Allowance Policy and Other Additional Payments in Wages

Aug 27, 2024

HR & Payroll

Allowance Policy and Other Additional Payments in Wages

Table of Contents

Introduction

Wages include the basic wage according to the job or title, wage allowances, and other additional payments.

The wage allowance system significantly complements the job- or title-based wage system. The State’s regulations within this system ensure that all irregular and unstable factors in working and living conditions are adequately addressed, not fully considered in wage determination.

Allowances as agreed by the contracting parties

Allowances to compensate factors such as working conditions, job complexity, employee’s life, and employment attraction that the base salary agreed under the employment contract fails to take into account or sufficiently take into account;
Allowances are associated with the job process and employee performance.

(Point b, Clause 5, Article 3 of Circular 10/2020/TT-BLĐTBXH)

Wage allowance system

Regional Allowance

This allowance compensates individuals working in regions with adverse climates, remote and isolated areas, and challenging commutes. It’s based on geographical factors and administrative boundaries of remote and isolated regions.

Attraction Allowance

This allowance incentivizes public employees, civil servants, and workers in new economic zones, establishments, or remote islands. It’s calculated as a percentage of the base wage or wage based on rank or title. The allowance amount varies by conditions, and its duration depends on infrastructure development or improved living conditions.

Responsibility Allowance

Employees who combine production or professional duties with managerial responsibilities that aren’t officially recognized as leadership roles or fully reflected in their wages receive this allowance. The allowance compensates them based on the minimum wage and varies according to the nature or level of additional responsibilities.

Night Shift and Overtime Allowances

Night Shift Allowance: Compensates for increased labor costs due to physiological changes in night shift workers. The night shift allowance is calculated based on wage level according to specific rank or title, with differences for regular, shift-based, or occasional night work. The minimum allowance is 30% of the daytime wage.
Overtime Allowance: The company compensates overtime at least 150% of the standard hourly wage for regular day overtime, 200% for weekly rest day overtime, and 300% (excluding wages for holidays, Tet, and paid rest days) for holidays, Tet, or paid rest day overtime.

How to calculate overtime pay for national holidays?

Mobility Allowance

Workers in jobs or occupations requiring frequent relocation, leading to unstable living conditions, receive this allowance as compensation.

Hazardous and Dangerous Allowance

Workers in hazardous or dangerous working conditions, where the wage does not fully account for the risks, receive this allowance as compensation.

Leadership Allowance

Enterprises pay a leadership allowance to workers who perform professional tasks and hold appointed leadership positions. This allowance is calculated based on minimum wage and varies by organizational level, type, and classification.

In addition, employers and employees may agree on other additional payments within the wage system.

Other additional payments as agreed by the contracting parties

Additional payments with specific amounts in conjunction with the base salary agreed under the employment contract and to be paid regularly in every pay period;
Additional payments with non-specific amounts in conjunction with the base salary agreed under the employment contract and to be paid regularly or irregularly in every pay period, associated with the job process and performance of the employee.

(Point c, Clause 5, Article 3 of Circular 10/2020/TT-BLĐTBXH)

Bonuses

Regarding other regimes and benefits:

Bonuses under Article 104 of the Labor Code
Bonuses for initiatives
Mid-shift meals
Support for transportation, phone, travel, housing, child care, or minor child support
Assistance in case of death of a family member, marriage of a family member,
Employee’s birthday
Support for employees in difficult circumstances due to occupational accidents, occupational diseases
The labor contract should list these items separately for other support and allowances.

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Legal Disclaimer: The information provided is for general informational purposes only and does not constitute legal advice. For specific legal advice on compliance in Vietnam, schedule a consultation with NetViet or consult legal counsel.

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