Vietnam: Determining the planned average salary for employees

According to Circular No. 26/2016/TT-BLĐTBXH of the Ministry of Labor, War Invalids and Social Affairs of Vietnam, if the enterprise’s average labor output surpasses that attained in the immediately preceding year, the planned average salary shall be calculated as follows:

TLbqkh = TLbqthnt + TLbqthnt x  x Htlns

Where:

- TLbqkh: The planned average salary.

- TLbqthnt: The average salary imposed in the immediately preceding year is the result of the division of the salary budget allotted by the average number of workers employed in the immediately preceding year.

- Wkh: The planned average labor productivity; Wthnt: average labor productivity attained in the immediately preceding year.

- Htlns: The coefficient of salary increase consistent with the increase in average labor productivity planned in comparison with that attained in the immediately preceding year. 

The enterprise sets the value of such coefficient in line with the planned profit: if the profit planned is higher than that attained in the immediately preceding year:

- Htlns does not exceed 1.0. If the former is equal to the latter;

- Htlns does not exceed 0.8. If the former is lower than the latter;

- Htlns does not exceed 0.5.

Besides, the planned profit and the profit attained in the immediately preceding year are specified after the determination of the salary of the Members' Council or Chairperson of the enterprise, Head of the Control Committee, Controllers, General Director (Director), Deputy General Directors (Vice Directors), and Chief accountant.

View details at Circular No. 26/2016/TT-BLĐTBXH of the Ministry of Labor, War Invalids and Social Affairs of Vietnam, effective from October 15, 2016.

-Thao Uyen-

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