Withholding 3%: what the client actually has to do
Who withholds, who does not, which form to file, and the document your freelancer will ask for
2 min read
This causes more confusion than anything else in freelance hiring, and it usually ends in an argument about a transfer that does not match the quote.
Who has to withhold
A registered company paying an individual for services must withhold 3% at source.
An individual paying an individual does not. A shop owner who has not incorporated, hiring a freelancer for a logo, pays the full amount.
The arithmetic
A ฿20,000 fee, 3% withheld, is ฿600.
- Transfer to the freelancer: ฿19,400
- Remit to the Revenue Department: ฿600
That ฿600 is not an extra cost to you. It is part of the ฿20,000 you were already paying — this is the point people get wrong most often.
If the price includes VAT, withhold 3% of the pre-VAT amount, not the total.
What you file
Form PND.3 for payments to individuals, filed by the 7th of the following month — the 15th if you file online.
Late filing carries a penalty, and it falls on the payer, not the freelancer.
The document you must issue
A withholding tax certificate (form 50 tawi), every time you withhold.
The freelancer needs it at annual filing to claim the credit. If you don't issue one, they effectively pay that tax twice — and this is the single thing freelancers complain about most.
Make it painless
Put it in the quote from the start: "฿20,000, less 3% withholding tax, ฿19,400 transferred." Both sides see the same numbers from day one and there is nothing to argue about on payment day.
A general overview, not tax advice. Confirm the details with your accountant.
Other rates you will meet
3% covers general services and contracted work, but not everything:
- Rent — 5%
- Advertising — 2%
- Transport — 1%
- Professional services such as doctors, lawyers and architects — 3%
If you hire one freelancer for design and photography on the same invoice, it is the same rate. No need to split it.
Paying a company instead of a person
If your freelancer has incorporated and invoices as a company, the rate stays 3% — but you file form PND.53, not PND.3.
The easy tell is the tax ID they give you: corporate numbers start with 0.
If you forget to withhold
If you paid the full amount without withholding, you still owe that tax — and it now comes out of your own pocket.
The way to prevent it is a step in your payment process: every invoice from an individual goes through the withholding calculation before transfer is approved.