Gross salary or NET salary?
Gross salary is the total income that the employee receives, including salary, allowance, commission … The employee who receives the gross salary monthly must deduct a prescribed amount to pay social insurance. (According to Decision 595 / QD-BHXH, employees must contribute 8% to the retirement and death fund; 1% to the unemployment insurance fund and 1.5% to the health insurance fund)
To attract skilled workers, Vietnamese companies often set an average gross salary of 5-7 million / month. The income structure includes basic salary, allowances, productivity bonus …
Net salary is the salary minus items such as insurance, personal income tax or other deductibles of the employee.
Thus, gross salary = net salary + 10.5% of insurance premium; meanwhile, net salary = gross salary – 10.5% of insurance. Gross salary is the gross income; net salary is the actual salary received.
Factors affecting labor when negotiating salaries
Many foreign investors believe that Vietnamese workers have a habit of comparing the wages of different factories, with the mentality of “the grass always looks greener on the other side of the fence”. This is not a bad thing. However, in a competitive human resource environment, besides salaries and promises to increase salaries, skilled workers in Vietnam are also interested in other factors such as working conditions, management methods … of the factory.
- Working conditions: does the infrastructure such as dormitory system, canteen, air conditioning system – ventilation – workspace … ensure the quality of life? Are the working conditions guaranteed …?
- Management method: is the production of the factory reasonable or not? Is it guaranteed to be fair?
Therefore, in addition to paying attention to salary / income distribution, the Investor should also care about infrastructure, working conditions … as well as applying some new technologies in management to bring a fair management system, ensuring the interests of employees.