Formula for monthly salary and income after payment of social insurance contributions in Vietnam

Formula for monthly salary and income after payment of social insurance contributions in Vietnam (Internet image)

Regarding this matter, LawNet would like to answer as follows: 

On December 29, 2023, the Minister of Labor, War Invalids and Social Affairs issued Circular 20/2023/TT-BLDTBXH regulating the adjustment of salaries and monthly income for which social insurance has been paid (also known as the coefficient). Social insurance price slippage).

1. Formula for monthly salary after payment of social insurance contributions in Vietnam

Monthly salaries after payment of social insurance contributions of persons specified in Clause 1 Article 1 of Circular 20/2023/TT-BLDTBXH shall be indexed as follows:

In that formula, the indexation rate of monthly salary after payment of social insurance contributions in the corresponding year shall be determined, based on Table 1 given hereunder:

Table 1:

- If employees have paid social insurance contributions for periods under both the pay scheme prescribed by the State’s regulations and the pay scheme decided by employers, monthly salaries after payment of social insurance contributions of those employees who started participating in social insurance programs according to the pay scheme regulated by the State from January 01, 2016 and earlier, and monthly salaries after payment of social insurance contributions according to the pay scheme decided by employers shall be adjusted in accordance with the provisions in Clause 1 of this Article.   

2. Formula for monthly income after payment of social insurance contributions in Vietnam

Monthly income after payment of social insurance contributions of persons specified in Clause 2 Article 1 of Circular 20/2023/TT-BLDTBXH shall be indexed as follows:

In that formula, the indexation rate of monthly income after payment of social insurance contributions in the corresponding year shall be determined, based on Table 2 given hereunder:

Table 2:

- If employees have both compulsory social insurance contribution period and voluntary one, the monthly income after payment of voluntary social insurance contributions shall be indexed according to Clause 1 of this Article while the monthly salary after payment of compulsory social insurance contributions shall be indexed according to the provisions in Article 10 of the Decree 115/2015/ND-CP and Article 2 of Circular 20/2023/TT-BLDTBXH.  The average rate of monthly salary and income after payment of social insurance contributions which are used as a basis for calculation of retirement pensions, one-off allowances upon retirements, one-off social insurance benefit payments and one-off death insurance benefit payments as provided for in Clause 4 Article 11 of the Decree 115/2015/ND-CP and Clause 4 Article 5 of Decree 134/2015/ND-CP.

Circular 20/2023/TT-BLDTBXH takes effect from February 15, 2024; The regulations in Circular 20/2023/TT-BLDTBXH apply from January 1, 2024.

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