How to calculate union dues and union fees

What is union funding? What is union dues? Contribution rates – How to calculate union funding, union dues. Are union funds mandatory?…

I. Regulations on union funds

1. What are union dues?

Trade union fees are financial contributions made by enterprises and organizations regardless of whether or not they have a grassroots trade union organization.

2. Participants

• People’s armed forces units, state agencies;
• Public and non-public career units;
• Social organizations, political organizations, socio-professional organizations, socio-political organizations;
• Enterprises operating under the Enterprise Law, Investment Law and established economic sectors;
• Cooperatives and cooperative unions operate and are established under the Law on Cooperatives;
• Other organizations employing employees in accordance with the provisions of the Labor Law;
• Foreign enterprises, agencies and organizations operating in Vietnam that are related to trade union activities and organizations and employ Vietnamese workers.

3. Union fee deduction rate and union fee payment method

The union fee is 2% of the total salary of all employees participating in social insurance and is paid by the enterprise without being deducted from the employee’s salary.

Union fee payment method: Depending on the locality, direct payment or bank transfer is required, so you can contact the Labor Federation of the district where the enterprise is headquartered for specific instructions and pay once a month at the same time as paying social insurance for employees.

4. Penalty for not paying union fees

The penalty is prescribed as follows:

• The employer shall be fined from 18% to 20% of the total amount of union fees payable at the time of the administrative penalty record, but not exceeding VND 75,000,000 if it fails to pay union fees;
• The employer shall be fined from 12% to less than 15% of the total amount of trade union fees payable at the time of the administrative penalty record, but not exceeding VND 75,000,000 if payment is late, payment is not in accordance with regulations, or payment is not made to the required number of employees.

II. Regulations on union dues

1. What is union dues?

Union dues are financial contributions voluntarily paid by employees participating in grassroots trade union organizations without coercion.

2. Conditions for establishing a grassroots trade union

To establish a grassroots union, the following two conditions must be met:

• Grassroots trade unions are established at legal employers;
• Have at least 5 workers or union members who voluntarily apply to join the Vietnam Trade Union.

3. Participants

• Union members in social organizations, political organizations, socio-professional organizations, socio-political organizations, people’s armed forces units, state agencies, and public service units receive salaries according to the salary scale and salary table prescribed by the state;
• Union members in state-owned enterprise trade unions including trade unions of joint stock companies in which the state holds controlling shares;
• Union members in non-state enterprise grassroots unions, non-public career units do not receive salaries according to the salary scale and salary table prescribed by the State, cooperatives, cooperative unions, enterprises, foreign agencies and organizations operating in Vietnam. 

4. Union dues deduction rate and union dues payment method

The minimum union fee is 1% of the salary participating in social insurance and the maximum is 10% of the basic salary and is paid by employees who are union members participating in the grassroots union organization.

Union dues payment method: 

• Every month, union members can pay cash directly, transfer money to the business or the business can deduct from their salary after receiving the union member’s opinion;
• Periodically, the enterprise must pay this union fee back to the Labor Federation of the district where the enterprise’s headquarters is located.

5. Procedures for establishing a grassroots trade union

4 steps to register to establish a grassroots union as follows:

Step 1 : Establish a campaign committee

• There must be 3 or more employees working at the organization, agency, or enterprise who have voluntarily applied to join the union;
• Workers voluntarily apply to join the union, gather and unanimously elect a head of the campaign committee;
• The mobilization committee is responsible for mobilizing the establishment of grassroots unions and mobilizing workers to voluntarily participate.

Step 2 : Organize a meeting to establish a grassroots union

• Report the list of employees who voluntarily agree to join the union;
• Vote to elect the executive committee of the grassroots union.

Step 3 : Prepare registration documents, including:

• Business license without notarization (1 copy);
• Union membership application form for each employee (1 copy) with 1 2 x 3cm photo;
• Official letter requesting to establish a union (1 copy);
• List of employees of the enterprise (2 copies);
• List of employees of the enterprise applying to join the trade union organization (2 copies);
• List of proposed provisional executive committee of grassroots trade union (1 copy).

>> FREE DOWNLOAD: Application form for grassroots trade union registration.

Step 4 : The Labor Federation shall issue a recognition decision within 15 days from the date of receipt of the request dossier from the grassroots trade union executive committee. 

>> See more: Union budget and union dues – details on how to distinguish.

III. Allocation of union funds and union dues

For enterprises that have not established a grassroots union, the monthly union fee paid to the district union (where the enterprise is headquartered) will not be deducted and used for employee activities at the enterprise.

Accordingly, only when enterprises establish grassroots unions will the superior union deduct a portion of union funds and union dues according to a certain allocation ratio and transfer them back to the enterprise union to support union activities and take care of the lives of union members and employees in the enterprise.

1. Union budget and dues allocation ratio

➧ Union fund allocation ratio:

In 2021, according to Decision No. 1355/QD-TLĐ dated October 1, 2020:

• Enterprises are allowed to use 71% of the total collected union fees;
• The upper-level union is entitled to the remaining 29%.

In 2022, according to Resolution No. 02-NQ/TW dated June 12, 2021 of the Politburo, it was affirmed that continuing to build the Vietnamese working class is important and urgent, so the rate for grassroots trade unions was increased:

• Enterprises are allowed to use 75% of the total collected union fees;
• The superior union is entitled to use the remaining 25%.  

➧ Union dues allocation ratio:

• Enterprises are allowed to use 70% of the total collected union fees;
• The superior union is entitled to use the remaining 30%.

2. Documents and procedures for requesting a refund of union funds and dues

To request a refund of union fees and union dues, the enterprise prepares a set of documents as shown in the table below and submits them to the District Labor Federation where the enterprise has its headquarters.

IV. Frequently asked questions about union funds and union dues