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Vietnam: Guidance on determining bonus and benefit package for employees

09:03, 05/10/2016

Circular No. 28/2016/TT-BLĐTBXH of the Ministry of Labor - Invalids and Social Affairs of Vietnam provides guidance on implementation of regulations on labor, salary, compensation and bonus for companies whose shares or contributed capital portions are predominantly owned by the State.

According to Circular No. 28/2016/TT-BLĐTBXH of the Ministry of Labor - Invalids and Social Affairs of Vietnam, the company shall determine the bonus and benefit package of employees and managers, depending on the degree of accomplishment of planned profit targets. To be specific:

- If the realized profit is equal to the planned profit, the bonus and benefit package shall not exceed 3 months' realized average salary paid to employees at the maximum.

- If the realized profit is greater than the planned profit, in addition to the bonus and benefit package stated in subparagraph a above, the company shall offer an additional 20% of profit portion exceeding the planned profit but shall not be greater than 3 months' realized average salary paid to employees.

- If the realized profit is less than the planned profit, the bonus and benefit package shall not exceed 3 months' realized average salary paid to employees at the maximum multiplied by the percent proportion of the realized profit to the planned profit.

The above fund is allocated to reward employees and invest in construction or repair of welfare projects and employee welfare activities.

Circular No. 28/2016/TT-BLĐTBXH of the Ministry of Labor - Invalids and Social Affairs of Vietnam takes effect from October 15, 2016.

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