Payroll tax compliance – Everything you must know!
Salary payment principles are the regulations and principles governing the payment of wages to employees to protect their rights. So how have salary payment principles changed compared to previous regulations? Follow the article below by S4B Vietnam to understand better!
1. What is salary?
According to Article 90 of the 2019 Labor Code, salary is the amount of money that the employer pays to the employee based on the agreement between the two parties to perform specific tasks. Salary includes salary according to job or position, allowances and other supplements.
Payroll compliance outsourcing according to job or position must not be lower than the prescribed minimum wage. Employers are responsible for data security in payroll outsourcing and risk reduction through payroll outsourcing.
2. Principles of payroll tax compliance payment to employees
Article 94 of the 2019 Labor Code stipulates that employers must pay wages in full and on time and must not interfere with the spending of wages by employees or force them to buy goods or services from their side or designated units.
According to Article 94 of the 2019 Labor Code, the principles of salary payment by employers to employees include:
- Employers are responsible for paying wages in full, on time and directly to employees. If employees cannot receive wages directly, payment can be made through a legal representative authorized by the employee.
- Employers are not allowed to control or interfere with the spending of wages by employees. They are also not allowed to force employees to use their wages to buy goods or services from them or from units they designate.
Risk reduction through payroll outsourcing
3. What is the basis for payroll tax compliance?
According to (Article 95 of the 2019 Labor Code), employers pay wages to employees based on the wage agreement, labor productivity and work quality.
Wages are recorded in the labor contract and paid in Vietnamese Dong. For foreign employees working in Vietnam, wages can be paid in foreign currency.
Each time wages are paid, employers must provide a detailed statement to employees, stating the basic wage, overtime wages, night work wages and deductions (if any).
4. Latest salary payment period for employees
Employees who receive hourly, daily or weekly wages are paid after each work unit, or can be paid in lump sums as agreed by both parties, but not more than once every 15 days.
According to Article 97 of the 2019 Labor Code on salary payment period for employees:
Salary payment period
- Employees who receive hourly, daily or weekly wages are paid after the working hour, day or week, or are paid in lump sums as agreed by both parties, but not more than once every 15 days.
- Employees who receive monthly wages are paid once a month or once every half month. The time of salary payment is agreed by both parties and must be set at a cyclical time.
- Employees who receive wages based on products or on contracts are paid according to the agreement of both parties; if the work must be done over many months, they will receive monthly salary advances based on the amount of work done during the month.
- In case of force majeure, the employer has taken all measures to remedy the situation but cannot pay wages on time, the delay must not exceed 30 days; if the delay is 15 days or more, the employer must compensate the employee with an amount at least equal to the interest on the late payment calculated at the interest rate for 1-month term deposits announced by the bank where the employer opens a salary account for the employee at the time of salary payment.
Labor law payroll outsourcing
Thus, the salary payment period for employees is stipulated as follows:
- Employees receiving hourly, daily, weekly wages are paid after each working period or combined but not more than 15 days.
- Monthly wages are paid once or divided into half a month, at a fixed agreed time.
- Product-based and piece-rate wages are paid according to agreement; if the work lasts for many months, the employee will receive a monthly salary advance.
- If the salary cannot be paid on time due to force majeure, the delay shall not exceed 30 days. If the payment is delayed for 15 days or more, the employee will be compensated at the bank interest rate.
5. Who pays the employee’s salary?
The employer is the person who pays the employee’s salary, according to the provisions of the 2019 Labor Code. Specifically:
5.1 For enterprises:
- Salary is paid by the enterprise’s board of directors, through the human resources department or accounting department.
- The source of money to pay salaries comes from the enterprise’s revenue, after deducting other expenses.
5.2 For non-profit organizations:
- Salary is paid by the organization’s board of directors, through the human resources department or accounting department.
- The source of money to pay salaries comes from the state budget, grants or revenue from the organization’s business activities.
5.3 For households:
- Salary is paid by the head of the household.
- The source of money to pay salaries comes from the income of the head of the household.
6. What is a monthly salary?
Lump sum salary is a term commonly used in corporate financial management to refer to paying employees after a period of work, instead of immediately after the work is completed. This means that employees will receive their salary for the previous month at the beginning of the following month.
7. Are employees compensated when the company pays late wages?
According to Article 97 of the 2019 Labor Code, if the employer cannot pay wages on time due to force majeure, the delay must not exceed 30 days. If the salary is paid late for 15 days or more, the employer must compensate the employee at least equal to the interest calculated on the late payment amount, based on the interest rate for one-month term deposits announced by the bank where the employee opens the salary payment account at the time of payment.
In short, the principle of labor law payroll outsourcing to employees is being increasingly adjusted and improved to ensure equality and fairness for all employees. These changes are intended to protect the rights of employees in receiving wages and managing personal finances. Follow S4B Vietnam to update the latest information!
S4B Vietnam
- Address: Unit 701B – 701C, Tower A, Handi Resco 521 Kim Ma Street, Ba Dinh District, Hanoi, Vietnam.
- Tel: + 84 24 3974 4181
- Email: service@s4b.com.vn
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