Detailed guidelines on forms of salary payment in accordance with the Labor Code 2019 of Vietnam

According to Clause 1 Article 96 of the Labor Code 2019 of Vietnam, the employer and employee shall reach an agreement on whether the salary is time-based, product-based (piece rate) or a fixed amount.

This regulation is specifically guided in Article 54 of the Decree No. 145/2020/NĐ-CP of Vietnam’s Government. The form of salary payment shall be specified in the employment contract on the basis of consensus between the employer and the employee. To be specific:

1. Time-based salary shall be paid to the employee monthly, weekly, daily or hourly as agreed in the employment contract. To be specific:

- Monthly salary is the salary for a month’s work;

- Weekly salary is the salary for a week’s work. In case monthly salary is specified in the employment contract, the weekly salary equals (=) the monthly salary multiplied by (x) 12 months and divided by (:) 52 weeks;

- Daily salary is the salary for a days’ work. In case the monthly salary is specified in the employment contract, the daily salary equals (=) the monthly salary divided by (:) the number of normal working days in a month as decided by the employer. In case weekly salary is specified in the employment contract, the daily salary equals (=) the weekly salary divided by (:) the number of working days in a week as specified in the employment contract;

- Hourly salary is the salary for an hour’s work. In case monthly, weekly or daily salary is specified in the employment contract, the hourly salary equals (=) the daily salary divided by (:) the number of normal working hours in a day as prescribed by Article 105 of the Labor Code.

2. Piece rate pay is paid to piece workers according to the quantity and quality of products, productivity norms and unit prices of the products.

3. Fixed salary is paid according to the quantity and quality of works and time needed for completion of these works.

Note: Payment of salaries in the 03 forms mentioned above shall be made transferred to the employees’ bank accounts. It is noted that the Labor Code 2019 of Vietnam stipulated that the employers shall pay the fees for opening accounts and transferring salaries from 2021.

Thuy Tram

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