Does the attendance bonus include in the PIT taxable income in Vietnam?

Does the attendance bonus include in the PIT taxable income in Vietnam?

Based on the regulations in Official Dispatch 79557/CT-TTHT of 2018 regarding corporate income tax and personal income tax on allowances paid to employees, the regulations are as follows:

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Based on the above regulations, in the case where a company pays allowances for housing rent, transportation (from home to company at a fixed monthly rate), phone, and attendance bonuses to employees, explicitly stating the Conditions of Eligibility and Amounts Payable in one of the following dossiers: Labor contract; Collective labor agreement; Financial regulations of the Company, General Company, or Corporation; Reward regulations stipulated by the Chairman of the Board, General Director, or Director as per the financial regulations of the Company or General Company, then:

Regarding the allowances for housing rent, transportation, and attendance bonuses: the company can account them into deductible expenses when determining corporate income tax if meeting the provisions of Article 4 of Circular No. 96/2015/TT-BTC and include them in the taxable personal income of the employees.

Regarding the phone allowance: a fixed phone expense for individuals can be accounted into deductible expenses when determining corporate income tax according to the Corporate Income Tax Law, and thus it can be deducted when determining the taxable personal income.

In cases where the company pays phone expenses to employees exceeding the stipulated fixed rate, the excess must be included in the taxable personal income."

Thus, in the case where a company pays an attendance bonus to employees, explicitly stating the Conditions of Eligibility and Amounts Payable in any of the dossiers like the Labor Contract; Collective Labor Agreement; Financial Regulations of the Company, General Company, or Corporation; Reward Regulations set by the Chairman of the Board, General Director, or Director according to the financial regulations of the Company or General Company, the company must include this in the taxable personal income of the employees.

Does the attendance bonus include in the PIT taxable income in Vietnam? (Image from the Internet)

Does annual leave salary payment to employees include attendance bonuses in Vietnam?

Based on Article 90 of the Labor Code 2019, wages are the monetary amount that the employer pays to the employee following an agreement to perform work, including salary based on work or position, wage allowances, and other supplements.

Moreover, based on Clause 2 of Article 67 of Decree 145/2020/ND-CP which states:

Article 67. Business trip expenses, wages during travel time, wages on annual leave and other paid days off

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2. The wage serving as the basis for payment to employees for public holidays, Tet, annual leave, and other paid personal leave days according to Article 112, Clauses 1 and 2 of Article 113, Article 114, Clause 1 of Article 115 of the Labor Code is the wage stated in the labor contract at the time the employee takes leave.

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According to the above regulations, the wages paid to employees during annual leave are the wages agreed upon in the labor contract.

This means that if the company agrees on the wage in the labor contract which includes basic wages, allowances (including attendance bonuses), and other work-related support, these allowances must be included when calculating leave pay for employees.

Concerning employees paid on a contractual basis, fundamentally, this is merely a form of wage payment and is unrelated to determining wages for annual leave. When calculating the annual leave wage, reference should be made to the wage agreement in the Labor Contract to determine it.

Are employees failing to work for a full year entitled to annual leave in Vietnam?

Based on the provisions of Article 113 of the Labor Code 2019 on annual leave as follows:

Article 113. Annual Leave

1. Employees who have worked for 12 months for an employer are entitled to annual leave with full pay as stipulated in the labor contract as follows:

a) 12 working days for employees working under normal conditions;

b) 14 working days for minor employees, employees with disabilities, those doing heavy, hazardous, or dangerous jobs;

c) 16 working days for those doing particularly heavy, hazardous, or dangerous jobs.

2. Employees failing to work for 12 months for an employer are entitled to annual leave proportionate to the number of months worked.

3. In cases of termination of employment or job loss without having taken or fully taken annual leave days, the employer is required to compensate with payment for the untaken days.

4. Employers are responsible for setting the annual leave schedule after consulting with employees and must inform employees in advance. Employees may agree with employers to take annual leave in several periods or accumulate up to 3 years at a time.

5. When taking annual leave, if it does not fall on a pay day, employees are entitled to an advance of wages as stipulated in Clause 3 of Article 101 of this Labor Code.

6. During annual leave, if employees travel by road, rail, or water transport and the travel time exceeds 2 days for the round trip, from the third day onwards, they will be granted additional travel time beyond annual leave days, applicable once a year.

7. The Government will detail this provision.

Thus, employees failing to work for a full year for an employer are still entitled to annual leave. The number of annual leave days is proportionate to the number of months worked.