What is December Bonus? What are the conditions to receive December bonus? If you are wondering about the mandatory December Bonus as well as the formula to calculate this salary, please refer to the following article of Viindoo to ensure your rights.
What is December Bonus? Regulations on December Bonus
This bonus is intended to support and encourage employees for their continued dedication to the business next year. In recruitment, this is also one of the benefits helping businesses attract more candidates.
In Vietnam, December Bonus will usually be included in the Tet bonus and will be paid to employees before the annual Lunar New Year.
December Bonus is used to support and encourage employees' dedication
So what are the conditions to receive the 13th month salary? Some common conditions for receiving 13th month salary are:
- Be an official employee of the company;
- Sign a labor contract with the enterprise;
- Do not violate the basic provisions in the working regulations of the company or organization;
However, the standard conditions for receiving 13th month salary may vary depending on the regulations of each company or organization. Usually, the conditions will be mentioned and agreed upon in the process of signing a labor contract between the enterprise and the employee. You should refer to the policy of the company or organization to know the conditions for receiving the 13th month salary.
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Is December bonus mandatory?
Currently, the state does not have a regulation on the December bonus nor does it require businesses to have the December bonus. Because this is just a bonus agreed upon between the enterprise and the employee. In addition to being based on the agreement between the parties. December bonus also depends on the business situation of the company and the working outcomes of the employees.
However, most businesses will have a December bonus because this is considered as a way for employers to attract and retain personels of the company.
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3. Is the 13th month salary a Tet bonus?
Pursuant to the 2019 Labor Code, Article 104 stipulates Bonuses and Bonus Regulations as follows:
"1. Bonus is the amount of money or property or in other forms that the employer rewards the employee based on the production and business results and the employee's job completion level.
2. Regulations on bonus are decided by the employer and publicly announced at the workplace after consulting the representative organization of employees at the grassroots for the place where the representative organization of the employee is located. at work."
Thus, the 13th month salary is considered a year-end bonus and not a Tet bonus. The payment of 13th month salary and Tet bonus are two different amounts and must be clearly stated in the labor contract.
How to compute December bonus in 2022
Each business will have a different way of calculating the December bonus depending on the number of employees in the organization structure. You can try to refer to the following 3 popular December bonus calculation methods.
Each business will have a different way of calculating December bonus depending on different factors.
Based on average salary
This salary calculation formula will be calculated when the employee has worked for full 12 months. The formula would be:
“December bonus = Average salary of all 12 months”
- Salary from January to August: $8000 /month
- Salary from September to December: $10.000/month
=> December bonus = [($800 x 8) + ($10.000x 4)] / 12 = $3.866
For employees who have not worked for full 12 months
In case the employee has not worked for full 12 months, if the enterprises agree to still pay the December bonus, this bonus will be calculated based on the ratio between the actual number of working months and 12 months. So the formula would be:
“December bonus = Number of months worked in the year/12 x Average salary”
- Official salary from July to December: $8000 /month
- In total, you can work for 6 months
=> December bonus = (6/12) x$8000 = $4000
Calculated according to December salary
For the case of businesses that calculate the December bonus according to the 12th salary, the employee will receive the December bonus equal to the last month that you have worked up to the time of receiving the bonus if working for full 12 months.
“December bonus = December salary”
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Questions about December bonus
Does the December bonus include a probationary period?
The answer is Yes.
If you have completed the probationary period and worked at the enterprise continuously for 1 month or more until the end of December according to the solar calendar and still work at the enterprise on December 31st, you are eligible to receive the bonus.
However, if you have not finished your probationary period by December 31st, you will not be able to receive this bonus.
Is December bonus subject to personal income tax?
According to Labor Law, bonuses will still be considered as an income. Therefore, although December bonus is not specified and not mandatory, however, because this is considered a bonus that businesses give to employees, personal income tax will still be imposed.
December bonus will still be subject to personal income tax
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Get a December bonus if you quit the job before Tet?
This will depend on the agreement on the December bonus between the employee and the enterprise as there is currently no legal regulation on this. Therefore, you should learn more about this in the employment contract between labour and the business.
The content of the above article is information that can help readers answer the question of what is December bonus and related questions. This can be considered as an employee's right when working, so Viindoo hopes to help readers better understand this bonus to ensure their own interests.
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