Vietnam: Is it mandatory to pay a 13th month salary to employees? How to calculate 13th month salary for employees?
- Is it mandatory to pay 13th month salary to employees in Vietnam?
- How to calculate 13th-month salary for employees in Vietnam?
- How to calculate 13th-month salary according to 12th-month salary in Vietnam?
- Does 13th month salary count social insurance premiums in Vietnam?
- Does personal income tax be charged on 13 month salary in Vietnam?
Is it mandatory to pay 13th month salary to employees in Vietnam?
Currently, there are no legal documents stipulating that enterprises must be required to pay 13th month salary to employees.
The payment of the 13th month salary to the employee depends on the agreement of the employee and the enterprise. This agreement is noted in the collective labor agreement or labor contract.
In case there is no agreement, the payment of the 13th month salary, the payment of the 13th month salary will depend on the decision of the business owner, based on the production and business results of the enterprise in the year and the working results, efforts and contributions of the employees
Vietnam: Is it mandatory to pay a 13th month salary to employees? How to calculate 13th month salary for employees?
How to calculate 13th-month salary for employees in Vietnam?
Normally, the 13th month salary is applied to employees who are working at the enterprise for a full month or more. Each business will have its own 13-month salary calculation.
Here are the two most commonly used calculations in specific businesses as follows:
For employees who have worked for 12 months or more:
13th month salary = 12-month average salary
An example of calculating the 13th month salary for the case of an employee who has worked for 12 months or more is as follows:
Mr. X has a salary from January 2021 to October 2021 of 13 million VND/month; from 11/2021 is 16 million VND/month.
Thus, Mr. X's 13th month salary is calculated as follows: ((13 million VND x 10 months) + (16 million VND x 2 months)))/12 months = 13.5 million VND.
For employees who have worked for less than 12 months:
13th month salary = working time in year/12 x average salary
A specific example of a worker's 13th month salary for less than 12 months is as follows:
Ms. Y has been working officially at Company X since August 2021, by the end of December 2021, it is 05 months, the salary is 08 million VND/month.
Ms. Y's 13th month salary is calculated as follows: (5 months/12 months) x 8 million VND = 3.33 million VND.
How to calculate 13th-month salary according to 12th-month salary in Vietnam?
To ensure the most benefit for employees, many businesses apply the 13th month salary calculation according to the 12th month salary. The formula for calculating the 13th month salary according to the 12th month salary is specifically:
13th month salary = 12th month salary
Does 13th month salary count social insurance premiums in Vietnam?
According to the guidance in Official Dispatch 560/LDTBXH-BHXH in 2018 of the Ministry of Labor, War Invalids and Social Affairs, the salary based on the employee's social insurance contribution does not include the 13th month salary and bonus according to the annual assessment of work results.
Does personal income tax be charged on 13 month salary in Vietnam?
According to Point a, Clause 2, Article 3 of the Law on Personal Income Tax 2007 (this clause is amended by Clause 1, Article 1 of the Amended Personal Income Tax Law 2012) stipulates that wages, wages and items of the nature of wages and wages are considered taxable income.
The 13th month salary is an income of the nature of salary and wages, so the 13th month salary is also subject to personal income tax calculation as prescribed.
Above is some of the information we provide to you. Best regard!
LawNet
