Overtime Wages of Employees: Are Mandatory Social Insurance Contributions Required?

Based on Section 2.2 Article 6 of Decision 595/QD-BHXH, from January 01, 2018 onwards, the monthly salary for compulsory social insurance contributions includes the salary, salary allowances, and other additional payments, specifically:

- The salary used to calculate social insurance includes: Time-based salary determined according to the job or position, based on the salary scale and salary table developed by the employer in accordance with labor law, which has been agreed upon by both parties. For employees receiving piecework or contract-based salaries, the time-based salary is recorded to determine the unit price for piecework or the contracted salary.- Salary allowances for social insurance calculation are salary allowances that compensate for elements such as working conditions, job complexity, living conditions, the degree of labor attraction that the agreed salary in the labor contract has not accounted for or has not fully accounted for, such as position allowances, title allowances; responsibility allowances; allowances for hazardous, toxic, and dangerous work; seniority allowances; area allowances; mobile allowances; attraction allowances; and similar allowances.- Other additional payments that both parties have agreed upon, including specific amounts that can be determined along with the agreed salary in the labor contract and are paid regularly in each pay period.

Overtime salary and extra work salary are amounts that cannot be determined specifically, as in reality, employees who work more receive more, and those who work less receive less. These are not regular payments and therefore fall under Point b, Section 3, Article 4 of Circular 47/2015/TT-BLDTBXH, and thus are not subject to social insurance contributions for these amounts.

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