-Daily salary: Based on the actual number of working days in a month and the daily salary to calculate salary, applied to employees during study time, meetings or other duties, and workers under short-term contracts.
Daily wage
= | Monthly salary Number of working days according to regulations |
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Purpose of Personal Income Tax Deferral.
-Hourly wage: is the wage paid for one hour of work, often applied to pay direct labor during non-piecework hours.
Hourly wage
= | Daily wage Number of working hours according to regulations |
-Daily wage: Is a form of payment based on working days and daily wages paid to temporary workers without a salary scale. Applicable to temporarily recruited workers. This wage is agreed upon by the employee and the employer.
*Pay on time with bonus
The essence of this form is the combination of simple time wages with bonuses when meeting and exceeding specified targets such as: Saving labor time, saving materials, increasing labor productivity, etc.
Salary = Simple Time Wage + Bonus
*Advantages and disadvantages of time-based salary: Easy to do, easy to calculate but does not ensure the principle of labor distribution because this form does not fully take into account the quality of labor, does not fully promote the available capacity of workers. Therefore, to overcome these limitations, in addition to the organization needs to monitor and record the full working time of employees,
Businesses need to regularly check the work progress and quality of employees' work combined with a reasonable reward system.
1.1.5.2 Piece-rate wage
Under this form, wages are paid to employees based on work results, quantity and quality of completed work products and services, and the unit price of wages for a unit of product, work, and service.
product
Product salary= | Product weight work done | * | Salary unit price product |
Compared with the time wage form, the product wage form has more advantages. That is, it fully implements the principle of paying wages according to quantity and quality of labor, closely linking income from wages with results.
Depending on the relationship between workers and work results, depending on management requirements for improving product quality, rapidly increasing products and product quality, businesses can implement the following forms of product wages:
*Unlimited direct piece rate wages.
This form of salary is mainly applied to direct production workers based on the number of products they have produced and the unit price of each product unit.
Wages payable = Actual output * Unit price of product wages
*Indirect product wages.
This is the salary paid to the auxiliary workers who participate in the production process with the main workers (workers transporting raw materials, finished products, maintaining machinery and equipment) who are paid according to the product, determined based on the coefficient between the salary level and the product produced. However, this method of payment has
Limitation: Due to the dependence on the production results of the main worker, the salary payment is not accurate, not really ensuring the correct labor cost that the auxiliary worker has spent.
*Salary based on product with bonus
This is a combination of direct product salary with bonus when employees exceed specified targets such as saving materials, improving product quality, etc.
*Progressive piece rate wages
Wages paid to workers are based on the quantity of products produced at two different unit prices: fixed unit price for products within the prescribed level and progressive unit price for products exceeding the standard.
This form has the effect of encouraging increased labor productivity, so it is often applied in important stages where increasing labor productivity has the effect of promoting increased productivity in different stages during the business campaign to solve the prescribed deadline in time... However, this method of paying wages can easily lead to the possibility that the average wage increase rate is faster than the increase rate of labor productivity. Therefore, when production is stable, the above conditions are no longer necessary, then switch to the normal form of wages.
1.1.5.3 Piece rate salary
*Work assignment
Under this form, the enterprise determines the salary level for each job or the amount of work completed. Based on this salary level, employees can calculate their salary through the amount of work they have completed.
=
Salary specified for each job | * | Amount of work completed |
Piece rate pay
This method of payment applies to simple, ad hoc jobs such as loading and unloading goods, house repairs, etc.
*Salary fund
In this form, employees know in advance the amount of salary they will receive after completing the work and the time to complete the assigned work. Based on the volume of each job or product volume and the time required to complete, the enterprise proceeds to allocate the salary fund.
Paying wages by lump sum is applied to jobs that cannot be standardized for each part of the job or jobs that are not economically beneficial to assign each detailed job, usually jobs that need to be completed on time.
Advantages: Paying wages this way gives employees the initiative in arranging and carrying out their work, thereby saving time to complete assigned work. As for the contractor, they can rest assured about the completion time.
The disadvantage of this method of payment is that it can easily lead to sloppy work and poor quality due to the desire to ensure product delivery time. Therefore, product acceptance must be carried out strictly.
*Income contract
Enterprises implement income contracts for employees, which means that the income that the enterprise must pay to employees is a part of the total income of the enterprise. For enterprises applying this form of salary payment, the salary to be paid to employees is not included in the expenses.
production costs but are a part of the distribution of business income.
Through the Workers' Congress, the enterprise agrees in advance on the income ratio used to pay salaries to employees. Therefore, the employee's salary depends on the actual income of the enterprise. In this case, the time and results of each employee are only the basis for dividing the total salary fund for each employee.
This form of salary payment forces employees to care not only about their own work results but also about the results of all production and business activities of the enterprise. Therefore, it promotes collective strength in all stages of the production and business process. However, employees are only assured with this form of salary when they have the authority to check the financial results of the enterprise, so this form of salary payment is often most suitable for joint stock enterprises whose shareholders are mainly employees of the enterprise.
1.2 Bonus, allowance, personal income tax.
1.2.1 Bonus mode
Bonus is a material incentive income that has a very positive effect on employees in striving to perform their work tasks better.
There are two types of bonuses:
-Bonus in production and business (regular): This form is of salary nature, this is essentially a part of the salary fund separated to pay employees in the form of bonus for a certain criterion set by the business.
-Competition bonus (not regular): This is a bonus after advanced labor competitions, when employees have special achievements. Bonus type
This does not depend on the salary fund but is deducted from the bonus fund, this amount is paid in the form of classification in a period.
1.2.2 Allowance
Salary allowance is a labor remuneration in addition to the basic salary. It supplements the basic salary, compensating the employee when they have to work in unstable or unfavorable conditions that are not taken into account when determining the basic salary.
- Responsibility allowance: To compensate those who are directly involved in production, do professional work and also hold management positions that are not part of the appointed leadership position or those who do work that requires high responsibility that is not specified in the salary. Responsibility allowance is calculated and paid together with monthly salary.
-Attraction allowance: Applicable to employees working in new economic zones and remote islands with particularly difficult living conditions due to lack of infrastructure affecting the material and spiritual life of employees.
-Other allowances: Additional allowances for employees such as toxic allowances, position allowances, regional allowances, 3rd shift meal allowances, etc.
1.2.3 Personal income tax (PIT)
*Concept
Personal income tax is a direct tax levied on the income of each individual in society, within a certain period of time (usually 1 year). Personal income tax is levied on both business and non-business individuals. This tax is often considered a special tax because it takes into account the circumstances of individuals with taxable income through determining tax exemptions and reductions...
*Function and role of personal income tax
-Contribute to increasing revenue for the state budget.
-Contribute to social justice.
*Taxpayers
Individuals who are Vietnamese citizens living in the country or working or studying abroad, other individuals residing in Vietnam with income that is taxable according to the law are all subject to personal income tax. Other individuals residing in Vietnam are those who do not have Vietnamese nationality but reside indefinitely in Vietnam, foreigners working in Vietnam with taxable income arising in Vietnam.
*Taxable income from salaries and wages
Income that employees receive from their employers in the form of money or non-money.
- Salaries, wages and amounts of the nature of salaries and wages.
- Allowances and subsidies, including living expenses, that employees receive, except for certain allowances and subsidies as prescribed.
-Remuneration received in the form of: brokerage commission, participation in projects, proposals, royalties...
-Money received from participating in associations, organizations, boards of directors, etc.
-Other benefits, in cash or in kind, that employees receive in addition to salary and wages, such as housing, telephone, etc.
-Bonuses such as monthly, quarterly, annual, special bonuses, 13th month salary bonuses (including stock bonuses)
*Tax basis
The basis for calculating tax on salary and wage income is taxable income and tax rate.
a. Taxable income: is determined by taxable income minus the following amounts:
-Compulsory insurance contributions
-Family deductions
-Contributions to charity funds, humanitarian funds, and education promotion funds
b. Time to determine taxable income : Is the time when the organization or individual pays income to the taxpayer.
c. Tax rate: Applied according to the progressive tax schedule
Tax level
Taxable income/year (million VND) | Taxable income/month | Tax rate (%) | |
1 | Up to 60 | Up to 5 | 5 |
2 | Over 60 to 120 | Over 5 to 10 | 10 |
3 | Over 120 to 216 | Over 10 to 18 | 15 |
4 | Over 216 to 384 | Over 18 to 32 | 20 |
5 | Above 384 to 624 | Over 32 to 52 | 25 |
6 | Above 624 to 960 | Over 52 to 80 | 30 |
7 | Over 960 | Over 80 | 35 |
d. Tax calculation
The total tax is calculated according to each income level and corresponding tax rate, in which the tax calculated according to each income level is determined by multiplying taxable income by the corresponding tax rate of that income level.