Hanoi-Vietnam: What is the indexation rate? How to calculate the indexation rate of monthly salary and income after payment of social insurance contributions in 2024?
What is the indexation rate? How to calculate the indexation rate of monthly salary and income after payment of social insurance contributions in 2024? - asked Ms. Hong Hanh (Ben Tre-Vietnam)
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Hanoi-Vietnam: What is the indexation rate? How to calculate the indexation rate of monthly salary and income after payment of social insurance contributions in 2024? (Image from the internet)
Regarding this matter, LawNet provides the following answers:
On December 29, 2023, the Minister of Labor, Invalids and Social Affairs issued Circular 20/2023/TT-BLDTBXH stipulating the indexation rate of monthly salary and income after payment of social insurance contributions 2024.
1. What is the indexation rate?
Currently, there is no legal document specifically explaining what the indexation rate is. However, it can be understood as the difference reflecting market price fluctuations compared to the value of goods.
The indexation rate is regulated by the state periodically to create a balance in monetary value at the current time compared to previous times. Usually, the indexation rate is adjusted annually or during times of high inflation.
2. How to calculate the indexation rate of monthly salary and income after payment of social insurance contributions in 2024
Based on the provisions in Article 10 of Decree 115/2015/ND-CP and Article 4 of Decree 134/2015/ND-CP, the indexation rate of monthly salary and income after payment of social insurance contributions in 2024 is calculated based on the annual average consumer price index and is determined by the following formula:
2.1 Indexation rate of salary after payment of social insurance contributions
The Indexation rate of salary after payment of social insurance contributions is calculated based on the annual average consumer price index and is determined by the following expression:
| Indexation rate of salary after payment of social insurance contributions of year t | = | Annual average consumer price index of the year immediately before the year the employee receives social insurance, calculated with a base comparison of 1994 as 100% | : | Annual average consumer price index of year t, calculated with a base comparison of 1994 as 100% |
Where:
- t is any year during the adjustment period;
- The indexation rate of salary after payment of social insurance contributions is rounded to two decimal places, with the minimum level being 1 (one).
2.2 Indexation rate of income after payment of social insurance contributions
The indexation rate of income after payment of social insurance contributions is calculated based on the annual average consumer price index as announced by the General Statistics Office annually and is determined using the following formula:
| Indexation rate of salary after payment of social insurance contributions of year t | = | Annual average consumer price index of the year immediately before the year the voluntary social insurance participant receives social insurance, calculated with a base comparison of 2008 as 100% | : | Annual average consumer price index of year t, calculated with a base comparison of 2008 as 100% |
In which:
- t is any year during the adjustment period;
- The indexation rate of monthly income after payment of social insurance contributions of year t is rounded to two decimal places, with the minimum level being 1 (one).
3. Latest indexation rate of monthly salary and income after payment of social insurance contributions in 2024
The indexation rate of monthly salary and income after payment of social insurance contributions in 2024 from January 1, 2024, is as follows:
* Indexation rate of monthly salary after payment of social insurance contributions:
| Year | Before 1995 | 1995 | 1996 | 1997 | 1998 | 1999 | 2000 | 2001 | 2002 | 2003 | 2004 |
| indexation rate | 5.43 | 4.61 | 4.36 | 4.22 | 3.92 | 3.75 | 3.82 | 3.83 | 3.68 | 3.57 | 3.31 |
| Year | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 |
| indexation rate | 3.06 | 2.85 | 2.63 | 2.14 | 2.0 | 1.83 | 1.54 | 1.41 | 1.33 | 1.27 | 1.27 |
| Year | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | ||
| indexation rate | 1.23 | 1.19 | 1.15 | 1.12 | 1.08 | 1.07 | 1.03 | 1.0 | 1.0 |
* Indexation rate of monthly income after payment of social insurance contributions:
| Year | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 |
| indexation rate | 2.14 | 2.0 | 1.83 | 1.54 | 1.41 | 1.33 | 1.27 | 1.27 | 1.23 |
| Year | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | |
| indexation rate | 1.19 | 1.15 | 1.12 | 1.08 | 1.07 | 1.03 | 1.0 | 1.0 |
More details can be found in Circular 20/2023/TT-BLDTBXH, which takes effect from February 15, 2024; the provisions of Circular 20/2023/TT-BLDTBXH apply from January 1, 2024.
Circular 01/2023/TT-BLDTBXH will expire from February 15, 2024.
Nguyen Ngoc Que Anh
- Key word:
- indexation rate
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