Vietnam: Officials and regulations to know in July, 2018

In July, 2018, Decree No. 72/2018/ND-CP of Vietnam’s Government and Circular No. 06/2018/TT-BNV of the Ministry of Home Affairs of Vietnam officially come into force with notable contents related to officials.

1. Increasing the statutory pay rate and actual pay for officials and public employees

From July 01, 2018, Decree No. 72/2018/ND-CP of Vietnam’s Government officially comes into force. This Decree increases the statutory pay rate from VND 1,300,000 to VND 1,390,000, applicable to officials, public employees and armed forces personnel.

In addition to increasing the statutory pay rate, allowances and wages of officials are also increased to correspond with the new statutory pay rate. In particular, increasing the actual salary received, one-time social insurance allowances, and the level of one-time retirement benefits, etc.

2. Applying new formula for calculating the amount of pay for officials

Formulas for calculating the amount of pay and allowance for officials are specified in Circular No. 06/2018/TT-BNV of the Ministry of Home Affairs of Vietnam. To be specific:

Formula for calculating amount of pay:

Amount of pay

=

Statutory pay rate VND 1,390,000 per month

x

Current pay coefficient

Formula for calculating amount of allowance calculated according to statutory pay rate:

Amount of allowance

=

Statutory pay rate VND 1,390,000 per month

x

Current allowance coefficient

Formula for calculating amount of allowance calculated according to current pay plus (+) leadership allowance and extra-seniority allowance (if any):

Amount of allowance effective from July 1, 2018

=

Amount of pay effective from July 1, 2018

+

Amount of leadership allowance effective from July 1, 2018 (if any)

+

Amount of extra-seniority allowance effective from July 1, 2018 (if any)

x

Rate of current allowance as prescribed

Formula for calculating compensating wage differential (if any):

Amount of compensating wage differential effective from July 1, 2018

=

Statutory pay rate VND 1,390,000 per month

x

Current compensating wage differential (if any)

View more details at Circular No. 06/2018/TT-BNV of the Ministry of Home Affairs of Vietnam, effective from July 15, 2018.

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