What is contract salary?? This is also a form of salary, in addition to common forms of salary such as: monthly, weekly, daily, product, hourly,... and this form of salary is also used by businesses. Based on the quality, volume of work and completion time to pay adequate remuneration to workers. Let's analyze in more detail about contract wages through the shares below.

What is contract salary?

What is contract salary? In essence, this is a form of compensation that employees receive when performing a certain job or task for a company or business, similar to many other forms of payment such as: monthly salary. , by week, by product, ...

Before the form of contract salary is implemented between the employee and the employer, a clear "contract" work contract must be signed between the two parties regarding the amount of money and items. job.

The special thing of What is contract salary? That is, before accepting the job, the employee will receive an amount of money in advance from the employer, called a deposit, and the remaining amount will be received in full after the job or task is completed. completed according to the contract.

According to the 2012 Labor Code, the form of salary payment is clearly stipulated that: "The employer (employer) has the right to choose the form of payment based on time, product or contract. The chosen form of payment must be maintained for a certain period of time; In case of changing the form of salary payment, the employer must notify the employee at least 10 days in advance.”

Thus, piece wages are also a form of salary recognized by law so that employers and employees have the right to choose to meet the needs of both parties, as long as there is an agreed and signed agreement. clear contract between both parties.

Jobs that can apply form What is contract salary? This form of salary is often applied to projects, jobs, or product fields that are short-term, have little repetition, and that the employer needs to meet urgently from time to time. in business activities.

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Advantages and disadvantages of piecework wages

After understanding “What is contract salary?, now you should learn about the advantages and disadvantages of the lump sum payment method to have a more appropriate plan to apply it. As follows:

What are the advantages of contract wages?

The current form of fixed salary payment is very popular with many businesses and workers, because it is easier and faster when calculating remuneration for work items.

Furthermore, when hiring workers, businesses can completely entrust themselves to the workers, only caring about the results received, without having to closely control the implementation process.

What are the disadvantages of contract wages?

Because according to the specific characteristics of this type of wage payment, the business must pay the employee a certain amount of money in advance, and the rest will be paid when the work is completed and fully handed over.

Thus, businesses will need to calculate the unit price of work items very carefully and meticulously so that the contractor can receive certain benefits and rights. At the same time, both parties need to consider carefully before making an agreement and signing a contract that meets the needs of both parties.

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Latest standard salary calculation method today

So what is the most correct way to calculate standard salary? Contract salary is the remuneration paid by the employer to the employee after completing work, tasks, products, etc. in accordance with the agreement agreed by both parties.

And the salary is calculated according to the following formula:

Thus, the amount of salary paid in this way depends heavily on the amount of work/product or revenue of the individual/team performing the work, and can be affected by many other factors such as: time. Completion time, salary calculation based on coefficient, score, title, job level, professional field of work,...

Note: Salary and work completion time are according to the previous agreement and contract signed by both parties. If there is any change, both parties must agree and accept.

Current forms of salary payment 

Popular forms of salary payment

According to Article 54 of Decree 145/2020/ND-CP, employees and employers are allowed to negotiate appropriate salary payment methods based on time, products, nature of work, etc.

Below are the most commonly applied forms of salary payment:

• Pay according to the time of work performed, such as: daily, weekly, monthly, etc.
• Pay according to the product based on the level of product completion, quantity and quality of the product.
• Pay according to the amount of work and handover time between both parties.

And this salary can be paid in cash, paid via bank account, paid in products, etc., as long as there is agreement from both parties.

3 Notes when applying salary payment

• The form of paying a contract salary requires the business to meticulously and carefully calculate costs and salary levels to both optimize and respond well to the business's personnel hiring costs, and at the same time be appropriate and ensure protect the rights of workers.
• Enterprises need to offer many different salary levels corresponding to the level of work completion and different work completion times for workers to choose from, and can promise to pay additional bonuses to keep workers motivated. maximize your working ability.
• In contracts between businesses and employees, businesses need to be meticulous about each clause, be clear and detailed about job requirements and corresponding salaries, to limit disputes and misunderstandings. between the two parties after finishing the work.

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Some frequently asked questions about salary

Does contract salary include personal income tax?

Based on Circular 111/2013/TT-BTC, Article 25, Clause 1 - Point i has regulations on Tax Deduction, in principle, when an enterprise pays wages to employees in the form of piece wages, it must still Carry out tax deduction at the rate of 10% PIT. If the enterprise does not want to deduct this tax, it is necessary to request individual employees to complete the commitment form 02/CK-TNCN according to the prescribed instructions.

Does contract salary require social insurance?

According to insurance law, salary is an income that does not include allowances or other supplements, so insurance must also be paid. That is, businesses and employers will be responsible for paying social insurance for individual employees according to current law.

Above is all the information about What is contract salary? and related content, hoping to answer readers' questions and concerns.

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