Question:
Dear Lawyer, our company is currently contributing to social insurance based on the actual salary received by employees. For example:
- Salary: VND 10,000,000/person/month.
- Allowance: VND 660,000/person/month.
- The company assumes all responsibilities for social insurance contributions and tax obligations.
At present, the company calculates social insurance contributions based on the VND 10,000,000 figure. Is this in compliance with the law?
There is information suggesting that social insurance contributions should be based on the total salary, including allowances and other additional income. Could you please advise us on how the company should calculate social insurance contributions for employees under net salary (actual salary received) agreements, in accordance with the latest social insurance regulations?
Response:
SB Law provides the following responses to your inquiries:
Legal Basis for Social Insurance Contribution Calculation:
According to Clause 2, Article 89 of the 2014 Law on Social Insurance, the monthly salary used as the basis for social insurance contributions includes:
- The salary stated in the labor contract.
- Salary allowances agreed upon by both parties.
- Other additional amounts specified under labor laws, clearly determined in monetary terms and paid regularly in each salary period.
Additionally, Clause 3, Article 30 of Circular 59/2015/TT-BLĐTBXH, as amended by Clause 26, Article 1 of Circular 06/2021/TT-BLĐTBXH, outlines certain amounts excluded from social insurance contribution calculations, such as: Other benefits and allowances, such as bonuses under Article 104 of the Labor Code, initiative rewards, meal allowances, transportation support, housing support, childcare support, funeral or wedding support, and other assistance or allowances clearly stated as separate items in the labor contract.
Application to Your Company's Case:
- For the net salary of VND 10,000,000:
- This is the actual salary received by employees. If the company specifies in its policies that the net salary of VND 10,000,000 is used as the basis for social insurance contributions, and the company assumes all tax and social insurance responsibilities on behalf of employees, the gross salary must be calculated based on this net amount. To ensure compliance with regulations and employee benefits, the company should calculate the gross salary from the net salary of VND 10,000,000. This gross salary, which includes lunch allowances, would be approximately VND 11,833,184.
- Social insurance contribution (8%): VND 893,855.
- Health insurance contribution (1.5%): VND 167,598.
- Unemployment insurance contribution (1%): VND 111,732.
- Pre-tax income after deductions: VND 10,660,000 (including lunch allowance).
- If this salary includes additional allowances, the company must identify which allowances are paid regularly and include them in the social insurance contribution base.
- For the lunch allowance of VND 660,000:
- According to Official Letter No. 4647/TCT-DNNCN dated November 20, 2019, lunch allowances below VND 730,000/month are not included in the social insurance contribution base.
- Therefore, the VND 660,000 lunch allowance in your case is exempt from social insurance contributions and personal income tax.
Note:
The above provisions are applicable to state-owned enterprises. However, there are currently no separate regulations for lunch allowances in non-state enterprises. Nonetheless, based on Official Letter No. 4647/TCT-DNNCN issued by the General Department of Taxation on November 20, 2019, this exemption is being applied to all types of enterprises (state-owned and non-state-owned). The allowance threshold for exemption from personal income tax and exclusion from the social insurance contribution base is VND 730,000/person/month, as stipulated in Clause 4, Article 22 of Circular 26/2016/TT-BLĐTBXH.
|
