The accurate way to calculate Gross to Net salary is always the top concern of business owners and job seekers
Payroll calculation is very important for both employees and employers. When businesses sign a labor contract with a new employee, they also need to consider the method of calculating and paying salary so that it is effective and convenient. As for employees, they need to know the Gross salary and Net salary to ensure their benefits. Whether you're an employer or a job seeker, don't ignore the following accurate gross to net salary calculation!
1. What is Gross Salary?
Gross salary is the employee's total monthly income, including basic salary and allowances, allowances, commissions, etc., excluding compulsory insurance and personal income tax.
The concept of Gross salary is currently not specified in legal documents, this is a term used in the economic field, used by companies when negotiating salaries with employees.
Net salary is your income after deducting all insurance costs, personal income tax, etc. To put it simply, Net salary is the actual amount you receive every month.
What is Gross Net Salary?
2. Benefits when you know the difference between Gross salary and Net salary
When you have an understanding and know how to change Gross salary to Net , you will avoid unnecessary misunderstandings with the recruitment company as well as protect and claim your rights when signing a labor contract. When the agreement is based on Gross salary, you receive all insurance benefits and can automatically calculate the income you will receive.
People can refer to the market salary to propose a suitable salary for employers right here.
3. Instructions for calculating Gross salary to Net accurately
According to the Law of Vietnam (LuatVietnam.vn), Net salary is currently calculated according to the following formula:
Net salary = Gross salary - Compulsory premium payment - Personal income tax (if any)
In there:
- Gross salary is the total amount that the company pays to employees, including basic salary and allowances, allowances, commissions, etc., excluding deductions.
- The employee's compulsory insurance premium will be calculated on the basis of the employee's salary. Specifically:
- 8% pay the retirement - death fund.
- 1% pay unemployment insurance fund.
- 1.5% to contribute to the health insurance fund.
In there:
- Exemptions can include: Compensation for labor accidents; part of the salary for night work; overtime is paid higher than the wage for day work; pensions;…
- Deductions include:
- Family circumstances deduction for employees themselves: 11 million VND/month.
- Family circumstance deduction for dependents: 4.4, million VND/month.
- Insurance contributions, voluntary retirement fund.
- Donations to charity, humanitarian, study promotion.
- Tax rate: According to the partially progressive tariff:
|
Tier
|
Taxable income/month
(million dong)
|
Tax
|
|
first
|
Up to 05
|
5%
|
|
2
|
Over 05 to 10
|
ten %
|
|
3
|
Over 10 to 18
|
15%
|
|
4
|
Over 18 to 32
|
20%
|
|
5
|
Above 32 to 52
|
25%
|
|
6
|
Above 52 to 80
|
30%
|
|
7
|
Over 80
|
35%
|
How to convert Gross salary to Net, calculate Net salary to Gross
4. Should you negotiate Gross salary or Net salary?
In fact, if the business pays the full salary and pays the social insurance premium and personal income tax, whether you receive Gross salary or Net salary, you will also enjoy the same benefits.
There are still many cases where the company pays the net salary but declares to the social insurance agency, the tax authority with a lower salary to reduce the tax payable, when unexpected incidents occur, the interests of the workers are reduced.
Receiving Gross salary creates a more objective and transparent feeling and you will easily track changes in salary and other mandatory expenses when deducted.
When choosing a payment method between Gross and net, you should choose the Gross salary form to fully pay the correct fees with the salary, receive full benefits as well as avoid sensitive issues between businesses. and workers.
See also: How to propose a raise to help you achieve your expectations?
In general, it will not be difficult for you to distinguish Gross and Net wages. If you understand well, you will still receive the exact amount as agreed with the business whether it is Gross or Net salary. And no matter which form of payment you choose, you also need to actively update the provisions of the law related to social insurance, health insurance, unemployment insurance and personal income tax from time to time. specifically to actively calculate the exact amount that they are deducted, avoiding errors.
Receiving Gross salary or Net salary will depend on the business and the employee
In short, basically, Gross salary and Net salary are two types of wages of equal value that workers receive. Calculating Gross salary to Net and vice versa is very simple. Hope the above sharing of Navigos Search will be useful for you in calculating faster.
job directory, we always update hot jobs (attractive jobs) with extremely attractive salaries, so don't miss them. Or you can actively submit your CV for a chance to become a potential candidate in Navigos Search's candidate database. Our consulting team are very experienced recruitment experts, deeply understand the value of human resources, and understand the labor market. Based on a methodical working process and from the recruitment requirements of customers, the recruitment specialists of Navigos Search will search for suitable jobs and actively contact you.
After contacting, the recruitment specialist will support and advise on the business, the market, recruitment requirements, ... for you the most suitable job position. After being recruited, the recruitment specialist continues to support the candidate during the probationary period and after the probationary period.
Search for your dream job at Navigos Search
Over 20 years of long-term experience in the recruitment field, Navigos Search is proud to bring quality middle and high-level job opportunities at large enterprises and multinational corporations to job seekers across Vietnam. .
Please contact Navigos Search if you are looking for any other mid-level or senior positions:
Navigos Search - Vietnam's leading mid- and high-level talent hunting company
- Headquarter in Ho Chi Minh City : 20th Floor, E.town Central Tower, 11 Doan Van Bo, Ward 12, District 4
- Head office in Hanoi : Building V. - 125 Ba Trieu, Hai Ba Trung District
- Hotline: 1800 585 826
- Email: contact@navigossearch.com
- Website : navigossearch.com
- Fanpage : facebook.com/NavigosSearchVietnam
- Linkedin : linkedin.com/company/navigos-search/
Navigos Search - Vietnam's leading mid- and high-level talent hunting company