Labor Unit Prices in Construction Projects in Vietnam

14:29, 11/07/2024

Determining the labor unit price for construction works is a highly important task. When the labor unit price is determined, individuals and organizations involved in the field of construction can easily calculate appropriate costs for each project, work, and construction package.

Circular 05/2016/TT-BXD prescribes the method of determining labor cost rates according to the following formula:

G_NC = L_NC x H_CB x 1/t

Where:

- G_NC: Labor cost rate calculated for one working day based on the skill level of workers directly involved in construction.

- L_NC: Statutory pay rate per month used for determining the labor cost rate for one working day based on the skill level of workers directly involved in construction. This cost includes wage allowances based on the characteristics and nature of construction production and takes into account market factors and insurance contributions payable by employees as regulated (social insurance, health insurance, unemployment insurance). Specifically:

Region I	Region II	Region III	Region IV
2,350,000 ÷ 2,530,000	2,150,000 ÷ 2,320,000	2,000,000 ÷ 2,154,000	1,900,000 ÷ 2,050,000

- H_CB: Wage coefficient according to the skill level of workers directly involved in construction, as published in Appendix 2 attached to this Circular.

- Group I: Workers performing direct construction production tasks such as:

- Carpentry, masonry, ironwork, various concrete works (excluding asphalt concrete), formwork, finishing, excavation, and embankment;

- Construction surveying (including construction measurement);

- Operating various construction machines and equipment (earthmoving machines, compactors, lifting machines, drilling machines, pile driving machines, pumps, welding machines, etc.) including manual labor directly serving construction work.

- Group II: Tasks not included in Group I

Construction worker skill level	1	2	3	4	5	6	7
Group I Wage coefficient	1.55	1.83	2.16	2.55	3.01	3.56	4.20
Group II Wage coefficient	1.76	2.07	2.44	2.86	3.37	3.96	4.65

- t: Number of working days in the month (26 days)

When determining the labor cost rate, it is necessary to ensure the principles guided by Circular 05 as follows:

- Appropriate to the skill level of workers;

- Matching the prevailing labor cost rates in the construction market (including wage compensation due to living conditions) in each locality but not lower than the regional minimum wage regulated by the Government of Vietnam.

- Aligning with the characteristics and nature of construction work.

- Sufficient to cover some expenses that employees are responsible for according to regulations, such as social insurance, health insurance, and unemployment insurance.

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