What is 13th month salary? Regulations and calculation of 13th month salary

The 13th month salary is a bonus that many workers look forward to at the end of the year. So what is the 13th month salary? What are the regulations and how to calculate 13th month salary? Let's find out more details with 1C Vietnam in the content below.

1. What is 13th month salary?

The 13th month salary is an amount of money that some companies or organizations give to employees at the end of the year, usually around the year-end holiday or Lunar New Year. The 13th month salary is not part of the basic salary an employee normally receives every month, but is considered a bonus or additional benefit.

The main purpose of the 13th month salary is to show appreciation and encouragement for employees at work, and at the same time help them have additional financial resources during the year-end holidays, especially during special periods such as Tet. Lunar New Year.

Although current law does not have a specific definition of 13th month salary, it is also mentioned in some guiding documents of state agencies. For example, Official Dispatch 560/LDTBXH-BHXH dated February 6, 2018 of the Ministry of Labor, War Invalids and Social Affairs stipulates that employee bonuses are not the basis for calculating social insurance contributions, including the third month salary bonus. 13 and bonus according to annual performance evaluation. Thus, the 13th month salary is not a mandatory salary but just a bonus that businesses and organizations can pay to employees.

2. How is the 13th month salary calculated?

Employers reward employees based on their achievements, production and business results of the unit, and the level of job completion of the employee. Thus, the way to calculate the 13th month salary will depend on the regulations of each business and the agreement between the employee and the business.

Normally, the 13th month salary will be calculated based on one of the following two ways:

Method 1:

13th month salary = Salary x Time coefficient x Personal efficiency coefficient x Business efficiency coefficient

In there:

• Salary: December salary does not include allowances.
• Time coefficient: Over 6 months of work is counted as 1.
• Individual efficiency coefficient: Proposed by the department head and approved by the Board of General Directors.
• Business efficiency coefficient: Decided by the board of directors.

Method 2: Based on the employee's 12-month average salary

13th month salary = Average 12 month salary

The average 12-month salary is calculated by dividing the total salary of the employee's 12 working months by 12.

3. Questions related to 13th month salary

3.1. Does the 13th month salary require social insurance?

According to the provisions of law, the monthly salary paid for social insurance is the salary, salary allowances and other supplements according to the provisions of labor law.

However, Clause 2, Article 89 of the 2014 Law on Social Insurance stipulates that the 13th month salary is not considered a monthly salary for social insurance purposes.

Thus, in the month the employee receives the 13th month salary, the social insurance payment does not include the 13th month salary but is still only based on the salary, salary allowances, and additional payments according to the labor contract.

3.2. Are businesses required to pay 13th month salary?

The law does not require businesses to pay 13th month salary to employees. However, if the enterprise has issued legal bonus regulations and publicly announced them at the workplace, the enterprise must pay the 13th month salary to employees when the following conditions are met:

• The employee has worked for 12 full months in the calendar year or has an actual working time of at least 12 months according to the provisions of labor law.
• The employee has completed the work or tasks according to the labor contract.

3.3. Is the 13th month salary a Tet bonus?

The 13th month salary is a bonus paid to employees at the end of the year, usually December. The 13th month salary is not specifically regulated in the 2019 Labor Code, but is only mentioned in some documents. guidance from state agencies.

Tet bonus is a bonus given by employers to employees when they have good business results or when they successfully complete assigned work. Tet bonuses are specifically regulated in Article 104 of the 2019 Labor Code.

Thus, the 13th month salary and Tet bonus are two different bonuses. The 13th month salary is a bonus agreed upon between the employee and the business, regardless of the business results of the business or the employee's level of work completion. On the contrary, Tet bonus is a bonus decided by the employer, based on the business results of the enterprise or the level of work completion of the employee.

3.4. Is personal income tax payable on 13th month salary?

The 13th month salary is a bonus paid by businesses to employees. According to the Labor Law, bonuses are the employee's income. Therefore, the person receiving the 13th month salary is also subject to personal income tax.

3.5. Can I get 13th month salary if I quit my job before Tet?

Whether quitting work before Tet and receiving the 13th month salary or not will depend on the agreement between the employee and the company. Specifically, if in the labor contract, collective labor agreement or enterprise regulations there is a provision that an employee who leaves work before Tet is still entitled to a 13th month salary, the employee will be entitled to this amount. . However, if these documents do not have this regulation, the employee will not receive the 13th month salary.

In addition, if the employee quits his job before Tet but receives his 13th month salary before the employee plans to quit, the employee is still entitled to this amount.

Thus, understanding what the 13th month salary is, the regulations and how to calculate the 13th month salary accurately will help employees protect their rights and have more motivation to work better. For more useful information, don't forget to follow the articles on 1C Vietnam's website.