Payroll calculation


1. . What is the payroll ladder? Regulations on building payroll scales

The payroll scale is based on general regulations and principles, as stipulated in legal documents including:

  • Labor Code 2019 (Effective from January 1, 2021)
  • Decree No. 49/2013/ND-CP
  • Decree No. 121/2018/ND-CP

This is also a legal basis for units and enterprises to build their own payroll scale, in accordance with the nature of work and characteristics of enterprises.

1.1 What is the payroll ladder?

The payroll scale (salary scale, payroll) is a system of salary groups, salary quotas and salary levels designed as the basis for paying wages for employees. Depending on the capacity and complexity of the job, the business will pay the employee based on the built payroll scale.

1.2 Regulations on the construction of payroll scales and labor norms

According to Article 93 of the Labor Code 2019, enterprises must build salary scales, payrolls and labor norms. This payroll scale will be used as a basis for recruitment, employer, employment, job or title agreement recorded in the labor contract and pay for the employee.

On the other hand, the labor level must be the average to ensure the majority of employees can perform without having to extend normal working hours and must be applied before the official promulgation. The principle of building a system of salary scales and payrolls shall be implemented in accordance with Article 7 of Decree No. 49/2013/ND-CP.

Note: The salary scale, payroll and labor level must be publicly disclosed in the workplace before implementation. When building a payroll scale, it is required to consult with the employee representative organization.

2. Detailed payroll scale registration guide

Enterprises shall register for payroll scale when:

  • Newly established enterprises must submit payroll scale dossiers to the Social Invalids and Labor Department at the district/district level where the enterprise is headquartered.
  • Businesses that are operating when there is a change in salary must rebuild the payroll scale.

Before applying for payroll scale registration, enterprises need to complete the dossier of payroll registration.

2.1 Payroll scale application

There are 2 cases of registration of payroll scale corresponding to each case the enterprise needs to prepare different registration dossiers:

Application for the first salary scale:

For units and enterprises making dossiers for registration of payroll scales for the first time, it is necessary to prepare a set of dossiers including the following papers:

  1. – Power of attorney of the employee collective for 1 individual (the unit does not have a grassroots trade union organization). Attached to the list of authorized workers.
  2. – Decision on establishment of a payroll review board.
  3. – Prepare 02 copies of salary scale, payroll.
  4. Salary allowance (if any).
  5. – Detailed regulations describing job titles.
  6. – Decision to promulgate the payroll system.
  7. – Minutes of meeting of the council to review the payroll scale.
  8. – Minutes of agreement between the employee and the employer.
  9. – Business registration certificate (notarized copy).
  10. – Notice of payroll scale.
  11. – Registration of salary scale and payroll system.

Dossiers of registration of payroll scales for enterprises registered when changing and adjusting salaries:

  1. – 01 old salary scale and payroll (Labor Department of district, district or town confirmed).
  2. – 03 new salary scales, payrolls.
  3. – 03 copies of salary allowance (if any).

2.2 Procedures for registration of payroll scale

For units and enterprises registering the salary scale and payroll for the first time before carrying out procedures for registration of the payroll scale system, the unit must carry out procedures for registration of employers of units in the district CCHC department. Submit with the Declaration and Payroll Ladder.

The order of registration is as follows:

Step 1: Enterprises shall build ladders and payrolls according to the principles prescribed by the Government and send them to state management agencies on district-level labor.

Step 2: The state management agency of the district-level labor receives the ladder and payroll registration. In case the State management agency detects the scales and payrolls of enterprises in violation of the principles prescribed by the Government, they shall notify the enterprises to amend and supplement in accordance with regulations.

Enterprises (employing 10 or more employees) register the payroll scale, submit their applications in person or submit by post:

  • For enterprises employing 50 or less employees submitted at the headquarters of people's committees of districts, districts, towns and cities under the province.
  • For enterprises employing 50 or more employees, they shall submit their dossiers at the headquarters of the Provincial-level Labor Department or centrally-affiliated cities.

The time for processing dossiers is after 05-07 days from the date of receipt of valid dossiers of the War Invalids and Social Affairs Department confirming the dossier of payroll registration.

3. Penalties for late payment of payroll scales

Registration of the payroll scale slowly, or late payment of the corporate payroll scale will be sanctioned according to regulations. Pursuant to Article 13 of Decree No. 88/2015/ND-CP based on corporate characteristics and violations, there are two levels of sanctions as follows:

– A warning or a fine of from VND 500,000 to VND 1,000,000 shall be imposed on an employer who does not send a salary scale, payroll and labor norms to the state management agency of the district-level labor force as prescribed.

– A fine of from VND 2,000,000 to VND 5,000,000 shall be imposed on an employer who commits one of the following acts:

  • Failing to build salary scales, payrolls, labor norms and bonus regulations as prescribed by law;
  • Do not consult with the representative organization of the labor collective at the facility when formulating salary scales, payrolls, labor norms, bonus regulations;
  • Not publicly disclosed at the workplace salary scales, payrolls, labor norms, bonus regulations;
  • Do not notify the employee in advance of the form of payment at least 10 days before implementation