Question:
Our company has an additional benefit: “Fuel support for the sales department and housing for employees.” According to Regulation 47, this additional benefit is not subject to social insurance contributions. However, this additional benefit is provided as a fixed monthly amount based on the salary. So, does this additional benefit need to be included in social insurance contributions?
Answer:
– Based on Article 3, Clause 30 of Circular No. 59/2015/TT-BLDTBXH dated December 29, 2015 by the Ministry of Labor – Invalids and Social Affairs, which provides detailed regulations and guidance on the implementation of social insurance laws regarding mandatory social insurance, the monthly salary for social insurance contributions does not include other benefits and welfare items such as bonuses as stipulated in Article 103 of the Labor Code, innovation bonuses, mid-shift meals, fuel and transportation allowances, rent, child care, support for accidents or occupational diseases, and other forms of assistance, as specified separately in the labor contract according to Clause 11, Article 4 of Decree No. 05/2015/ND-CP dated January 12, 2015 by the Government providing detailed regulations and guidance on the implementation of certain provisions of the Labor Code.
=> Therefore, according to these regulations, the fuel support benefit is not considered for social insurance contributions.
Question:
At the 172nd Business Dialogue Conference, the leaders of the Department of Labor and Social Affairs along with the leaders of the Social Insurance Office of the city affirmed: Regarding bonuses based on performance and job achievements (these bonuses are not fixed but depend on business results, completed tasks), which are rewarded periodically on a monthly or quarterly basis, these bonuses are not subject to social insurance contributions.
From this issue, I hope that your department can provide advice: According to Article 18 of the 2014 Enterprise Law, business managers do not receive a fixed monthly salary, but only receive bonuses on a quarterly or annual basis based on the actual business results of the company according to the company’s reward mechanism. Therefore, are business managers exempt from mandatory social insurance contributions?
Article 2. Applicable subjects – Social Insurance Law:
“…
– Business managers, managers of cooperative unions who receive wages”
Article 4. Explanation of terms – Law on Enterprise:
“…
18. Business managers include those managing companies and privately-owned enterprises, including private business owners, members of partnerships, Chairpersons of the Council of Members, Members of the Council of Members, Chairpersons of the company, Chairpersons of the Board of Management, Members of the Board of Management, Directors or General Directors, and individuals holding other managerial titles with the authority to sign transactions on behalf of the company as stipulated in the company’s Charter.”
Answer:
– Based on Point 1.5, Clause 1, Article 4 of Decision No. 595/QD-BHXH dated April 14, 2017 by the Vietnam Social Insurance, the participants subject to social insurance include business managers and managers of cooperative unions who receive wages.
– Based on Point 2.4, Clause 2, Article 6 of the above-mentioned Decision, social insurance contributions for business managers who receive wages as stipulated in Point d, Clause 1, Article 2 of Decree No. 115/2015/ND-CP are compulsory. The salary is determined by the enterprise, excluding specialized management officials in single-member limited liability companies with the state as the sole owner.
=> According to these regulations, business managers who do not receive wages are not required to contribute to social insurance.
Question:
Based on Article 4 of Circular No. 47/2015/TT-BLDTBXH regarding salary and other regimes and benefits stated in the labor contract, and Article 30 of Circular No. 59/2015/TT-BLDTBXH regarding monthly social insurance contributions, the company pays monthly performance bonuses (paid on the same date as salaries) to the business department for exceeding the company’s set revenue target. These bonuses are calculated as a percentage of the exceeded revenue (the bonus amount is different every month, not fixed, and varies from month to month). Therefore, I would like guidance from the Social Insurance Office to determine whether this performance bonus should be included in calculating social insurance contributions for both the company and the employees for the year 2018.
Answer:
– Based on Article 30 of Circular No. 59/2015/TT-BLDTBXH issued by the Ministry of Labor – Invalids and Social Affairs, which provides detailed regulations and guidance on the implementation of social insurance law regarding compulsory social insurance, the basis for calculating social insurance contributions is the salary, wage-related allowances, and other additional amounts stated in the labor contract.
– Following these regulations, if the performance bonus based on revenue targets is determined by a specific amount, along with the agreed-upon salary, and is paid regularly in each salary payment period, then social insurance contributions for Social insurance, Health Insurance, Unemployment Insurance, Occupational Accident Insurance, and Occupational Disease Insurance should be calculated based on this bonus amount.
Question:
Our company pays monthly income to employees as follows:
– Fixed salary (also known as basic salary) stated in the employment contract, used to calculate insurance contributions for employees.
– Responsibility allowance (received by managerial staff as a monthly allowance), not stated in the labor contract.
– Productivity bonus (based on individual productivity or monthly sales, the amount is determined at the end of the month), not stated in the labor contract.
– Concurrent duty allowance (for those holding multiple positions such as Labor Union Chairman…), not stated in the labor contract.
We request guidance on which types of insurance our company should contribute for employees based on the mentioned income types from January 1, 2016. And which legal documents provide instructions for this matter?
Answer:
– Based on Article 1.5, Clause 1, Article 4 of Circular No. 59/2015/TT-BLĐTBXH issued by the Ministry of Labor – Invalids and Social Affairs, wage-related allowances are meant to compensate for labor conditions, complex job nature, living conditions, and the level of attraction to employees that are not fully considered or included in the agreed-upon salary in the labor contract, such as position allowances, responsibilities allowances, hazardous, toxic, and dangerous allowances, seniority allowances, regional allowances, mobile allowances, attraction allowances, and similar allowances.
– Clause 3, Article 30 of the same circular stipulates that “The monthly salary for compulsory social insurance does not include other regime and welfare amounts, such as bonuses as stipulated in Article 103 of the Labor Code, performance bonuses, meal allowances between shifts, support for gasoline, telephone, transportation, housing, child care, support for employees with deceased relatives, employees with newly-married relatives, employees’ birthdays, assistance for employees facing difficulties due to occupational accidents, occupational diseases, and other support, allowances are separately stated in the labor contract according to Clause 11, Article 4 of Decree No. 05/2015/NĐ-CP dated January 12, 2015, of the Government which provides detailed regulations and guidance on the implementation of a number of contents of the Labor Code.”
=> The company should compare the specified allowances with the regulations above to determine which insurance contributions to implement.
