Payroll calculation


Wages are always a matter of top concern to businesses. So how to calculate salaries in accordance with the laws of Vietnam, please follow the following article.


Base salary of 2020


According to Resolution No. 86/2019/QH14 of the National Assembly, the base salary will be adjusted to increase by VND 110,000/month from July 1, 2020. In particular, the base salary increase from VND 1,490,000 million / month to VND 1,600,000 / month from July 1, 2020. Pensions, social insurance subsidies, monthly subsidies for subjects guaranteed by the State budget and preferential subsidies, people with remuneration with revolution also increased according to the increase in base salary.

However, this year due to the negative impact of the Covid-19 epidemic on the economic, social situation and the state budget balance, the base salary has not been adjusted since July 1, 2020.

Currently, the base salary is still applied is VND 1,490,000/month as prescribed in Decree No. 38/2019/ND-CP of May 9, 2019 and the pension adjustment level, social insurance subsidies and monthly subsidies are applying as prescribed in the Government's Decree No. 44/2019/ND-CP of May 20, 2019.

Regional minimum wage of 2020


The regional minimum wage applied from 01/01/2020 increases from VND 150,000 – VND 240,000/month depending on each region, specifically as follows:

– Employees working in enterprises operating in Region I: VND 4,420,000/month

– Employees working in enterprises operating in Region II: VND 3,920,000/month

– Employees working in enterprises operating in Region III: VND 3,430,000/month

– Employees working in enterprises operating in Region IV: VND 3,070,000/month

The regional minimum wage is the lowest level as a basis for enterprises and employees to agree and pay salaries, in which the salary paid to employees working under normal working conditions, ensuring sufficient normal working hours during the month and completing the agreed work must ensure :

a) Not lower than the regional minimum wage for employees doing the simplest jobs;

b) At least 7% higher than the regional minimum wage for employees doing jobs requiring employees who have passed vocational training or training.


Currently, there are 5 forms of salary payment including: Pay by time, products, Salary, by revenue, as agreed between the two parties. With each form of pay, there is a different way of calculating salaries.


Form of pay over time:

Time-based payroll is a form of paying employees according to working time such as: hourly, daily or monthly.

In fact, there are 2 ways of calculating salaries in enterprises as follows:

Way 1: Monthly salary = (Salary + Add-on) / standard working day of the month * actual number of working days

In this way, the monthly salary of the employee will usually be a fixed number, only reduced if the employee has paid leave, the deductible amount for each day of paid leave is equally fixed, how many days the employee is deducted and vice versa, the month of working full working days will enjoy the full salary according to the salary according to as prescribed by the enterprise.

Way 2: Monthly salary = ((Salary + Additives if any)/26) * actual working day

According to this calculation, the monthly salary of employees is no longer a fixed figure because of different monthly standard working days, for example, the month with months of 28, 30, 31 days will have the standard month of 24 days, 26 days or 27 days, respectively.

With this way of paying wages, when workers take paid leave, they should consider which months to take leave so that their income has the least impact, but this can affect the production and business situation of the business when many employees massively choose to take time off in the months with large public holidays to reduce the deductible wages.

Therefore, monthly salary calculated in the 2nd way is unstable for employees. These two payroll calculations will result in two different salary results. The calculation of salary in which way the enterprise will be clearly shown on the labor contract or in the company's salary regulations.

Form of pay by product

It is a form of calculating the pay of employees according to the quantity and quality of products or jobs that the employee has completed. This form of pay is closely tied to labor productivity, this form contributes to encouraging employees to improve labor productivity, contributing to increasing products and product quality for businesses.

Product salary = Quantity of products made x Unit price of one product

Form of payment of Stock Salary:

Payment of salary is a way to pay salaries when employees complete the workload as required by the enterprise.

Salary = Security salary * percentage of work completion

Form of salary payment by revenue:

It is a form of pay that the employee's income depends on the sales achieved according to the sales target and the company's sales salary policy. This form usually applies to sales staff, sales staff … departments directly related to revenue.

Forms of salary by revenue include: Salaries based on individual sales achieved in the month, according to the group's sales achieved and other forms of business bonuses.

Form of agreed salary payment

It is a form of salary payment as agreed on the salary term between the two parties signing the labor contract. It can be monthly, weekly, daily, hourly, or if paying for many months, the monthly salary is paid according to the workload worked in the month.

Above is the latest way to calculate salary in 2020 you can refer to. To find out more information about the provisions of salary law, you can see here!