In 2025, the salary system will continue to be one of the areas that state management agencies focus on inspecting and examining. Even a small mistake in salary payment, deduction or insurance payment can cause a business to be fined and affect its reputation. Therefore, employers need to re-examine compliance in the entire salary system to ensure transparent and legal salary payment activities and avoid unnecessary risks.
This article provides payroll compliance checklist so that businesses can review and implement correctly, even if you are not an expert in human resources - payroll.
I. Compliance with minimum wage
Ensure not to pay wages lower than the regional minimum wage prescribed by the Government:
- Identify the business zone I, II, III, or IV according to government regulations.
- Review your salary scale, compare the lowest base salary you are paying with the regional minimum in 2025.
- If the basic salary is lower → it must be adjusted upwards.
💡 For example: If your company is in Ho Chi Minh City (region I), the minimum salary to be paid in 2025 must not be lower than the minimum region I level of VND 4,960,000/month.
Many businesses agree with employees on the actual salary paid, but the labor contract states a lower amount to reduce social insurance contributions. When inspected, the social insurance agency bases the actual salary payment on the payroll to collect arrears, leading to a huge debt and possible fines. Make sure the contract and payroll match to avoid risks.
👉 See more: General guide to building a salary scale for businesses
II. Compliance with mandatory social insurance salary
Identify salary as basis for social insurance payment Must include: Salary according to position title, salary allowances, other supplements that determine specific amounts, paid regularly.
Excluding items excluding social insurance contributions: Bonuses based on business results, initiatives, and other benefits specified in the labor contract: Support for meals between shifts, gasoline, phone, housing, childcare, etc.
Check the employment contract and payroll to see if the items are clearly separated. If the “salary + allowances” are combined without classification, the Social Insurance agency will calculate the total amount for payment.
💡 For example: If the labor contract agrees on a basic salary of 7 million, responsibility allowance of 1 million, and meal allowance of 800,000 VND, then the salary used to calculate social insurance contributions is 8,8 million, not 7 million.
During inspections, the Social Insurance agency often requests to compare the labor contract, payroll and payment documents. If the allowance is paid monthly but does not include social insurance contributions, it will almost certainly be collected. It is best to clearly stipulate which amounts are paid and which are not, along with the conditions for receiving benefits and the levels of benefits right from the contract or salary and bonus regulations to make the amounts transparent.
III. Compliance with wages and working hours
Ensure that standard working hours per day, per week and salary items are calculated correctly according to the regulations of the Labor Code 2019 and current legal documents:
- Determine standard working hours not to exceed 8 hours/day and 48 hours/week. Or weekly working hours must not exceed 48 hours/week and not exceed 10 hours/day.
- If employees work overtime → must comply with the maximum overtime hours according to Labor Code 2019 is not more than 50% of normal working hours in 01 day, total normal working hours and overtime hours not more than 12 hours/day, and not more than 40 hours/month, not more than 200 hours/year and salary is calculated at the correct rate:
- Overtime on weekdays: minimum 150% hourly wage
- Overtime on weekly days off: at least 200% hourly wage
- Overtime on holidays: minimum 300% Hourly wage excluding holiday pay.
- Working at night: pay extra at least 30% of hourly wage.
💡 In addition, if workers work overtime at night, in addition to In addition to the above rates, employees are also paid an additional 20% of their salary calculated according to the unit price of salary or salary according to the work done during the day of a normal working day or a weekly day off or a public holiday.
- Make timesheets and keep overtime documents for transparency.
Many businesses only use the basic salary/26 working days to calculate the overtime price → while by law they must use the actual salary paid according to the work being done (including salary, salary allowance and fixed supplement).
During the inspection, the labor agency will ask the enterprise to explain why it omitted responsibility allowances, position allowances, seniority allowances, etc. in the unit price. If it proves unreasonable, the enterprise must pay additional fees and be fined.
IV. Allowable deductions
Only valid deductions as prescribed by the Laws (social insurance, health insurance, unemployment insurance, personal income tax, union dues, etc.) can be made.
It is not allowed to arbitrarily deduct expenses such as: fines for violating regulations, uniform costs, compensation, etc. unless there is a legal written agreement.
⚠️ Some businesses have regulations on lateness fines or deductions from wages for uniforms, leading to employees complaining to the Labor Inspectorate.
As a result, the enterprise was both administratively fined and had to return the money that had been deducted. Instead of “deducting from salary”, clearly issue a reward and punishment regulation and implement the reward (additional) mechanism instead of deduction.
V. Ensure correct payment of social insurance – health insurance – unemployment insurance – union fees
Check the list of employees eligible to participate in social insurance (contract from 01 month or more).
Calculate social insurance contribution based on salary + allowance + fixed supplement.
Compare with 2025 closing rate:
- Enterprises pay: 17.5% social insurance, 3% health insurance, 1% unemployment insurance, 2% union fees.
- Employees pay: 8% social insurance, 1.5% health insurance, 1% unemployment insurance.
⚠️ Some businesses only pay social insurance on the "basic salary" but ignore regular allowances (lunch, responsibility, etc.).
When conducting an inspection, the enterprise will be subject to additional collection + late payment interest + heavy fines and is at risk of being prosecuted for criminal liability if the act is considered an act of evading mandatory social insurance payments.
VI. Check personal income tax (PIT) deduction
Check whether the employee has a personal tax code at the time of income generation.
Determine tax-free income, taxable income, taxable income, and family deductions for each employee who has income during the month.
Apply progressive tax schedule to calculate monthly personal income tax for employees with labor contracts of 03 months or more.
Provide tax deduction certificates to employees upon request.
⚠️ Many businesses often misdetermine taxable income, for example: miscalculating shift allowances or not separating tax-exempt amounts → leading to incorrect deductions.
Some businesses forget to register dependents for employees even though deductions are recorded in the payroll. At the end of the year, when employees finalize their personal income tax, the family deduction is not calculated → they have to pay higher taxes, causing frustration and complaints.
VII. Meeting wage reporting requirements
Prepare payroll related reports and submit on time:
- Periodic labor use report every 06 months/01 year;
- Reports related to social insurance: increase or decrease in labor, ad hoc reports;
- Monthly/quarterly/annual personal income tax report.
Store salary records, contracts, timesheets, social insurance and tax payment documents, etc. in accordance with regulations.
Many businesses only care about financial reports, forgetting about periodic labor reports related to labor and social insurance. When the inspection team arrives, "not submitting on time" will almost certainly result in a fine, or an explanation will be required, wasting time, resources and costs for the business.
👉 See more: Guidance for businesses when there is a Social Insurance Inspector
Managing salary compliance is not only about complying with legal regulations but also about demonstrating the professionalism and prestige of the business to employees. With many years of experience in consulting and handling practical issues for businesses during inspections, we are ready to accompany you to help you build a transparent salary system, optimize costs and develop with peace of mind.