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KPI is known as a key performance indicator. Salary based on KPI is the amount paid according to the employee performance. Currently, many enterprises have applied the salary calculated according to KPI in addition to the fixed salary to promote the job performance of employees.<\/p>\n
Pursuant to Article 90 of the Labor Code 2019: A salary is an amount the employer pays the employee under an agreement for work performed by the latter, including base salary<\/strong>, allowances,<\/strong> and other additional amounts<\/strong>. The base salary must not fall below the statutory minimum wage.<\/p>\n Clause 2, Article 5 of the Law on Social Insurance 2014 stipulates: The compulsory social insurance premium shall be calculated based on an employee\u2019s monthly salary<\/strong>.<\/p>\n In addition, Clause 2, Article 17 of Decree 115\/2015\/ND-CP stipulates: MONTHLY SALARY as the basis for social insurance payment will be the salary, salary-based allowance, and other additional amounts<\/span><\/strong> mentioned in the labor contract as prescribed in the labor law.<\/p>\n And in Circular 06\/2021\/TT-BLDTBXH, other additional amounts<\/strong> subject to social insurance premium are: Additional amounts, which can be determined as specific amounts in addition to the salary agreed upon in the labor contract and are regularly paid in each pay period.<\/em><\/strong><\/span><\/p>\n Meanwhile, salary calculated according to KPIs is based on the job performance achieved by employees. On the other hand, KPIs may not be achieved by employees every month or achieved without the same results in every month. Therefore, the amounts paid according to the KPIs of each month may also be different.<\/p>\n Thus, the money achieved from KPIs for employees are other regimes and benefits stipulated in the company’s bonus regulation and is also the bonus as prescribed in Clause 2 of Article 103 of the Labor Code. In addition, KPIs bonus is specified differently by each company in its regulations and labor contract. The amount of KPIs bonus is paid according to the work performance of each employee, so such amounts cannot be received by the employee every month, or received with a different amount of money each month.<\/p>\n In short, the salary based on KPIs is an income that can be determined as specific amounts but paid irregularly in each pay period. It depends on the level of work completion and performance of the employee. Thereby, the salary paid according to KPIs shall not be included in the employee’s salary as the basis for social insurance payment.<\/span><\/strong><\/p>\n According to the Law on Personal Income Tax 2007, incomes subject to personal income tax include salaries, wages, and amounts of similar nature, and allowances<\/strong>.<\/p>\n Point b, Clause 2 of the Law on Personal Income Tax stipulates that the allowances NOT SUBJECT TO PERSONAL INCOME TAX include: those paid under legal provisions on preferential policies for people with meritorious services; national defense and security allowances; hazard or danger allowances for working in business lines or jobs at places where exist hazardous or dangerous elements; allowances for attraction of labor, area allowance specified by law; allowances for sudden hardships, allowances for occupational accident or disease, maternity or child adoption allowances paid in a lump sum; allowances for loss of capacity for work, lump sum pension, monthly survivorship allowances, severance and job-loss allowances specified in the Labor Code, other allowances paid by the Social Insurance, and allowances not having the nature of salary, wage according to the Government\u2019s regulations.<\/span><\/p>\n Thereby, it can be seen that salary paid according to KPIs is NOT included<\/strong> in the list of allowances exempt from Personal Income Tax. Therefore, they shall be the income subject to PIT<\/span><\/strong> and the employee shall be liable for paying tax in accordance with the law.<\/p>\n Head<\/strong>quarters<\/strong>:<\/strong><\/em><\/span> 46th<\/sup> Floor, Bitexco Financial Tower, No. 2 Hai Trieu, Ben Nghe Ward, District 1, Ho Chi Minh City, Vietnam<\/span><\/span><\/p>\n O<\/strong>ffice:<\/strong><\/span><\/em> Lot 1.16 Viva Riverside, 1472 Vo Van Kiet, Ward 3, District 6, HCMC<\/span><\/span><\/p>\n Hotline:<\/strong><\/span><\/em> 093.1111.060<\/span><\/span><\/p>\n Email:\u00a0<\/em><\/strong>info@pl-partners.vn<\/a><\/span><\/p>\n Facebook:<\/em><\/strong>\u00a0www.facebook.com\/PLLaw<\/a><\/span><\/p>\n Website:\u00a0<\/em><\/strong>www.PL-PARTNERS.vn<\/em><\/a> \u2013 <\/em>www.HOIDAPLUAT.net<\/em><\/a> \u2013 <\/em>www.THUTUCPHAPLY.org<\/em><\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":" KPI is known as a key performance indicator. Salary based on KPI is the amount paid according to the employee performance. Currently, many enterprises have applied the salary calculated according to KPI in addition to the fixed salary to promote the job performance of employees. How does the law prescribe salary? Pursuant to Article 90 […]<\/p>\n","protected":false},"author":18,"featured_media":2787,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[168],"tags":[],"class_list":["post-2786","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-law-focus-tdl"],"_links":{"self":[{"href":"https:\/\/pl-partners.vn\/en\/wp-json\/wp\/v2\/posts\/2786","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/pl-partners.vn\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/pl-partners.vn\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/pl-partners.vn\/en\/wp-json\/wp\/v2\/users\/18"}],"replies":[{"embeddable":true,"href":"https:\/\/pl-partners.vn\/en\/wp-json\/wp\/v2\/comments?post=2786"}],"version-history":[{"count":0,"href":"https:\/\/pl-partners.vn\/en\/wp-json\/wp\/v2\/posts\/2786\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/pl-partners.vn\/en\/wp-json\/wp\/v2\/media\/2787"}],"wp:attachment":[{"href":"https:\/\/pl-partners.vn\/en\/wp-json\/wp\/v2\/media?parent=2786"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/pl-partners.vn\/en\/wp-json\/wp\/v2\/categories?post=2786"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/pl-partners.vn\/en\/wp-json\/wp\/v2\/tags?post=2786"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}\n
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