If Your Make 3,000 Baht a Day, How Much Do You Have to Pay in Taxes? How to Calculate Taxes for Small Restaurants

During this pandemic, many people were forced to change their occupations and work extra jobs like making home deliveries or selling food online. What beginners, or even long-established restaurants, can’t forget and need a good plan for is taxes. A lot of restaurants never file their taxes, because they think it’s okay since they’re just a small restaurant with only a little over a thousand baht in sales per day.

However, that’s a hundred thousand baht a month and a million baht a year. If you have income and don’t pay taxes, there could be repercussions.  For example, the Revenue Department could collect back taxes. So, even small low-income restaurants need to file their taxes. It’s much better to do things right from the start.

The next question is: How much do you have to pay in t es? Let’s take a look at the taxes you have to pay if your restaurant’s daily income is 3,000 baht.

Basic Taxes You Need to Know

The main taxes anyone with income needs to consider are personal income taxes and value-added taxes. This includes restaurateurs, depending on how high your annual net income is.

• Personal income taxes need to be paid if your annual net income is higher than 150,000 baht. How much you have to pay depends on your tax bracket.
• Value-added taxes or VAT 7% need to be paid if your annual net income is higher than 1,800,000 baht.

Easy Tax Terms

Furthermore, you should understand words like income, net income, expenses and write-offs, so you can accurately calculate your tax payments.

• Income means all of the income or sales. (This is not profit, so don’t deduct any expenses.)
• Net income means income – expenses – write-offs = net income.
• Expenses are things that are deductible under the law. The law gives you two ways to deduct your expenses:  deducting a standard 60% or deducting based on real expenses. If you want to deduct based on real expenses, don’t forget to also keep evidence of the expenses for filing your taxes.
• Write-offs are tax benefits that help reduce your calculated taxes.  For example, you can write off personal expenses, social security expenses, life insurance expenses, interest from buying your first house, etc.

What is net income?

Income – Expenses – Write-offs = Net Income

To find out how much you have to pay taxes, look at the income/year.

As we mentioned above, you have to pay personal income taxes when your annual net income is higher than 150,000 baht or you have to pay value-added taxes, or VAT 7%, when your annual net income is higher than 1,800,000 baht. So, the first thing you need to know is your restaurant’s annual net income.

• Daily Sales of 3,000 Baht

Monthly Sales of 3,000 baht x 30 days = 90,000 baht/month

Therefore, the annual sales are 90,000 baht x 12 months = 1,080,000 baht/year.

Use the annual sales total, which we’ll call “income”, to calculate the “net income”. Income of 1,080,000 baht/year (- 60% or 648,000 baht of expenses) (-60,000 baht of personal expense write-offs) (- 9,000 baht of Social Security expense write-offs) = Annual Net Income of 363,000 baht

Therefore, you have to pay personal income taxes because your annual net income is higher than 150,000 baht. You’ll have to pay based on your tax bracket, but you don’t have to pay value-added taxes, or taxes VAT 7%, because your annual net income is lower than 1,800,000 baht.

What are the tax brackets?

According to the tax brackets, the higher the income, the higher the tax rate. What you have to do is check which tax bracket you’re in and that’s the rate you’ll have to pay.

• Bracket 1. Net Income Not Exceeding 150,000 Baht: Exempt from Taxes.
• Bracket 2. Net Income of 150,001 – 300,000 Baht: Tax Rate of 5%.
• Bracket 3. Net Income of 300,001 – 500,000 Baht: Tax Rate of 10%.
• Bracket 4. Net Income of 500,001 – 750,000 Baht: Tax Rate of 15%.
• Bracket 5. Net Income of 750,001 – 1,000,000 Baht: Tax Rate of 20%.
• Bracket 6. Net Income of 1,000,001 – 2,000,000 Baht: Tax Rate of 25%.
• Bracket 7. Net income of 2,000,001 – 5,000,000 baht: Tax rate of 30%.
• Bracket 8. Net income of 5,000,000 baht: Tax rate of 35%.

Remarks: Personal income tax rates in 2020.

This means that your restaurant is in Bracket 3. Net Income of 300,001 – 500,000 Baht: Tax Rate of 10%.

How much do you have to pay in taxes if you make 100,000 baht a month?

The method for calculating your taxes in monetary value is as follows:
Your restaurant has a net income of 363,000 baht.
Bracket 1 – The first 150,000 baht is exempt from taxes.
Bracket 2 – The maximum net income for this bracket is 150,000 baht. In this bracket, the tax rate is 5%.

Therefore, 150,000 x 5% = 7,500 baht.

Bracket 3 – 363,000 baht – (Bracket 1. 150,000 baht) – (Bracket 2. 150,000 baht) = 63,000 baht

So, 63,000 x 10% = 6,300 baht.

In conclusion, you have to pay 7,500 + 6,300 = 13,800 baht in taxes.

Five figures seem like a lot, but you might actually have more write-offs than in our example. The government offers several write-offs that you can check with the Revenue Department, click. 

 Learn more about accounting and taxes in our free online course! Click. 

Don’t forget to keep an income-expense account to know your expenses, costs, profit and the source of your income-expenses, so you’ll have evidence when you file your taxes, which is essential. In addition, the account can also be used as evidence in case you get audited.
If you’re interested in our Simple Profit & Loss Management course, click here.