What should a Training Cost Repayment Agreement include under Thai law?

1. Definitions and Interpretation
2. The Training
3. Training Costs
4. Retention Period and Freedom to Resign
5. Repayment
6. When No Repayment is Due
7. Payment of the Repayable Amount
8. General

• No stamp duty is payable on this Agreement. A training cost agreement is not an instrument listed in the Stamp Duty Schedule of the Thai Revenue Code.
• If, after the Employee leaves, the Parties sign a separate acknowledgement of the debt or an instalment plan, that document may carry stamp duty as an acknowledgement of a loan (Instrument 5). Ask your accountant before signing it.

• Thai courts generally enforce training repayment agreements, but only to the extent that they are fair. The amount should be tied to real costs, and it should reduce for the time the Employee has already worked. This form does both: only costs with receipts count (Clause 3.3), and the amount falls month by month over the Retention Period (Clause 5.2).
• A term that restricts a person's freedom to work is enforceable only as far as it is fair and reasonable (Unfair Contract Terms Act section 5), and a court may limit an employment term that gives the Employer an excessive advantage (Labour Protection Act section 14/1). A Retention Period of … months should be in proportion to the length and cost of the Training. As a rough guide, many employers use a period of one to two times the length of the Training, and rarely more than three years.
• Do not charge for training that the Employee needs to do the current job to the standard expected on hiring, or for training that the law requires the Employer to provide (Clause 3.2).
• The extra agreed sum of …% (Clause 5.4) is a penalty under the Civil and Commercial Code. A court may reduce it if it is excessive (section 383). Many employers leave it out and rely on the repayment alone.

• If the Employer dismisses the Employee for any reason other than a ground for termination without severance, or makes the Employee redundant, nothing is repayable (Clause 6.1). Asking for repayment in those cases is likely to be treated as unfair.
• If the Employer does not use the Training within 60 days and the Employee has pointed this out in writing, nothing is repayable (Clause 6.2).

• Send the written calculation within 15 days after the last day (Clause 7.1).
• The Labour Protection Act allows deductions from wages only for the purposes listed in section 76, and a training repayment is not clearly one of them. Ask the Employee to pay the amount separately rather than deducting it from wages. If a deduction is made at all, it needs a specific written consent from the Employee (section 77), given at the time of the deduction and not in advance (Clause 7.3).
• Never deduct the repayment from severance pay or pay in lieu of notice. Pay those in full; late payment of them carries interest of 15% per year (section 9).

• Training paid by the Employer for the purposes of its business is generally not taxable income of the Employee. Pay the provider directly where possible and keep the receipts.
• The Employer may be able to deduct training expenses for corporate income tax, sometimes at an enhanced rate for approved training. Ask your accountant.

• Sign before the Training starts, and give the Employee a complete copy with Schedule 1.
• Keep the provider's invoices, receipts and the Employee's training report. Without receipts, the cost cannot be recovered (Clause 3.3).
• If the Employee does not read English well, explain this Agreement or provide a Thai translation (Clause 8.8).

Compiled from the notes that accompany the English contract templates on this site, published by Phuwara Krobtaku (ภูวรา ครอบตะคุ), Thai attorney-at-law, licence no. 477/2558. The short answer and summary at the top of this page are put together by the site from the template's clause headings and notes. Statutes are quoted only in the official Thai text: Thai is the only official language of Thai legislation, and an unofficial translation can mislead. Article registry OKC-03836F. If you reuse this content, please credit the author and link to the original.