Vietnam: What salary of employees is the 13th salary payment based on?

1. What is the 13th month salary?

Until now, the Labor Code has not had a separate article on "13th month salary", and this term is also not mentioned by the law. In fact, this is understood as the amount paid by the enterprise to the employee and is considered as a bonus benefit for the employee at the end of the year.

With the nature of a benefit, the 13th month salary is considered a "bonus" specified by Article 104 of the Labor Code 2019 of Vietnam as follows:

Article 104. Bonuses

1. A bonus means an amount of money, a piece of property or item that is provided by an employer for his/her employees on the basis of the business performance or the employees’ performance.

2. A bonus regulation shall be decided and publicly announced at the workplace by the employer after consultation with the representative organization of employees (if any).

This provision of the Labor Code 2019 of Vietnam is on “bonuses” instead of “monetary bonus” according to the Labor Code 2012, according to which employers when giving bonuses to employees in cash or property or other forms that are not necessarily monetary. This is considered a remarkable new point in the bonus regulation of the Labor Code 2019 of Vietnam.

>> See more: From 2021, enterprises give Tet bonuses to employees not necessarily in money

In short, the 13th month salary is considered a bonus that employers reward employees.

2. What salary is the 13th salary payment based on?

The 13th month salary is also considered as a bonus that is usually paid at the same time as the Tet bonus, so like the Tet bonus, the 13th month salary will be decided by the enterprise. Specifically, based on the production and business results, the level of work completion of the employees, the enterprise decides whether to reward the 13th month salary for the employee or not. Like other bonuses, the Labor Code 2019 of Vietnam does not require enterprises to reward employees with a 13th month salary.

Although the 13th month salary is the same as a bonus paid at the end of the year like Tet bonus, it is necessary to distinguish that the 13th month salary is not a Tet bonus. Depending on the Regulations of each company, these bonuses will be clearly defined.

Accordingly, the Regulation on 13th month salary bonus will also be decided by the employer and publicly announced at the workplace after consulting with the representative organization of employees at the grassroots level for the place where the representative organization of workers is located at the grassroots level.

So, whether there is the 13th month salary bonus or not? how much? what salary is the 13th salary payment based on? shall be decided by the enterprise and specified in the company's Regulations. The law assigns the right to decide on rewards for businesses, but there is no hard rule, forcing enterprises to reward or reward how much for employees.

Thuy Tram

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