In every business, accurate salary calculation is not only an obligation but also an essential factor to maintain fairness and transparency in labor relations. Especially with the changes in legal regulations regarding the basic salary and regional minimum wage levels from July 1, 2024, companies need to update and adjust their salary calculation methods to ensure compliance with the law and protect the rights of workers.
This article will help you better understand the latest regulations related to the basic salary, regional minimum wage levels, and the commonly used salary calculation methods. Specifically, we will provide detailed information on how to calculate fair salaries and popular salary payment methods to help businesses and employees achieve fairness and the highest efficiency in the working environment.
1. What is Salary Calculation?
Salary calculation is one of the key factors in determining an employee’s income. This process not only helps businesses fulfill their obligation to pay salaries on time but also ensures fairness and transparency in wage distribution. Particularly, when the salary is calculated according to the legal regulations, it helps protect the rights of employees and prevents unnecessary labor disputes.
Salary calculation can be done using various methods, depending on the nature of the work, the requirements of each industry, and the agreement between the business and the employee. Common salary calculation methods include: time-based salary, product-based salary, piece-rate salary, revenue-based salary, or salary based on agreements in the employment contract.
What is Time-based Salary Calculation?
Time-based salary calculation is a method where the salary is based on the actual hours or days worked by the employee over a specific period (month, week, or day). This method is especially suitable for jobs with stable working hours and no high productivity requirements. Time-based salary calculation helps businesses easily control labor costs and adjust salaries according to different periods.
What is Product-based Salary Calculation?
Product-based salary calculation is a method where the salary is based on the quantity and quality of products produced by the employee. This method is common in manufacturing or service industries, where employees can work on specific products, and the results can be easily measured. This method encourages employees to increase productivity and improve product quality.
What is Piece-rate Salary Calculation?
Piece-rate salary is a form of calculation where the employee is paid for completing a fixed amount of work within a pre-agreed time frame. The salary paid to the employee depends on the effectiveness of the work they complete. This method is suitable for jobs with clear workloads that are assigned in advance, helping boost employees’ motivation.
What is Revenue-based Salary Calculation?
Revenue-based salary is a method of paying employees based on the revenue they bring to the company. This form is common in sales departments or industries that have direct relationships with customers. The salary of the employee is calculated as a percentage of the revenue or profit they achieve during a given period.
What is Agreement-based Salary Calculation?
Agreement-based salary calculation is a flexible method, decided in the employment contract between the business and the employee. The base salary, allowances, bonuses, and other terms will be clearly agreed upon from the start. This method allows businesses to adjust the salary based on job requirements and the business’s circumstances.
2. The Basic Salary and Minimum Regional Salary in 2025
The basic salary and the minimum regional salary are important factors in determining a fair salary for employees, while also ensuring that businesses comply with legal regulations.
What is the Basic Salary?
The basic salary is the minimum salary set by the government, which is used as a basis to calculate the wages for government officials, civil servants, public employees, and other workers in the public sector. Starting from July 1, 2024, the basic salary has been adjusted to 2,340,000 VND/month, an increase of 540,000 VND from the previous rate of 1,800,000 VND/month. This adjustment aims to improve the income for workers and meet living demands in the context of the economic recovery and increasing living costs.
What is the Minimum Regional Salary from July 1, 2024?
From July 1, 2024, the minimum regional salary will be adjusted according to Decree 38/2022/ND-CP by the government, with specific rates as follows:
- Region I (Large cities and areas with a high cost of living such as Hanoi, Ho Chi Minh City): 4,680,000 VND/month
- Region II (Medium-sized urban areas): 4,160,000 VND/month
- Region III (Rural areas and less developed provinces): 3,640,000 VND/month
- Region IV (Areas with the most difficult economic conditions): 3,250,000 VND/month
The minimum regional salary from July 1, 2024, will help protect the rights of workers, ensuring that they can cover basic living expenses and promoting fairness in the labor market across different regions.
Minimum Regional Salary and Hourly Wage Adjustments
Each region’s minimum wage will be adjusted based on the cost of living and the local economic conditions. The hourly wage adjustments will also be regulated to ensure that hourly workers are paid fairly and equitably.
Why Adjust the Minimum Wage in 2024?
The adjustment of the minimum wage from July 1, 2024, aims to meet the living needs and protect workers’ rights. This also helps businesses comply with legal regulations, ensuring fairness in wage payment across different regions. These changes reflect the economic development and living conditions of the people.
3. Popular Payroll Methods and How to Calculate Salary
Choosing the appropriate salary payment method based on the nature of the job not only helps businesses optimize personnel costs but also motivates employees to perform well. Each salary payment method has its own advantages and disadvantages, and companies need to fully understand these methods to select the one that suits their business objectives and human resource strategy.
What is Time-Based Salary?
Time-based salary is the most common payment method used by companies with stable jobs, little change, and no requirement for high productivity or results. Employees are paid based on the number of hours or days worked in a given period (month, week, day). This method is simple, easy to track, and easy to control. However, it may lack flexibility in motivating employees to improve their productivity.
The formula for calculating time-based salary is:
Monthly salary = (Basic salary + Allowances) / Standard working days * Actual working days.
One drawback of this method is that if employees do not meet the required working days or take leave, they will not receive their full salary based on the fixed amount. This can affect employee income and may cause dissatisfaction if not explained clearly.
What is Product-Based Salary?
Product-based salary is the method of paying employees based on the quantity and quality of the products they have produced. This method is commonly applied in industries such as manufacturing, processing, or jobs where results can be clearly measured through the final product.
Product-based salary can be calculated based on the unit price for each product or task completed by the employee. This method not only encourages employees to improve work efficiency but also motivates them to enhance the quality of the product. However, this method can also create significant pressure on employees if the required quantity and quality are not properly adjusted.
The formula for calculating product-based salary is:
Product salary = Number of products x Price per product.
What is Task-Based Salary?
Task-based salary is a payment method where employees are paid based on the amount of work completed as previously agreed. Employees receive their salary based on the effectiveness and quality of their work. This method helps increase employees’ responsibility for the results of their work and is typically used for specific projects or jobs that do not have fixed working hours.
The task-based salary can be defined by the project or specific goals set. This method helps companies save costs and reduces the need for strict supervision, while also allowing employees flexibility with their work hours.
The formula for calculating task-based salary is:
Task salary = Agreed salary rate * Work completion rate.
What is Revenue-Based Salary?
Revenue-based salary is a method where employees receive a percentage of the revenue or profit they generate for the company. This method is commonly used in sales, marketing, or roles directly related to revenue generation, such as sales representatives, consultants, or marketers.
Employees’ salary will vary depending on the results they achieve for the company, which helps motivate them to strive for higher sales targets. However, this method can also create pressure for employees if the sales targets are too high and difficult to reach.
The formula for calculating revenue-based salary is:
Revenue salary = Individual or group revenue achieved x Revenue-based salary policy.
What is Agreement-Based Salary?
Agreement-based salary is a method outlined in the employment contract between the employer and employee. The salary amount, payment schedule, allowances, bonuses, and other terms will be agreed upon and explicitly stated in the employment contract. This method offers flexibility for both the employee and the company, allowing both parties to adjust salaries based on job needs and business conditions.
Salary levels and terms may be changed, but reasonable adjustments must be made to comply with labor laws.
4. Guide to Salary Calculation in 2025: The Latest Salary Calculation Methods
Calculating salaries accurately and reasonably not only helps businesses comply with the law but also motivates employees to work more efficiently. Below are the most common salary calculation methods, along with specific formulas for you to apply in your business.
Time-Based Salary Calculation
The time-based salary calculation method is the most common and straightforward in companies with stable and relatively unchanged jobs. Employees’ salaries are calculated based on the standard working days or the actual hours worked within a month.
Formula for time-based salary calculation:
Monthly salary = (Basic salary + Allowances) / Standard working days * Actual working days.
This method is easy to calculate and manage, but it may lack flexibility in motivating employees to improve their work productivity.
Product-Based Salary Calculation
Product-based salary is one of the most effective methods in manufacturing industries. The salary is calculated based on the number of products completed or the quality of work performed by the employee. This method encourages employees to increase productivity and product quality.
Formula for product-based salary calculation:
Product salary = Number of products x Price per product.
Revenue-Based Salary Calculation
Revenue-based salary is a method used to incentivize sales employees and those involved in revenue generation. Their salary depends on the percentage of revenue they achieve.
Formula for revenue-based salary calculation:
Revenue salary = Personal or group revenue achieved x Revenue-based salary policy.
Agreement-Based Salary Calculation
This salary calculation method is determined by the employment contract between the employer and the employee. Items such as salary, bonuses, and allowances are agreed upon before signing the contract.
Formula for agreement-based salary calculation:
Salary = Agreement between the employer and the employee.
Notes on Salary Calculation for Employees
When calculating salaries, businesses need to ensure compliance with regulations regarding insurance, taxes, and allowances. These factors not only affect employee benefits but also impact the legality of the business.
Accurately calculating salaries and complying with the regulations on the basic salary and minimum regional salary is essential for both businesses and employees. It helps protect employee rights, ensures fairness, and maintains transparency in the workplace. Additionally, businesses should frequently update the latest regulations to avoid legal violations.
Choosing the appropriate payment method based on the nature of the job will help businesses optimize personnel costs and create motivation for employees. Moreover, applying flexible and accurate salary calculation methods will improve work efficiency and create stability in the company.
For any inquiries, contact Wacontre Accounting Services via Hotline: (028) 3820 1213 or email info@wacontre.com for prompt assistance. With a team of experienced professionals, Wacontre is committed to providing dedicated and efficient service. (For Japanese clients, please contact Hotline: (050) 5534 5505).
