What is the 13th-month salary? A guide to calculating the 13th-month salary.

Is the 13th-month salary the same as the Lunar New Year bonus?

In fact, current legal documents do not contain specific regulations regarding the 13th-month salary.

The 13th-month salary is an agreed-upon payment between the employer and the employee and is not mandatory. Many employment contracts include a clause specifying a 13th-month salary, while others do not.

If the employment contract includes a provision for a 13th-month salary, the employer is obligated to pay this amount.

However, the 13th-month salary can be understood as a payment made by the employer to the employee at the end of the year. The amount of the 13th-month salary will depend on the regulations of each company (usually it is equal to the employee's monthly salary).

Therefore, in essence, the 13th-month salary is not the same as a Tet bonus. A Tet bonus is a bonus awarded by the employer to employees when the company or business has good business results or when the employee has excellently completed their assigned tasks.

The 13th-month salary is not included in the calculation of social insurance contributions because it is based on a bonus.

The thirteenth-month salary is taxable income, therefore employees are subject to personal income tax as prescribed.

The month in which the 13th-month salary is paid determines the month in which the personal income tax for the employee is calculated.

Are employees on maternity leave entitled to a 13th-month salary?

According to regulations, if your company has a policy regarding the payment of 13 months' salary and the employee meets the eligibility requirements, then female employees on maternity leave are still entitled to receive their 13th month's salary.

Is it mandatory for businesses to give New Year's bonuses to their employees?

According to Article 104 of the 2019 Labor Code regarding bonuses, the following provisions apply:

"Reward"

1. Bonuses are sums of money, assets, or other forms of reward that employers give to employees based on production and business results and the level of job performance of the employees.

2. The bonus regulations are decided by the employer and publicly announced at the workplace after consulting with the employee representative organization at the workplace, if such an organization exists.

According to the regulations, employers are not obligated to give New Year's bonuses to their employees. The decision to award New Year's bonuses will depend on the company's production and business performance.

Will businesses be required to give Tet bonuses to their employees for the Lunar New Year 2025?

According to the regulations, businesses are not obligated to give Tet bonuses to their employees. Whether or not to give Tet bonuses depends on the company's business performance and the employees' productivity.

At the same time, according to the above regulations, employers are not obligated to give Tet bonuses in cash to employees. Instead, employers can reward employees with Tet bonuses in other forms or in the form of assets.

If a company has a policy for Tet bonuses for employees but fails to implement it, will it be penalized?

Although bonuses for both the Gregorian and Lunar New Year are not mandatory, in cases where businesses have a bonus policy (clearly specifying the circumstances under which employees are entitled to bonuses) and make it public to employees, the business must pay bonuses to employees in accordance with the company's bonus policy.

According to regulations, if a company fails to pay New Year's bonuses to employees as agreed in their labor contracts, it will be fined between 10,000,000 VND and 100,000,000 VND, depending on the number of employees who were not paid as agreed.

At the same time, the company is required to pay the full New Year's bonus plus interest on the overdue bonus amount to employees, calculated at the highest interest rate for demand deposits published by state-owned commercial banks at the time of the penalty.

The law allows businesses to reward employees with money or material goods, but they must publicly disclose the reward policy so that all employees are aware of it.

How should employers pay overtime wages to employees working during the Lunar New Year holiday?

Based on Article 98 of the 2019 Labor Code, the following is stipulated:

Overtime pay, night work pay
1. Workers who work overtime are paid based on the hourly wage rate or the actual wage paid for the work being performed as follows:
a) On weekdays, at least 150%;
b) On weekly rest days, at least 200%;
c) On public holidays, Tet holidays, and paid leave days, the compensation must be at least 300% of the regular wage, not including the holiday pay for employees paid on a daily basis.
2. Workers who work at night shall be paid at least 30% more than their regular daily wage or the actual wage paid for the work performed during a normal workday.
3. In addition to the wages stipulated in Clauses 1 and 2 of this Article, employees working overtime at night shall also be paid an extra 20% of their wages calculated based on the hourly wage rate or the wage for the work performed during the day on a normal working day, a weekly rest day, or a public holiday.
4. The Government shall provide detailed regulations for this Article.

Therefore, employees working on Lunar New Year 2025 will be paid at least 300% of their regular salary, not including holiday pay or paid leave for employees paid on a daily basis.

How is the 13th-month salary calculated?

You can refer to two commonly used calculation methods in businesses.

(1) Calculation of 13th month salary based on average salary

- For employees who have worked for 12 months or more:

13th-month salary = Average salary of 12 months

For example: Mr. A's salary from January 2024 to October 2024 was 10 million VND/month; from November 2024 onwards, it will be 12 million VND/month.

Therefore, his 13th-month salary is calculated as follows:

Average salary over 12 months = [(10 million VND x 10 months) + (12 million VND x 2 months)]/12 months = 10.3 million VND.

- For employees who have worked for less than 12 months:

13th-month salary = Number of working days in the year for bonus calculation / 12 x average salary calculated based on the employee's working time

Example: Ms. B has been working at company X since May 2024, and by the end of December 2024, that's 7 months, with a salary of 12 million VND/month.

Ms. B's 13th-month salary is calculated as follows: (7 months / 12 months) x 12 million VND = 7 million VND.

(2) How to calculate 13th month salary based on 12th month salary

To ensure the best interests of employees, many businesses calculate the 13th-month salary based on the 12th-month salary, specifically:

13th-month salary = 12th-month salary

Example: Mr. D worked from January 2024 to November 2024 with a salary of 12 million VND. From December 2024, his salary was increased to 14 million VND.

Therefore, Mr. D will receive a 13th-month salary of 14 million VND.

Quoc Duan