In every business, establishing a clear and transparent salary policy is crucial to ensuring fairness in the payment of salaries, bonuses, and allowances to employees. A well-defined salary policy not only helps businesses comply with legal regulations but also serves as a vital tool for motivating employees, enhancing work performance, and fostering a fair working environment. This article provides detailed information on the latest salary and bonus policy template for 2025, along with relevant regulations and methods for calculating salaries, bonuses, and allowances—helping you develop a compliant and effective compensation system within your organization.
1. What Is a Salary Policy?
A salary policy is a set of internal regulations established within a company that governs and outlines the processes related to the payment of salaries, bonuses, allowances, and other employee benefits. It is a crucial tool for ensuring fairness and transparency in salary administration while maintaining compliance with labor laws. The salary policy is an indispensable component of both human resource and financial management within an organization.
Purpose and Importance of a Salary Policy
The main goal of developing a salary policy is to ensure a fair, transparent, and reasonable compensation system for all employees. A well-defined salary policy not only helps the company comply with legal wage regulations but also serves as a key motivator for employees. When employees clearly understand their rights and compensation, they feel secure, which enhances work efficiency and promotes healthy labor relations between staff and the company.
Essential Elements of a Salary Policy
To ensure fairness and reasonableness, a salary policy should include the following core components:
- Basic Salary: The amount paid to an employee under normal working conditions, excluding any allowances, bonuses, or additional support.
- Allowances: Supplemental payments to support employees, which may include lunch allowances, travel or fuel subsidies, phone allowances, responsibility allowances for managerial roles, or other forms of support.
- Bonuses: The policy should clearly define various types of bonuses such as revenue-based bonuses, year-end bonuses, performance bonuses, innovation bonuses, or other forms of incentive pay.
- Welfare Benefits: Includes provisions for paid leave, social insurance, sick leave support, bereavement or wedding gifts, accident support, or other special benefits.
How Does the Salary Policy Affect Employees?
A salary policy is not just a cost control tool for the business—it also serves as a foundation to protect employee rights. When the policy is public, clear, and fair, it builds transparency and trust between employees and the company. Employees feel more secure when they know their exact salary, allowances, and bonuses, and when they feel they are being treated fairly compared to their colleagues.
Benefits of a Salary Policy for Businesses
A well-structured salary policy brings practical benefits for both employers and employees:
- Reduces Conflict: Clear salary rules help minimize disputes over wages, as all details are predefined and publicly communicated.
- Boosts Work Performance: When employees feel that their pay reflects their effort and contributions, they are more motivated to perform well.
- Legal Compliance: A salary policy ensures that the business adheres to labor laws related to wages, bonuses, allowances, and employee entitlements, thus avoiding legal risks.
- Enhances Employee Satisfaction: A fair salary structure contributes to a professional, equitable, and friendly workplace environment.
2. Latest Salary and Bonus Policy Template for 2025
A comprehensive and detailed salary and bonus policy template serves as a critical foundation for maintaining transparency and fairness in employee compensation. Not only does it ensure compliance with labor laws, but it also acts as a key motivational tool, encouraging employees to contribute their best efforts to the company. Below are the key regulations included in the latest 2025 salary and bonus policy template.
Regulations on Basic Salary and Allowances
In the 2025 salary policy template, basic salary is defined as the amount an employee receives for working under normal conditions. The basic salary may be adjusted according to the regional minimum wage and is based on the nature of the job and the employee’s position within the company.
- Base Salary: This is the salary paid to an employee for working under standard conditions, fulfilling agreed work hours and responsibilities. The base salary is clearly stated in the labor contract and may be adjusted according to the company’s business and production performance indicators.
- Allowances: In addition to the base salary, employees are entitled to various allowances. Common types of allowances include:
- Responsibility Allowance: For positions such as department heads, directors, or other management roles.
- Lunch Allowance: Provided to all long-term employees.
- Transportation and Phone Allowance: Typically for positions requiring frequent travel or communication.
- Position Allowance: Applied to higher-responsibility roles, such as managers or directors.
Regulations on Bonuses and Welfare Benefits
No salary policy is complete without regulations on bonuses and welfare benefits. Bonuses play a crucial role in motivating employees to perform effectively and contribute to the company’s growth.
- Performance-Based Bonuses: Awarded annually based on the company’s business results and the individual’s contributions.
- Achievement Bonuses: Given to individuals or departments with outstanding performance.
- Year-End Bonus: A portion of the company’s profits may be distributed to all employees depending on business performance.
Welfare benefits typically include support in special cases, such as:
- Paid Leave: Employees are entitled to paid leave as per policy.
- Health and Maternity Support: Financial support provided in cases of illness or maternity leave.
- Life Events Support: Financial assistance for weddings, childbirth, or bereavement.
Common Allowances in the Salary Policy
One highlight of the 2025 salary and bonus policy template is the detailed specification of allowances. These not only increase employee income but also reflect the company’s care for their well-being. Common allowances include:
- Lunch Allowance: Provided to all long-term employees to help offset daily meal costs.
- Travel Allowance: Given to employees who frequently travel for work, covering transportation expenses.
- Phone Allowance: For employees whose work requires frequent phone communication.
- Position Allowance: Offered to employees in senior positions to fairly compensate their responsibilities.
How Salaries, Bonuses, and Other Supports Are Calculated
The 2025 salary and bonus calculation is based on several factors, with workdays and allowances playing a key role in determining the final amount.
- Base Salary Calculation:
Actual Base Salary = (Basic Salary + Allowances) × Actual Working Days ÷ 26 - Bonus: Calculated based on the company’s financial performance, individual contributions, and targets such as revenue or output. The year-end bonus depends on company profit and may vary based on financial conditions.
- Other Support Payments: In addition to salaries and bonuses, employees may receive additional financial support for health issues, maternity leave, personal life events, or business travel expenses.
3. Forms of Salary Payment and Allowances in the Salary Policy
Each business has different requirements and job characteristics, so choosing the appropriate form of salary payment is essential. These payment methods not only help businesses manage costs more effectively but also motivate employees. A salary policy should clearly define the forms of salary payment and associated allowances to ensure fairness and work efficiency.
What is Time-Based Salary Payment?
Time-based salary payment is a method of paying employees based on the number of hours or days they actually work within a given period, usually monthly. This method is commonly used in companies with stable work structures that do not require high output or performance metrics. Salaries are calculated based on the actual working hours or days.
Advantages of this method include ease of management and payroll calculation, as well as allowing flexibility in employees’ working hours. However, a limitation is that it may not encourage high productivity, as pay is not directly tied to specific work results.
Formula for calculating time-based salary:
Monthly Salary = (Basic Salary + Allowances) / Standard Working Days × Actual Working Days
What is Product-Based Salary Payment?
Product-based salary payment is a method where salary is calculated based on the quantity and quality of products produced or tasks completed by the employee during a specific period. This form is common in manufacturing, processing, or industries where output can be measured. Employees are paid according to the number of products they complete each month or pay period.
This method encourages higher productivity, as employees earn in proportion to the quantity and quality of their output. However, for it to be effective, the company must implement a clear and fair performance measurement system.
Formula for product-based salary:
Product-Based Salary = Number of Products × Unit Price per Product
What is Contract-Based Salary Payment?
Contract-based (lump-sum) salary payment is based on a predefined amount paid for completing a specific job or task, regardless of how long it takes. It is typically used for clearly defined work volumes, such as special projects or jobs without fixed hours.
This form reduces the need for close supervision and motivates employees to complete tasks efficiently. However, if not managed well, it may result in inconsistent work quality, as employees may focus more on finishing quickly rather than thoroughly.
Formula for contract-based salary:
Lump-Sum Salary = Fixed Payment per Job × Job Completion Rate
Other Bonuses and Allowances in the Salary Policy
In addition to base salary, bonuses and support allowances are vital components of a company’s salary policy. These additional payments motivate employees to perform well and contribute to the company’s overall success.
Performance Bonuses
These are awarded to individuals or teams who achieve outstanding results. Employees may receive bonuses for increasing revenue, improving quality, or meeting targets set in the company’s strategic plan. Performance bonuses provide recognition and motivation to strive for further achievements.
Revenue-Based Bonuses
These bonuses are tied to the company’s business results. Employees—especially those in sales or roles with revenue targets—may receive a percentage of the revenue they generate. Bonus levels depend on actual revenue and individual contributions.
Business Travel Allowances
For employees required to travel for work, companies provide allowances for meals, transportation, and lodging. These reimbursements vary depending on location and trip duration. Business travel allowances reduce out-of-pocket expenses for employees and are part of the company’s welfare policy.
Read more: Complete Guide on the Latest Salary Calculation Methods
4. How to Build a Legally Compliant Salary Policy
Establishing a reasonable and legally compliant salary policy is crucial—not only to ensure fairness in employee compensation but also to protect employee rights and minimize legal risks. A salary policy must be detailed and clear to avoid misunderstandings or disputes regarding salary, bonuses, allowances, and other benefits.
What Should a Salary Policy Include?
A legally sound salary policy should be comprehensive and include the following elements:
- Applicable Subjects: The policy must clearly define who it applies to—for example, all employees, probationary staff, full-time contracts, part-time staff, or other labor categories.
- Basic Salary: Clearly define the basic salary for each role or title within the company. This should be based on job position, employee qualifications, and experience.
- Types of Allowances: Specify all types of allowances or subsidies employees may receive, such as lunch allowance, transportation or fuel allowance, position allowance, or travel allowance.
- Bonuses: Clearly outline bonus types, such as performance bonuses, revenue-based bonuses, year-end bonuses, innovation bonuses, and others.
- Welfare Benefits: Include details on employee welfare such as paid leave, public holidays, social insurance, health insurance, and other applicable benefits.
Key Legal Provisions in a Salary Policy
To ensure compliance with labor regulations, your salary policy must include these critical legal components:
- Minimum Wage Compliance: Ensure that the policy aligns with regional minimum wage laws as per Decree 38/2022/NĐ-CP. These minimum wages vary by location and are reviewed periodically.
- Social Insurance and Personal Income Tax: Salary, bonuses, and allowances must comply with laws on social insurance and personal income tax as stated in the Labor Code and relevant government decrees.
- Leave and Public Holidays: Clearly specify annual leave entitlements and official public holidays, in accordance with the Labor Law and national calendar.
- Employee Rights Protection: Include clauses that safeguard employee rights, such as eligibility for periodic salary reviews, access to training programs, and full insurance and welfare benefits.
Important Considerations When Implementing a Salary Policy
To ensure your salary system is both reasonable and legally compliant, consider the following when implementing the policy:
- Clear and Full Disclosure: The salary policy must be communicated clearly to all employees so they understand their rights and responsibilities.
- Legal Updates: Regularly update the policy to reflect any changes in labor laws, government regulations, or company circumstances.
- Transparency in Calculations: Ensure transparency in how salaries, bonuses, and allowances are calculated. A clear reporting system can help prevent salary disputes.
- Timely Issue Resolution: Establish procedures to address and resolve any salary-related issues or conflicts promptly, protecting both employee and employer interests.
Salary Policy and Labor Law: Compliance and Responsibility
Your salary policy must fully comply with the Labor Code and regulations concerning wages, social insurance, and employee welfare. Legal compliance protects your business from risks and ensures employee rights are upheld. Furthermore, implementing a proper salary policy boosts your company’s reputation, promotes a fair and professional work environment, and helps attract and retain top talent.
In Summary:
Building and implementing a fair and legally compliant salary policy is a vital step for any business. It ensures both legal compliance and employee satisfaction, creating a transparent and positive work environment. Such policies motivate employees to perform their best and contribute to the sustainable development of the business.
If you need assistance in developing or updating your company’s salary policy, don’t hesitate to contact a professional accounting or HR service for accurate and timely advice.
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).
