Do the commissions we received need to be paid for tax?

There have been many questions about whether commission-paid jobs need to be taxed. Therefore, let’s find the answer for the question. Also, there is an explanation about how to calculate the net income to pay tax.

Salary workers who receive additional commissions or those who earn commission income, whether they are sales, insurance salesmen, or medical representatives, these occupations are not eligible for tax exemption. According to the constitution, taxes are obligations of citizens to pay to the state, and since commissions fall into the category of income under Article 40 (2), these people are required to pay taxes by filing a year-end form.

How much income must be filed for taxes?

Individuals or salary people are subject to personal income tax which is based on the minimum income and status as follows:

Single

Minimum annual salary of 120,000 baht
Other types of income 40 (1) – 40 (6) Minimum annual income 60,000 baht

Marriage

Minimum annual salary of 220,000 baht
Other types of income at least of 120,000 baht

What is an Assessable Income Under Section 40 (1) (2)?

Assessable Income Under Section 40 (1) is income due to the employment of workers such as salaries, allowances, bonuses, etc.

Assessable Income Under Section 40 (2) is money in the form of general employment remuneration. There is no relationship between bosses and subordinate people and does not considered as an independent occupation, such as

Commissions and brokerage fees, such as salesmen, life insurance agents, direct salesmen, and network businessmen.
Repayment of news anchors, programmers, MCs according to various events.
Product review fees on various social media
Consultation fees for non-independent professionals of type 6
The Wages of intellectual property production, and the employer will ultimately own the right to the property.
Or money, property, or other benefits from the employer.

How to calculate expenses before calculating taxes

If you pay taxes in the form of individuals, you have to bring an entire year’s income from 1 March – 31 December then deduct the “expenses or allowance” first to calculate the net income for taxation. The Revenue Department has the condition that the income tax deduction is 50% but not more than 100,000 baht, including two types of income from 40 (1) and 40 (2).

(Type 1 income + Type 2 income) x 50% = Cost but not more than 100,000 baht

Example

Mr. A’s salary and commission income is 600,000 baht, 50% of which is equivalent to 300,000 baht. However, according to the conditions, the 50% deduction must not exceed 100,000 baht, which means that Mr. A can deduct only 100,000 baht as determined by the Department of Revenue even though the actual cost is much more than that. Therefore, a net total income of Mr.A is 500,000 baht.

After that, the remaining amount will be deducted from various deductions such as personal allowance, social security, and savings insurance. Therefore, Mr. A will have a net income of 350,000 baht and this will be calculated according to progressive tax.

Regardless of occupation or income channels, if you know that your income is subject to taxation, you should pay your taxes legally so as not to face tax problems later on.