023, inflation increased by 1.23%, staying within the Thailand Ministry of Commerce‘s target range. 
• The National Economic and Social Development Council’s GDP growth targets have been revisited to 1.9% for 2023 and 2.7% for 2024.