Do employees receive their full Tet bonus, or is a percentage deducted for social insurance and personal income tax? This is a question that always receives much attention from employees, especially as Tet approaches.
1. Is the Tet bonus subject to social insurance contributions?
According to Clause 3, Article 30 of Circular 59/2015/TT-BLDTBXH, the monthly salary used for calculating compulsory social insurance contributions does not include other benefits and allowances:
- Bonuses, innovation bonuses;
- Meal allowances; allowances for fuel, telephone, travel, housing, childcare, and raising young children;
- Support is provided when a worker's family member dies, when a family member gets married, for the worker's birthday, and as a subsidy for workers facing difficult circumstances due to work accidents or occupational diseases.
- Other allowances and subsidies should be listed as separate items in the employment contract.
Therefore, the Tet bonus received by employees will not be used as a basis for calculating social insurance contributions. As a result, employees will receive the full Tet bonus amount without having to deduct any contributions for social insurance.
2. Is the Tet bonus subject to personal income tax?
According to Clause 2, Article 3 of the current Personal Income Tax Law, income from salaries and wages is determined to be taxable income.
This includes salaries, wages, and other payments of a salary or wage nature, in monetary or non-monetary forms, as guided in Clause 2, Article 2, Circular 111/2013/TT-BTC. According to Clause 2, Article 3 of the current Personal Income Tax Law, income from salaries and wages is considered taxable income.
This includes salaries, wages, and other payments of a salary or wage nature, in monetary or non-monetary forms, as guided in Clause 2, Article 2, Circular 111/2013/TT-BTC. On the other hand, bonuses are determined based on production and business results and the level of job completion by employees, so they are considered income of a salary or wage nature.
Therefore, Tet bonuses are considered as taxable incomeHowever, employees only have to pay personal income tax if they have taxable income (high income).
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Is it mandatory for businesses to give Tet bonuses?
Clause 1 of Article 104 of the 2019 Labor Code stipulates as follows:
"A bonus is a sum of money or property or other forms of reward that an employer gives to an employee based on production and business results, or the employee's level of job performance."
Accordingly, the employer will decide on employee bonuses based on production and business results, and the level of job performance of the employees.
And in that way, businesses can be completely proactive. Choose whether or not to give a Tet bonus. for workers. In particular, in 2020, due to the impact of Covid-19, many businesses suffered losses, therefore, it is highly likely that many workers will not receive Tet bonuses this Lunar New Year 2021.
In 2021, will it be possible to give Tet bonuses in kind instead of cash?
The provisions on bonuses in Article 103 of the 2012 Labor Code have been replaced by bonuses in Article 104 of the 2019 Labor Code.
Therefore, in the future, employees may receive Tet bonuses in kind or other forms instead of money. In fact, many businesses currently reward their employees with Tet bonuses such as travel packages, train or bus tickets to return home; or valuable items such as household appliances, motorbikes, cars, etc.
However, employees don't need to worry about companies arbitrarily rewarding them because, although the reward regulations are decided by the employer, they must still consult with the employee representative organization at the workplace.
At the same time, businesses must publicly display their bonus regulations at the workplace; failure to do so will result in a fine of 02-05 million VND (according to point a, clause 1, Article 16 of Decree 28/2020/ND-CP).