Thailand to raise minimum wage and launch new tax breaks in 2025

Thailand’s Cabinet has approved new minimum wage increases effective 1 January 2025, as part of its broader economic stimulus plan, which also includes tax breaks to encourage spending and the continuation of a government handout scheme.

However, the proposed nationwide daily minimum wage of 400 baht (US$11.69) has been selectively implemented. Only five areas—Phuket, Chachoengsao, Chon Buri, Rayong, and Koh Samui—will see the full increase. In other provinces, wages will rise by an average of 2%, ranging between 337 and 380 baht (US$9.85 to US$11.10) depending on location, up from the current range of 330 to 370 baht (US$9.64 to US$10.81).

The wage adjustments were determined by the tripartite wage committee, which sought to balance economic realities with the government’s pledge. While organisations widely opposed a uniform 400-baht wage, citing regional economic disparities, the compromise has received conditional support from the private sector.

Poj Aramwattananont, First Vice Chairman of the Thai Chamber of Commerce (TCC) and the Board of Trade of Thailand, stated that the approved increases are appropriate, given that wage levels had remained stagnant for over a year. He emphasised that the adjustments align with economic growth in industrial and service-driven regions but urged the government to provide targeted support for small-scale businesses, especially in the agricultural sector.

“The increase may slightly impact the economy, but the government and state agencies must introduce measures to manage and mitigate any effects,” Poj said, adding that these measures should ensure business continuity across the nation.

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The government’s selection of areas eligible for the 400-baht reflects their stronger economic performance and capacity to absorb higher labour costs. For example, Chiang Mai’s Muang district and Hat Yai district will see minimum wages rise to 380 baht (US$11.10), while employees in Bangkok and six neighbouring provinces will receive a minimum of 373 baht (US$10.90).

In the remaining 67 provinces, a modest 2% increase will be applied to existing wage levels.

Addressing the concerns about inflation, Wittayakorn Maneenetr, Director-General of the Department of Internal Trade, said the department will monitor the prices of essential goods and consumer products. Discussions with manufacturers and operators will assess the impact of higher wages on production costs, particularly for goods reliant on skilled labour, reported Bangkok Post.