What is the 13th month salary? Is the 13th month salary mandatory? Regulations on 13th month salary and bonus. How to calculate the 13th month salary for employees according to state regulations.
Every year-end, employees are interested in learning about salaries and benefits. So is the 13th month salary a Tet bonus? How is the 13th month salary calculated? Let’s find out with Online Accounting in this article.
What is the concept of 13th month salary?
1. What is the 13th month salary?
The 13th month salary is a bonus that the employer pays to the employee based on the agreement or bonus regulations to encourage the spirit and reward the employee’s work results throughout the year.
Although the 13th month salary is a salary or wage income, it is not a monthly salary but this amount is considered an annual bonus depending on the bonus policy and benefits of each company.
That is, whether there is a bonus or not, whether one must work for 12 months to receive a bonus or whether one only needs to work for 6 months to receive a bonus… will all depend on the company’s bonus policy.
Normally, the 13th month bonus will be paid once at the end of the year or the beginning of the year, or divided equally by month/quarter to be paid together with salary and wages.
See also:
>> Distinguishing between 13th month salary and Tet bonus;
>> Salary and bonus regulations – Reference sample of Online Accounting.
2. Is the 13th month salary mandatory?
Currently, in legal documents, there is no document mentioning the concept of 13th month salary, which means that from a legal perspective, there is no 13th month salary, or in other words, businesses are not obliged to pay 13th month salary to employees.
Whether or not there is a 13th month salary will be clearly stated in the bonus regulations and will be publicly announced by the employer at the time of interview or when signing the labor contract.
3. Is the 13th month salary subject to personal income tax?
As fdiinvietnam.com shared above, the 13th month bonus is considered income from salary and wages. Therefore, when employees receive the 13th month bonus, they must pay personal income tax.
However, after deducting deductions, if the employee’s total income is not yet subject to personal income tax, the employee does not have to pay tax.
>> You may be interested in: How to calculate personal income tax from salary and wages.
Formula, how to calculate 13th month salary for employees according to state regulations
Currently, to calculate the 13th month salary, businesses usually apply one of the following two methods:
- Calculate 13th month salary based on average salary of the whole year;
- Calculate 13th month salary based on December salary.
Specifically, the formula for calculating the 13th month salary is as follows.
1. How to calculate 13th month salary based on average annual salary
➧ Work for 1 year
| In case of working for 12 months | ||
| 13th month salary | = | Average salary 12 months |
For example:
Mr. A works at company X:
- From January to June, salary is 10,000,000 VND;
- From July to December, salary is 12,000,000 VND.
Thus, Mr. A’s 13th month bonus is 11,000,000 VND.
➧ Worked less than 12 months
| In case of working less than 12 months | ||||
| 13th month salary | = | Working time | x | Average salary by working time |
| 12 months | ||||
For example:
Mr. B worked at company Y for 6 months, in which:
- First 2 months salary is 10,000,000 VND;
- 4 months later salary 12,000,000 VND.
Thus, Mr. B’s 13th month bonus is 5,666,666 VND.
2. How to calculate 13th month salary based on December salary
It can be said that this is the simplest way to calculate the 13th month salary, however, to apply this salary calculation method, employees will usually have to work for 12 full months.
| 13th month salary | = | December salary |
You may need:
>> Can the cost of Tet gifts for employees be invoiced?
>> Regulations on salary costs and allowances;
>> How to issue gift invoices.
Related questions about the latest 13th month salary and bonus regulations
1. How is the 13th month salary calculated?
To calculate the 13th month salary, businesses will usually apply one of the following two methods:
- Calculate 13th month salary based on average salary of the whole year;
- Calculate 13th month salary based on December salary.
>> See details: Formula for calculating 13th month salary.
2. What does the 13th month salary include?
Currently there is no law on 13th month salary and there is no document mentioning the concept of 13th month salary, which means that from a legal perspective, there is no 13th month salary.
Depending on each company, the 13th month salary regulations will be different. Normally, at the time of interview or when signing the labor contract, the company will inform you in detail about salary, bonus and accompanying benefits.
3. Is the 13th month salary a Tet bonus?
According to Article 104 of the 2019 Labor Code:
- Bonus is money or property or any other form of payment that an employer rewards employees based on their work performance as well as production and business results;
- Bonus regulations will be decided and publicly announced at the workplace by the employer.
From there you can see, whether the 13th month salary is a Tet bonus or not will depend on the bonus regulations of each business.
4. Can I get 13th month salary if I haven’t worked for 12 months?
As the content in the article shared by fdiinvietnam.com, whether or not there is a 13th month salary as well as how to calculate the 13th month salary will all be based on the bonus regulations of each company.
5. Does the law provide for a 13th month salary?
Currently there is no legal document specifically regulating the 13th month salary.
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