The most detailed way to calculate probationary salary

How to calculate probationary wages is an important issue that both employees and employers need to understand to ensure compliance with legal regulations. When starting a new job, understanding how to calculate wages during the probationary period helps employees protect their rights and have appropriate expectations. For businesses, applying the correct method of calculating wages not only complies with the law but also builds a transparent and fair working environment. 1C Vietnam will guide you on how to calculate probationary wages most fully and accurately.

1. What is probationary salary and why is it important to understand it?

Probationary salary is the amount of money an employer pays an employee during the probationary period, usually applied before signing an official labor contract.

1.1. Definition of probationary salary under Vietnamese law

According to Article 26 of the 2019 Labor Code, the probationary salary is the salary agreed upon between the employer and the employee during the probationary period, but must be at least 85% of the salary for that job. The probationary period is stipulated to not exceed 180 days for management jobs, 60 days for technical jobs with college degrees or higher, 30 days for other jobs and 6 working days for simple jobs.

During the probationary period, employees are still entitled to basic benefits according to the law, including social insurance, health insurance and unemployment insurance if the probationary period is 1 month or more.

1.2. The role of probationary salary in labor relations

Probationary salary plays an important role in the relationship between employees and businesses with many essential aspects:

• Protect workers' rights and ensure basic income in the early stages of employment
• Motivate employees to demonstrate their abilities during the probationary period
• Help businesses evaluate employee performance fairly
• Establish transparent labor relations, creating a foundation for long-term commitment
• Ensure compliance with labor and wage laws

2. Legal regulations on how to calculate probationary salary

The calculation of probationary salary must comply with specific regulations of Vietnamese labor law to ensure the rights of employees.

2.1. Regulations on regional minimum wages

The regional minimum wage is an important basis for calculating probationary wages, divided according to regions with different socio-economic conditions:

• Region I (districts of Hanoi, Ho Chi Minh City, Hai Phong, Dong Nai,...): Highest minimum wage
• Region II (provincial cities, some developed districts): Minimum wage is lower than region I
• Region III (towns, townships and some other areas): Minimum wage is lower than region II
• Region IV (remaining regions): Lowest minimum wage

When applying to probationary salary, enterprises must ensure that the probationary salary is not lower than 85% of the official salary, and at the same time must not be lower than the corresponding regional minimum wage.

2.2. Cases of overtime and night work during the probationary period

During the probationary period, if employees work overtime or work at night, they are still entitled to the following allowances:

It is important that all these overtime allowances are calculated based on the probationary salary, not the official salary.

3. Standard formula for calculating probationary salary

To accurately calculate probationary salary, employees and businesses need to apply the formula in accordance with current regulations.

3.1. Basic formula

The basic formula for calculating probationary salary is shown as follows: Ltv = Lct × 85%

• Ltv: Probationary salary
• Lct: Official salary
• 85%: Minimum rate as prescribed

In some cases, businesses can apply a rate higher than 85%, or even pay 100% of the official salary during the probationary period to attract talent.

3.2. Detailed illustrative example

Here is a specific example to better understand how to calculate probationary salary:

An employee is officially agreed upon a salary of 10,000,000 VND/month. According to regulations, the probationary salary will be calculated as follows:

Probationary salary = 10,000,000 VND × 85% = 8,500,000 VND/month

If an employee works 8 hours overtime on a weekday during the month, the overtime allowance will be calculated:

• Probationary hourly wage = 8,500,000 ÷ (22 days × 8 hours) = 48,295 VND/hour
• Overtime allowance = 48,295 × 150% × 8 hours = 579,545 VND

Total probationary income = 8,500,000 + 579,545 = 9,079,545 VND

4. Factors affecting probationary salary

In addition to the basic formula, there are many other factors that affect the actual income of employees during the probationary period.

4.1. Allowances and bonuses during probation period

During the probationary period, employees may receive certain allowances and bonuses depending on the policies of each company:

• Lunch allowance: Usually fully applied as official employees
• Travel and gas allowance: May be paid in part or in full.
• Phone and internet allowance: Applicable for positions requiring frequent communication
• Performance Bonus: Based on work results, even during probation period
• Project Bonus: Applied when probationary employees participate and contribute to the project

These allowances and bonuses are not required by law but are important factors in motivating employees during the probationary period.

4.2. Personal income tax and social insurance

Probationary salary is also subject to mandatory deductions as prescribed:

Regarding personal income tax (PIT): If an employee's taxable income exceeds VND 11 million/month (after deducting family allowances and compulsory insurance), the employee will have to pay PIT according to the progressive tax schedule.

Regarding social insurance (SI): According to the latest regulations, if the probationary period is 1 month or more, both the employer and the employee must pay SI, HI and UI at the prescribed rates:

• Employees pay: 8% social insurance, 1.5% health insurance, 1% unemployment insurance
• Employer pays: 17.5% social insurance, 3% health insurance, 1% unemployment insurance

These contributions are calculated on the probationary salary, not the official salary.

5. How to negotiate probationary salary effectively

Negotiating probationary salary is an important process to help employees get a reasonable and fair salary.

5.1. Suggestions for employees when negotiating

When negotiating probationary salary, employees should note the following points:

• Research the salary market for similar positions carefully before the interview.
• Clearly demonstrate your abilities, experience and the value you can bring to the business
• Provide reasonable salary expectations based on market and individual capabilities
• Discuss the possibility of paying 100% of official salary during probation period instead of just 85%
• Clarify allowances, bonuses and benefits during probation period
• Suggest shorter probation period if more experience in similar field

5.2. Business strategy to build attractive salary policy

From the business side, building an attractive probationary salary policy brings many benefits:

Applying a probationary salary higher than the minimum of 85% helps businesses attract talent and create motivation to work right from the beginning. Many companies, especially in the IT, finance or marketing fields, are applying a policy of paying 100% of salary during the probationary period to attract high-quality candidates.

An attractive probationary salary policy also helps reduce the rate of resignation after the probationary period, saving recruitment and retraining costs. This is also a way to demonstrate a corporate culture that values talent and creates a fair working environment.

6. Automatic salary calculation and management support tool

Applying automation tools makes the process of calculating probationary salary more accurate and efficient.

6.1. Introducing effective calculation tools

Currently, there are many tools to support businesses and employees in calculating probationary salary:

• Sample Excel Spreadsheet: Pre-designed formulas for calculating probationary salary according to regulations
• Human resource management software: Automate the entire payroll process, including probationary pay
• Payroll mobile application: Helps employees easily check their probationary salary
• Integrated payroll management system: Connecting HR, timekeeping and payroll information

These tools save time, reduce errors, and increase transparency in the probationary salary calculation process.

6.2. Benefits of automation tools for businesses and workers

Using automation tools brings many benefits:

• Significant time savings for both businesses and employees
• Ensure high accuracy, avoid errors in calculation process
• Increase transparency, help employees easily check salary information
• Standardize salary calculation process in accordance with legal regulations
• Easily updated when there are changes to salary, tax or insurance policies
• Integrate complex elements such as overtime, allowances and deductions

7. Frequently asked questions about probationary salary (FAQs)

7.1. Are employees required to pay 100% of their probationary salary?

No. By law, the probationary salary must be at least 85% of the salary for that job. However, employees can negotiate a higher salary if they have special experience or skills. Whether or not they are paid 100% depends on the agreement between the two parties.

7.2. Does the probationary salary include allowances?

Yes. According to the Labor Code, probationary salary includes basic salary and may include allowances. Allowances such as lunch, travel, telephone... are usually fully applied as for official employees, depending on the policy of each enterprise.

7.3. Which industries usually apply the full probationary salary policy?

Industries such as information technology (IT), finance - banking, digital marketing, research and development (R&D), and senior management positions often apply the policy of paying 100% of salary during the probationary period to attract talent.

7.4. Comparison between regional minimum wage and actual wage during probation period

The regional minimum wage is the lowest that a company must pay its employees, while the actual salary during the probationary period is often much higher, especially in large cities and industries that require highly specialized skills. For example, the minimum wage in region I (Hanoi, Ho Chi Minh City) may be only about 4-5 million VND/month, while the actual probationary salary for a software engineer can be from 15-20 million VND/month.

The method of calculating probationary salary plays an important role in ensuring the rights of employees and creating a fair and transparent working environment. By complying with the law on the minimum wage of 85%, and applying the correct regimes on allowances, bonuses and insurance, businesses not only fulfill their legal obligations but also build a professional image and attract talent.