Severance Pay (Kha Chot Choei): Section 118 of the Labour Protection Act

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Severance pay (ค่าชดเชย, kha chot choei, also spelled kha chod choey) is the lump sum an employer must pay under Section 118 of the Labour Protection Act B.E. 2541 when it terminates an employee who has completed at least 120 days of continuous service, calculated on the last wage rate and scaled from 30 to 400 days’ wages by length of service. It is owed on top of notice pay and unused leave, it does not depend on the employer’s reasons unless Section 119 applies, and it is usually the largest single item in a termination. Foreign employees are entitled to it on exactly the same terms as Thai employees.

The Section 118 scale and its exceptions

Severance is calculated on the last wage rate, meaning the final regular wage plus any fixed allowances paid as wages, and for monthly staff each day is one thirtieth of the monthly figure. The 400-day tier was added by the 2019 amendment. Retirement is deemed a termination, so an employee who retires at the employer’s set age is paid on the same scale.

Nothing is due where the employee resigns, where the employer proves a Section 119 cause, or where a written fixed-term contract for a genuine special project, seasonal or temporary job of two years or less simply runs out. Relocation of the workplace and redundancy caused by new technology carry additional special severance.

Claiming it in practice

When and how it is paid. Severance is due on the termination date and, like final wages, must be paid within three days; unpaid severance carries interest of 15% per year. If the employer refuses, the employee files a complaint with the labour inspector at the provincial Labour Protection and Welfare office, who can order payment, or sues directly in the Labour Court, where no court fee is charged.

Common mistakes. Signing a resignation letter drafted by the employer, which turns a termination into a resignation with no severance; accepting a contract clause that says no severance is payable; and confusing severance with pay in lieu of notice, which is a separate amount under Section 17. The employee rights guide covers the full set of entitlements on leaving a job.

Can severance be waived?

Not in advance. A clause signed while the employment continues, saying that no severance is payable or that a payment is in full satisfaction of all claims, is void under Section 150 of the ประมวลกฎหมายแพ่งและพาณิชย์ because the Labour Protection Act protects public order.

After the employment has ended, the position changes. A 2026 ศาลฎีกา decision, discussed in the guide on severance pay waivers, upheld a release signed on the last day by a senior employee who knew the statutory amounts, received itemised payments and gave up further claims in exchange for real concessions. Such a document is a compromise under Sections 850 and 852 of the Code and binds the employee. The dividing line is the date: signed freely on or after the last day, it can stand; signed before, it cannot.

คำถามที่พบบ่อย

ดูเพิ่มเติม: termination of employment, notice period and pay in lieu, Labour Protection Act, void and voidable juristic acts, and the guides on waiving severance pay และ สิทธิของลูกจ้างในประเทศไทย.