Vietnam: What is the statutory pay rate used for calculating salaries paid to teachers?

What is the statutory pay rate used for calculating salaries paid to teachers in Vietnam?

Under Article 3 of Decree 73/2024/ND-CP, the statutory pay rate used for calculating salaries paid to teachers in Vietnam is regulated as follows:

Statutory pay rate

1. The statutory pay rate shall be used as the basis for:

a) Calculating salaries in payrolls, allowances and other benefits as per the law with regard to individuals defined in Article 2 of this Decree;

b) Calculating operation funding and subsistence allowances as per the law;

c) Calculating deductions and benefits according to the statutory pay rate.

2. From July 01, 2024, the statutory pay rate is VND 2,340,000 per month.

3. The agencies and units that are implementing the special financial and income mechanisms at central level: retain the differences between additional salaries and incomes in June, 2024 paid to officials and public employees and salaries paid from July 01, 2024 after such special financial and income mechanisms are amended or annulled. Pending such amendments to annulment, from July 01, 2024, the additional monthly salaries and incomes will be paid according to the statutory pay rate of VND 2,340,000 million/month as prescribed by such special mechanisms, ensuring that they shall not exceed the additional salaries and incomes paid in June, 2024 (excluding the increase in salaries and incomes resulted from adjustment of rank- or grade-based pay rate). If the increase in salaries and incomes from July 01, 2024 calculated using the aforementioned special mechanism is lower than the salaries calculated using normal methods, the latter shall apply.

4. The Government shall adjust the statutory pay rate after requesting the National Assembly to consider making its decision in conformity with the capacity of the state budget, consumer price index and national economic growth rate.

The statutory pay rate used to calculate the salaries paid to teachers currently is 2,340,000 VND.

Additionally, the statutory pay rate is used as the basis to determine:

- Calculating salaries in payrolls, allowances and other benefits as per the law with regard to individuals defined in Article 2 of Decree 73/2024/ND-CP;

- Calculating operation funding and subsistence allowances as per the law;

- Calculating deductions and benefits according to the statutory pay rate.

What is the statutory pay rate used for calculating salaries paid to teachers in Vietnam?  (Image from the Internet)

How much salary should teachers earn to pay personal income tax?

Under Article 2 of Circular 111/2013/TT-BTC:

Taxable income

...

2. Incomes from wages and remunerations.

Incomes from wages and remunerations (hereinafter referred to as wages) are incomes paid to employees from employers, including:

a) Wages, remunerations, and the other amounts paid as wages or remunerations in cash or not in cash.

b) Allowances and benefits, except for:

b.1) Monthly benefits, lump-sum benefits and allowances according to regulations of law on incentives for contributors.

b.2) Monthly allowances and lump-sump allowances for the persons that participate in the resistance movements, national defense, fulfillment of international tasks, and discharged volunteers.

b.3) Benefits for national defense and security; subsidies for the armed forces.

b.4) Benefits for dangerous or harmful works.

b.5) Benefits for employees in disadvantaged areas.

b.6) Irregular allowances for difficulties, occupational accident benefits, occupational illness benefits, lump-sum allowances for childbirth or adoption, maternity leave benefits, post-maternity recovery benefits, benefits for reduction in work ability, lump-sum pension, monthly widow’s pension, severance pay, redundancy pay, unemployment benefits, and other benefits according to the Labor Code and the Law on Social insurance.

b.7) Benefits for beneficiaries of social security.

b.8) Benefits for senior officers.

...

The salary paid to teachers is subject to personal income tax.

Under Article 1 of Resolution 954/2020/UBTVQH14, the personal deductions are regulated as follows:

Personal deduction

Adjusting the personal deductions prescribed in Clause 1, Article 19 of the Personal Income Tax Law No. 04/2007/QH12, amended and supplemented according to Law No. 26/2012/QH13, as follows:

1. The deduction for taxpayers is 11 million VND/month (132 million VND/year);

2. The deduction per dependent is 4.4 million VND/month.

Teachers receiving salaries under 11 million VND/month are eligible for personal deduction when calculating PIT.

Teachers receiving salaries over 11 million VND/month must pay PIT but may enjoy an additional deduction of 4.4 million VND/month if they have dependents.

How to calculate salaries paid to teachers who are public employees in Vietnam from July 1, 2024?

The salary shall be calculated by the salary coefficient of the professional title of the teacher.

Furthermore, when the statutory pay rate is increased to 2,340,000 VND/month (according to the formula in Clause 2, Article 3 of Decree 73/2024/ND-CP), the salaries paid to officials and public employees are calculated according to the regulations in Article 3 of Circular 07/2024/TT-BNV as follows:

Salary = 2,340,000 VND/month x salary coefficient

*Unit: VND/month

Note: The salary mentioned above does not include allowances that officials and public employees receive.