First of all, employees must clearly distinguish between net salary and gross salary.
Net salary is the actual amount of money received after deducting all insurance and personal income tax (if any). In other words, this is the amount of money "used" each month. When employees agree to receive net salary, it means that the enterprise will automatically deduct a portion of the salary to pay compulsory insurance (SI, HI, UBTN) and personal income tax (if any) on their behalf.
gross wages are the total income of employees before deducting any expenses, including basic salary, allowances, commissions, bonuses, and even expenses payable for insurance and taxes. In other words, gross salary reflects the entire cost that businesses have to pay to employees. When receiving gross salary, employees directly deduct a portion to pay insurance and personal income tax according to regulations.
Important notes when negotiating salaries
To ensure your rights and avoid unnecessary misunderstandings during the salary negotiation process, you need to pay attention to the following points:
Clearly ask about salary payment forms from the beginning
Don't be afraid to ask, "Is this salary gross or net?". This is an important step to proactively calculate the salary received, avoiding the situation where the actual amount is lower than expected due to not deducting insurance and taxes.
Always update new regulations
Always proactively update regulations on social insurance, health insurance... Timely updates help you calculate your salary according to current regulations, avoid being deducted incorrectly or lacking transparency by businesses.
Check social insurance payment information regularly
You need to regularly check information to see if the business pays social insurance according to the agreed gross salary level. If an incident occurs, the social insurance contribution rate will affect the allowances that employees receive.
To check social insurance payment information, you can look up the social insurance payment process via VssID, through the website of Vietnam Social Insurance...
Note the deductions affecting the food received
To calculate the net salary accurately, workers need to clearly understand the amounts that will be deducted from the monthly gross salary:
Social insurance: Employees pay 8% of their monthly salary to the social insurance fund. This is an important amount for workers to enjoy long-term benefits such as retirement, maternity, work accidents, etc.
Health insurance: Pay 1.5% of monthly salary, helping workers have the right to medical examination and treatment according to State policies at a much lower cost than usual.
Unemployment insurance: The contribution rate is 1% of the monthly salary, financial support when you lose your job and need to receive unemployment benefits.
Personal income tax: If income exceeds the exemption level, employees will have to pay tax according to the progressive table in installments. The tax rate depends on income after deduction of family deductions and other legal expenses.
Union fee (if you are a union member).
